Californian based Beyond Meat Inc. (BYND) whose product uses proteins from soy, fava beans and peas as a substitute for meat took the markets by surprise when it made its debut on Wall Street with its IPO.
On their first day of trading, their shares almost tripled soaring to 163%.
They entered the markets with 11 million shares at $25 a share, raising over $240 million. Frenzied buying saw the shares doubling and now stand at around $70 apiece.
It turns out…
Wall Street certainly underestimated the market’s enthusiasm for Beyond Meat the day of its IPO and the growing popularity for plant-based substitute for the meat market.
More to come
This is expected to herald in a new wave of other plant-based food companies entering the market through IPOs and acquisitions.
Here’s the kicker:
Cargill, Awano Food Group, Tyson Foods, Archer Daniels Midland and Ingredion – all of these established food companies are investing in companies who are developing plant-based products as a substitute for meat.
What’s the real story?
According to senior research analyst at Bernstein, Alexia Howard said in a news report that over the last few years, plant-based burgers are doing very well in the marketplace.
Perishable products like the Beyond Burger, patties, imitations sausages and vegan ground beef can now be seen in the meat section of major supermarket chains and is seeing strong growth together with strong consumer demand.
She compared it to the expansion of the milk industry, of almond milk and hazelnut milk which has been available to consumers for nearly 10 years and is growing at an accelerated rate.
She went on to say that today it enjoys 15% of the overall fluid milk market share, rising from 5% and is continuing to rise.
In addition to that…
She believes that over the next 10 years, alternative meat products will rise from $13 billion to $40 to $41 billion which will eat into the U.S. meat market share of $270 billion.
To top it off:
The market for plant-based food is still in its infancy and is catching on quick after Beyond Meats IPOs success. You only need to take a look at what is happening in the market place to see the huge future potential.
- Beyond Meat has come out with plant-based beef, sausage and ground beef and has a market valuation of over $4 billion after its successful IPO debut.
- Impossible Foods also has beef, sausage and other plant-based products with some Burger King branches selling Impossible Whopper. Currently, Caesars is testing the sausage product.
- Memphis Meats has developed beef and poultry plant-based products with an investment from Tyson Foods who purchased a stake in their business in 2018.
- Just have targeted a product for plant-based eggs and mayonnaise and cultured beef. To develop, market and sell their products, they have partnered with Awano Food Group.
- Finless Foods have cultured seafood and raised $3.5 million for development of cultured |Blue fin tuna in 2018.
- Clara Foods are targeting cultured proteins, egg whites and beverages and led a fundraising round this year in April.
- Geltor has cultured collagen and is selling collagen to the cosmetics industry and plan a launch for food in 2020.
- Wild Earth has cultured protein for dog food which has a large market for vegans.
Do you see where we’re going with this?
This is only a sample of what is happening in the plant-based market with products that are being developed and attracting the big movers and shakers to the industry.
That’s not all…
As can be seen, interest in non-animal protein is not only confined to animal-derived burgers.
There is a wide and diverse range of new products that major industry players are exploring.
But one thing’s for sure
Expectations are that there will be many start-ups with some becoming success stories and others not succeeding, lots of activity also is predicted with mergers and acquisitions.
This is only a glimpse of the future of products derived from plant-based foods.
By and large
It has huge potential for growth as more and more people look for products that taste good and are indistinguishable from animal-derived meat and cost-efficient.
Now as the market grows, there is controversy by marketers, investors and journalists over what plant-based food should be called.
Currently, some describe it as ‘fake meat’, meatless meat, lab meat, plant-based and vegan and although the market is in its infancy, they will need to come up with a name that best describes the product for consumers.
Here are some of the possible names that are under discussion:
- Vegan – no animal-derived ingredients in the product.
- Cultured – microbes or tissue culture which is grown in a bioreactor, genetically engineered. They are fed from plant-derived energy sources, like sugar.
- Plant-based – protein from plants
Now get this:
Beyond Meat is the first vegan IPO to deliver a non-animal source protein product, delivering a product that tastes like animal-derived meat and lives up to the ideals of vegans who are against industrial livestock production and consumption.
Big plans ahead
Beyond Meat has big plans for the future.
They are aiming to open manufacturing plants in Europe next year with plans to expand into Asia already having secured a distributor in Hong Kong.
Who will be the next sensational plant-based IPO?
Still in its infancy and large enough for multiple producers to flourish, you need to get ready for the next wave of animal-free protein developers to take the market by storm.
The field is stacked and is going to be a great investment opportunity for traders.
How can you actually use this?
Right now, you can trade with Beyond Meat stocks via contracts for difference or CFD via leading service provider Plus500.
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The best part?
Plus500 offers traders a variety of beneficial perks:
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You can increase your knowledge and learn how to apply risk management tools to protect you in case a trade goes against you with the guaranteed stop that will lock-in on your profits through their education program,
Here are some of the other benefits:
- Plus500 sits on the London Stock Exchange, is authorized and regulated by the top financial authorities.
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- Free demo account with virtual money
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