Restaurant companies have been jumping eagerly on board the plant-based bandwagon, as chains from White Castle to Del Taco to Qdoba have begun offering plant-based versions of their primary products to an apparently eager customer base.
It’s a market that is expected to flourish over the coming years as more restaurants jump on board and more consumers try the product.
The latest evidence comes from Beyond Meat, the El Segundo, Calif.-based maker of plant-based meat products—the company that Carl’s Jr. uses for its Beyond Famous Star Burger and Del Taco uses for its Beyond Taco.
Beyond Meat has filed for an initial public offering and this week priced its shares at $19 to $21, with plans to raise as much as $200 million. That would give it a valuation of as much as $1.2 billion.
Here are five takeaways from the company’s offering documents.
Most of its customers are meat eaters
Beyond Meat confirmed what others have said in recent months: that most consumers of plant-based meat products are not vegetarians.
The company said that 93% of customers who purchased the product from the grocery chain Kroger also bought meat, suggesting that the market opportunity is much larger than simply people who abstain from meat.
That’s notable because only about 5% of consumers are vegetarians.
Indeed, the company has put its product in the meat case in a bid to target meat eaters.
The product’s growth has been explosive
Beyond Meat’s revenues have grown from $16.2 million in 2016 to $87.9 million last year. That’s a 133% compound annual growth rate.
The company has also been losing money as it markets its product and invests in development. That includes a net loss of $29.9 million last year.
Restaurants are helping with marketing
As with the Impossible Burger, which is getting marketing help from companies such as Burger King (Impossible Whopper) and White Castle (Impossible Slider), Beyond Meat is getting assistance from many of the restaurants selling its products.
That was demonstrated by the aforementioned product offerings at both Carl’s Jr. and Del Taco. And there’s evidence that it works to help those chains generate sales.
Beyond Meat said that its products for A&W Canada and TGI Fridays were the fastest new product launches in those companies’ respective histories.
The potential market is massive
Beyond Meat suggests that the potential market for plant-based versions of meat could be at least $35 billion in the U.S. alone.
The company gets that figure from the makers of nondairy milk products, such as almond and soy milk, which make up about 13% of the size of the dairy milk category.
Companies such as Beyond Meat and Impossible Burger are employing a strategy similar to the one used by makers of almond milk. “The success of the plant-based dairy industry was based on a strategy of creating plant-based dairy products that tasted better than previous, nondairy substitutes,” Beyond Meat said in its filing.
There is a lot of interest in the filing
Beyond Meat’s extraordinary growth is, not surprisingly, attracting investors.
The company initially filed with plans to raise an estimated $100 million. It jumped to more than $200 million with the filing this week and the estimated price. That suggests it sees enough interest in the offering to price its shares aggressively and increase the size of the offering.
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