Thesis: Lifting of government restrictions in many places lets people get back to enjoying a dine-in experience at a restaurant and demand for at-home meal ingredients will soften. People for the past year were experimenting with exotic ingredients as they started cooking. This enthusiasm is weaning. The product is nothing unique. Veggie burgers have existed before humans formed civilizations. They report after market today and I am betting on a post report collapse.
Exhibit A: August restaurant dining was 5% higher this year than last year. BYND reported a 14.3% drop in grocery sales for the second quarter, providing a concrete measure of the trend. Beef burger orders at restaurants increased 12% between June 2020 and June 2021 while orders for plant-based menu items have remained basically flat during that period. Burger King, reported an approximately 50% drop in Impossible Whopper sales between its August 2019 launch and late 2020. Many start-ups are small, some major players with deep pockets are also getting in on the faux meat game. The company also has virtually no margin because it sells products at a loss in a bid to secure shelf space and establish brand recognition. BYND doesn’t have any kind of competitive advantage.
Exhibit B: Is the house on fire? Former CFO Mark Nelson retired in May, while COO Sanjay Shah stepped down in early September, less than two years after joining.
Exhibit C: Drop in daily visitors to their site. Why? b/c customers don’t need to look up info about a product that they are not buying.
Exhibit D: It’s backed by sophisticated investors such as Snoop Dogg and Liza Koshy. We all know that they do extensive analysis.
Exhibit E: In November 2020, Beyond Meat announced sales had only grown by 2% year-on-year compared to an expected increase of 40% . They used Covid as scape-goat. Well, the evidence points at a fundamental problem at the business model. If I want a burger I would order a real one and if I want a vegetarian meal I would order a real vegetarian meal.
Exhibit F: We are all looking for tendies! Fret no more they have you covered. They make chicken strips which journalist described as “likeness to real chicken was tolerable, at best”, and the chicken product was discontinued in 2019.
Disclaimer: just my thought. Not advice or research report. Do as you please.
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence or consult your financial professional before making any investment decision.
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