- Beyond Meat said net revenues rose 215% to $40.2 million in the first quarter of 2019 compared to $12.8 million in the same period a year earlier, the company said in a statement. It was the first earnings report for the company since its IPO.
- Net loss was $6.6 million in the first quarter versus a net loss of $5.7 million in the prior-year period.
- The maker of plant-based hamburgers and sausages said it expects net revenues in 2019 to exceed $210 million, an increase of more than 140% compared to 2018. Wall Street was predicting revenue in 2019 of $205 million, according to CNBC.
After soaring more than 300% since its IPO last month, Beyond Meat's stock has been as hot as the demand for the plant-based products that it sells. In its first earnings report as a public company, the maker of its signature Beyond Burger posted a sharp increase in sales common for a young, fast-growing company. What's interesting is that while the company's sales soared 215% from a year ago, its losses rose at a much slower clip — a sign that even as demand for its product is growing, it's doing a good job keeping its expenses in check.
The report also shed light on Beyond Meat's growth plans in both retail and restaurant establishments. Early on, Beyond Meat focused much of its expansion on getting its products into popular grocery store chains such as Safeway, Whole Foods, Kroger and Wegmans.
But increasingly Beyond has moved to establish a greater presence in restaurants and foodservice, putting it on a collision course with competitor Impossible Foods' Impossible Burger that is planning a retail push later this year after focusing initially on restaurants.
In the case of Impossible, demand for its plant-based burger has outstripped its ability to supply it. Its product is available in more than 7,000 locations, including Disney Parks, White Castle, Red Robin and Burger King. To boost supply, it is adding a third shift of workers and installing a second production line at its manufacturing plant in Oakland, California.
Impossible recently raised $300 million in funding to boost production, bringing its total to more than $775 million in five funding rounds since it was started by Stanford University biochemistry professor Patrick Brown eight years ago. But even its CFO told Food Dive last month that the latest addition to its coffers may not be enough.
During its latest quarter, Beyond Meat said sales to restaurants and foodservice such as Del Taco and Carl's Jr. spiked 491% to $20.6 million, while retail growth was 110.8% to $19.6 million. Brown told analysts on its earnings call that Beyond Meat doesn't expect to have the same challenges meeting demand going forward even if it expands into additional restaurant chains.
"We feel very strongly that we have solid capacity that is in excess of our 2019 and (2020) forecast," Brown said. "We have contracts in place now for protein that are in excess of" our forecast.
For the most part, Beyond Meat and Impossible Foods have dominated the market with products that taste, smell and look like real meat. That is about to change. As sales grow, more companies are jumping into the crowded plant-based space.
Nestlé recently announced its plan to roll out a plant-based Awesome Burger this fall. Tyson Foods, which sold its minority stake in Beyond Meat shortly before its recent IPO, announced that it is launching its own meatless products this summer. One-third of specialty food shoppers have said they were buying a plant-based food and beverage, so more companies are bound to invest in this space.
The plant-based meat market is expanding at an impressive clip. Sales climbed 42% between March 2016 and March 2019 to $888 million, Nielsen figures cited by the AP show. At the same time, sales of conventional meat were up 1% to $85 billion. Euromonitor predicts the market for plant-based meat substitutes will reach $2.5 billion by 2023.
To be sure, the market for plant-based meats is strong so it's possible that there is enough growth to go around even if multiple companies are in the space. But Beyond Meat is still a young company, and while early results from its IPO and first earnings release as a public company are indicative that it is on the right track, the pressure is on for the company to deliver and justify its lofty $7.3 billion market cap despite never having posted a profit. Beyond Meat's stock rose $28 to $127.50 a share in mid-morning trading on Friday following the release of its earnings report late Thursday.