For the stock of Beyond Meat, Inc. (BYND), seemingly on a one-way descent, its high of $186.83 on January 26, 2021, seems like a distant memory. The precipitous decline in the company’s stock price has reflected the alarming decline in its top line, which is more than the category average due to the inflation-led slowdown.
Founded in 2009 by its CEO Ethan Brown, BYND targeted meat eaters with plant-based products that replicate animal meat in look, feel, and taste. The company partnered with grocery and restaurant chains to increase the reach and visibility of its products.
In the interest of sustainability, which of the following options would you prefer?
- Consuming regular quantities of plant-based meat
- Consuming animal protein in moderation and on occasions
The hype surrounding the brand, further accentuated by big-name celebrity endorsements, helped the company’s stock make a strong market debut in 2019.
However, the company’s single-minded pursuit of growth and expansion through innovative offerings came in lieu of mounting debt and cost overruns.
Moreover, the company’s tendency to overpromise and underdeliver also didn’t help. As a result, the company had to switch its priority from growth at any cost to sustainable growth with healthy cash flows.
However, this attempt to scale down while moving forward has resulted in revenue decline, loss of market share to competitors, and a consequent slump in share price.
While BYND deals with its struggles and charts an arduous path to profitability, here are some alternative food stocks to consider.
Nestlé S.A. (NSRGY) is a global nutrition, health, and wellness company. The company’s segments include Europe, the Middle East, and North Africa (EMENA); Americas (AMS); Asia, Oceania, and sub-Saharan Africa (AOA); Nestle Waters; Nestle Nutrition; and Other Businesses.
NSRGY's offerings include powdered and liquid beverages; water; milk products, and ice cream; nutrition and health science; prepared dishes and cooking aids; confectionery; and PetCare.
In 2017 NSRGY acquired Sweet Earth, a Calif.-based vegan foods manufacturer. In 2019, Sweet Earth announced the launch of its new vegan burger product, Awesome Burger, and its ground beef component, Awesome Grounds. Both products are currently distributed to supermarkets, restaurants, and universities.
For the fiscal year 2022, NSRGY’s total reported sales increased by 8.4% to CHF 94.4 billion ($104.66 billion), with organic growth coming in at 8.3% year-over-year. The company’s underlying EPS increased by 8.4% to CHF 3.42 during the same period.
For the first three months of 2023, NSRGY’s total reported sales increased by 5.6% year-over-year to CHF 23.5 billion ($26.05 billion). Organic growth came in at 9.3%, while acquisitions had a net positive impact of 0.3%.
Hormel Foods Corporation (HRL)develops, processes, and distributes a range of branded food products globally. The company operates through three segments: Retail, Foodservice, and International.
Back in 2019, HRL forayed into products that reduced meat consumption with its “Fuse Burger,” made from ground turkey and rice.
Despite a challenging start to the fiscal year 2023, persistent impact from inflationary pressures, supply chain inefficiencies, and lower-than-expected sales volumes, HRL’s sales and operating income for the first quarter came in at $3 billion and $289 million, respectively. The company’s diluted EPS came in at $0.40.
Tyson Foods, Inc. (TSN) is a protein-focused food company whose segments include: Beef; Pork; Chicken; and Prepared Foods.
In 2019, the company launched its line of meat-free and blended protein products called Raised & Rooted. After starting with nuggets made from a blend of pea protein powder and other plant ingredients, the brand diversified into blended burgers made with a combination of plant-based ingredients and Angus beef.
For the second quarter of fiscal year 2023, TSN’s sales demonstrated a marginal increase to $13.13 billion. On May 11, the company declared a quarterly dividend of $0.48 and $0.432 per share on its Class A and Class B common stock, respectively. The dividends would be paid out on September 15, 2023, to shareholders of record at the close of business on September 1, 2023.
