Restaurant chains’ growing enthusiasm for plant-based meat products can be seen in Beyond Meat’s finances and its stock price.
The El Segundo, Calif.-based chain said its net revenues more than tripled in the quarter ended March 30, to $40.2 million. But the bulk of that growth came from sales to restaurants, which increased nearly 500% in the quarter thanks to deals with chains such as Carl’s Jr. and Del Taco.
And that sent the company’s stock price into the stratosphere: Beyond Meat’s stock rose 30% in morning trading.
Beyond Meat went public last month at $25 a share. By midmorning Friday it was trading at $130, a 420% increase.
“Every time a consumer sees our product on the menu, they see the Beyond Meat brand,” Ethan Brown, Beyond Meat’s CEO and founder, said on the company’s earnings call Thursday afternoon.
Brown hinted that his company has entered into more tests with fast-food restaurant brands that he cannot yet disclose but which could promise more revenue in the future. He indicated the company is in talks with major quick-service concepts and said that Beyond Meat has the ability to meet any chain’s potential demands, including a chain as large as McDonald’s.
“I don’t see anyone out there that would break our system,” Brown said.
Restaurants are increasingly enthusiastic about the potential of plant-based meat products. Companies have been making center-of-plate products based on Beyond Meat’s offerings, as well as those from rival Impossible Foods.
There is plenty of evidence that consumers are responding to chains’ offering of these brands.
Burger King saw sales grow 28% at its St. Louis market in April after it started selling the Impossible Whopper there, according to data from Technomic Transaction Insights. Technomic is a sister company of Restaurant Business.
Burger King now plans to add the product nationwide this year. And sister chain Tim Hortons is testing a product made from Beyond Meat’s sausage product.
Del Taco, meanwhile, said that its introduction of the Beyond Taco earlier this year has generated both sales and traffic at its restaurants.
The growing popularity has tested companies’ ability to manufacture the product.
Beyond Meat, however, has increased the efficiency of its manufacturing process, Brown said, and it has increased its overall manufacturing capacity while adding new deals with suppliers to meet the growing demand.
Brown said the company is prepared to match the growing demand his company expects this year. “We’re now entering a phase where we’re dealing with much larger and even international customers,” he said. “We feel very strongly we have solid capacity in excess of our 2019 and 2020 forecasts.”
Beyond Meat reported a net loss of $6.6 million, or 95 cents per share, and the company said that its earnings before interest, taxes, depreciation and amortization, or EBITDA, was $2.1 million after adjusting for one-time events. That was less than half of its adjusted EBITDA loss a year ago.
The company said it expects revenue of $210 million this year, which would be up 140% over 2018. Beyond Meat also expects its adjusted EBITDA to break even this year, putting the company on a path “toward profitability ahead of our initial plan,” Brown said.