The leader of the meat-free revolution Beyond Meat (NASDAQ:BYND) has made moves to expand into China, joining the China Plant Based Foods Alliance. Originally reported by Beijing News, it is said that the pea-protein based meat alternative is urgently undergoing approval procedures which govern all imported food into China. Identifying the Chinese market as a big opportunity for the company, Beyond will initially sell online in China before its intended move to supermarkets.
Beyond is exploring a potential partnership with Yantai Shuangta Food to facilitate the move. Shuangta is one of the world’s largest producers of non-genetically modified pea protein and pea starch and will provide vital assistance in navigating the Chinese market if the two businesses do decide to team up.
Beyond is not going to be the only veggie option eyeing up the Chinese opportunity. It is reported that British meat-free manufacturer Quorn is also looking to expand eastward. On top of this, the Chinese artificial meat company Zhenrou is set to raise $2 million for market development as the domestic companies batten down the hatches in anticipation of foreign competition.
What does a China expansion mean for Beyond Meat Stock?
Beyond Meat stock may be one of the most volatile on the market since its IPO last summer. The share price achieved astronomical highs, growing over 700% in less than two months. Since then it has been on a turbulent descent, yet it still remains over 300% up on its IPO price.
2020 has continued this rollercoaster ride, with the stock up about 30% since the start of the year. This run can be attributed to its partnerships with McDonald’s (NYSE:MCD), Dunkin’ Donuts (NASDAQ:DNKN) and Del Taco (NASDAQ:TACO) amongst others, as well as an ‘unintentional’ (the cynic in me finds this a bit hard to swallow) endorsement from Kim Kardashian.
While Beyond is enjoying a barn-storming run to kick off the new year, the bear case remains ever-present. Bigger companies with better distribution networks are circling around the alternative-meat market. The likes of Tyson Foods (NYSE: TSN), The Kellogg Company (NYSE:K) and Nestle are all competing in the space.
With questions over Beyond’s ability to meet demand and a far-less developed logistics network than some of its competitors, could a potential Chinese expansion cause added strain to their ability to deliver? Will investors be salivating at the Chinese opportunity, or could Beyond be biting off more than it can chew?
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