Shares in meat-alternative brand Beyond Meat (NASDAQ: BYND) have been on a tear so far in 2020, up nearly 70% in January alone and on course for the best month in the stock’s history. Beyond Meat shares rose 19% on Tuesday following the news that coffee chain Starbucks (NASDAQ: SBUX) would be exploring plant-based alternatives in the future.
The decision to expand into meat-alternatives was but one of five strategies Starbucks CEO Kevin Johnson announced as part of his campaign to create a ‘resource-positive company.’ Conversely to Beyond’s good fortune, investors seemed less than impressed with Starbucks, which saw its shares drop more than 1%.
Can Beyond Meat become Starbucks’ supplier?
Starbucks has made no intentions clear of who will supply its plant-based meat options, nor when it will implement the new phase of its business going forward. However, Beyond Meat has positioned itself as a market leader in the sector, with analysts believing they would be in a great position to win the contract.
Whether it helps or hinders the company’s chances, Beyond is in-fact already the supplier of meat-alternatives to Starbucks’ domestic rival Dunkin Brands (NASDAQ: DNKN). Not only this but Beyond also just announced an extension to its trial partnership with McDonald’s (NYSE: MCD) in Canada in the hopes of securing a deal for the companies 14,000 U.S. stores sometime in the near future. Other recent deals include a supply agreement with pea-protein producer Roquette, Subway, Del Taco (NASDAQ: TACO), and more.
What would landing Starbucks bring?
With more than 15,000 stores in the U.S. alone, 13,000 abroad, and a brand recognized globally, any deal with Starbucks would be a massive win for Beyond Meat. Should a complete deal with McDonald’s be added to a potential Starbucks agreement, and if Beyond Meat has really dealt with its logistics issues, the company’s growth potential would be enormous. Beyond are not betting solely on food chains either, as last year it was announced that in 2020 the brand would enter a partnership with the L.A. Lakers basketball team — the most popular NBA franchise in America.
The stock’s recent hot streak has burned short-sellers, who have been betting on Beyond’s share price collapsing further since it roared into the market with 163% growth upon its public debut. However, the company has crawled its way back and is now up roughly 400% from its IPO. Plant-based penetration in the global meat market will steadily climb toward 10% over the next decade according to analysts. Beyond is in a very good position right now to gain a foothold in a market that will potentially be worth $28 billion by 2025.
You can read all about Beyond Meat’s rise over the past year in our articles below:
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