Beyond Meat and KFC have finally launched their plant-based fried chicken across the U.S. after taking years to perfect the recipe.
Jan. 5, 2022
Beyond Meat (NASDAQ: BYND) is a bit of a cult classic when it comes to investors getting exposure to the plant-based meat (PBM) sector. After all, it was one of the first to market, and certainly the first pureplay in meat substitutes to list on public stock exchanges.
What is the Beyond Meat Story?
Beyond Meat was founded by current CEO Ethan Brown in 2009. The purpose of the business was to create substitutes for meat products that actually mimicked and tasted so similar to the real thing that it's barely noticeable.
Only about 6% of Americans are vegan or vegetarian -- the flexitarian makes up the other 29% and omnivores make up the final 65%. And that's where the real market opportunity lies for Beyond Meat. 98% of people buying plant-based meat are still buying regular meat products too. This targets the everyday consumer that wants to reduce meat consumption but doesn't want to sacrifice taste.
The PBM sector's retail market alone is estimated to be worth $29.4 billion and is expected to grow to $162 billion by 2030, which, by then, will make up a total of 7.7% of the protein market share.
The Beyond Meat and KFC partnership
The long-awaited arrival of delicious plant-based fried chicken. Similar enough to deals struck in the past, this will be a limited-time nationwide offer. In part, this is probably testing demand, but if past experiences are anything to go by, the Beyond Meat launch could sell out in just hours.
It's not the first partnership deal Beyond Meat has done with fast-food franchises, and it's unlikely to be the last. In fact, it's a big part of the company's business, having made up in surplus of 48% of Beyond's revenue as of September 2021.
In the past, Beyond Meat has worked with several highly reputable foodservice companies including McDonald's, Denny's, Dunkin', Carl's Jr, Whitecastle, Starbucks, and Burger King.
Is Beyond Meat a good investment?
What Beyond Meat is really good at is finding international partners that will trial their products and open them up to new audiences. Management joining from Coca-Cola, and even former-CEO of McDonald's Donald Thompson have been among members playing a role here. Beyond certainly has an advantage over competitors when it comes to fast-food rollout deals, but when it comes to retail, the company could struggle.
There are new brands cropping up all the time, one almost as indistinguishable from the next. Nestle, Kraft-Heinz, Kelloggs, Hormel, and Kroger are among the lineup of competitors with an ever-growing presence in PBM -- and let's face it -- these are the head honchos when it comes to fast-moving consumer goods (FMCG). More often than not, products are distinguished by packaging, marketing, branding, and pricing.
Despite Beyond investing years of time and research into crafting the "perfect" burgers, sausages, and now chicken, I find it hard to believe that customers will choose Beyond every time. I'd love to come to a different conclusion but I think it will be the best quality, best price, end of. The company just doesn't have enough of an advantage to make it a top pick at these levels.
