- Beyond Meat, the tech company making meatless meat, debuted on the Nasdaq Thursday and trading sizzled.
- Shares soared in the first moments after going public, jumping to more than $61 from $25.
- It’s the first vegan “meat” company to go public, an indication of growing consumer interest in the alternative meat market.
- The company, which isn’t profitable, has many challenges, including competition from a similar startup called Impossible Foods.
Beyond Meat, the tech company behind meatless burgers in many grocery coolers, debuted on the Nasdaq stock market Thursday in a much-anticipated initial public offering that saw its share price more than double in the first hour of trading. It’s the first vegan “meat” company to go the IPO route — and its sizzling first-day performance suggests it won’t be the last.
Shares for Beyond Meat (ticker symbol: BYND) soared in the first moments of trading to more than $61 from $25.
The El Segundo, California, company had already generated investor excitement leading up to its launch this week when it raised its asking price by about $4 per share to $25. Beyond Meat raised about $240 million through the IPO’s sale of 9.6 million shares, a haul that valued the entire company at a cool $1.5 billion. Thursday’s stock jump could end up valuing the company at around $3.5 billion.
One of several emerging plant-based meat companies, Beyond Meat has attracted high-profile investors like Bill Gates and Leonardo DiCaprio. Its lab-grown beef, pork and poultry made with plant-derived amino acids is available in 30,000 grocers, restaurants and schools across North America.
It’s also available in grocers Kroger and Whole Foods and offered as veggie burger options in the restaurant chains A&W Canada, Carl’s Jr. and TGI Friday’s.
Marketing meatless meat to meat lovers
Beyond Meat’s public offering comes amid growing consumer interest in plant-based foods. U.S. sales of plant based meat jumped 42 percent in the past three years to $888 million, according to Nielsen.
Sales of alternative meat has surged past. Indeed, Beyond Meat states in its IPO filings that its bid to go mainstream means marketing its products to meat lovers over vegans, the latter of which it said count for just 5 percent of Americans.
Other meatless meat companies are also marketing products to meat eaters. After Impossible Food’s veggie Whopper debuted in a test location for Burger King, Restaurant Brands International CEO José Cil said the vegan version of its signature sandwich exceeded expectations and the company is planning to offer it in Burger King restaurants nationwide.
“We’re not seeing guests swap the original Whopper for the Impossible Whopper,” Cil said Monday in an earnings call. “We’re seeing that it’s attracting new guests.”
Alternative meat companies hope to replicate the success of the non-dairy milk industry, which has grown to about 13 percent of the milk market by positioning itself as the healthier alternative. Beyond Meat said in its filings that the vegan meat market can similarly grow to about $35 billion of the $250 billion domestic meat industry.
However, Beyond Meat has never made a profit, having generated losses every year since its inception, according to its SEC filings. It lost nearly $30 million just last year, and it will continue to spend heavily in the near future to expand its supply chain capabilities.
It also has plenty of fast-growing competitors. In addition to California-based Impossible Foods, meat purveyor Tyson invested in Jerusalem-based Future Meat Technologies and lab-grown meat producer Memphis Meats.
However, Renaissance Capital, which researches IPOs, said investors are likely to look past the risks, as the company is growing quickly. Beyond Meat’s net revenue nearly doubled to $87.9 million in 2018 from $32.6 million the prior year.
— The Associated Press contributed to this report.