The company had the top-performing IPO of 2019.
Beyond Meat offers a line of plant-based meats and is sold in stores like Whole Foods and restaurants across the country. The company went public this month with an initial offering of $25 per share.
Since then, its shares have shot up more than 300%. This makes it the top performing IPO of the year. The company plans to use the proceeds to expand its manufacturing facilities and to increase its sales and marketing efforts.
Challenges facing Beyond Meat
In spite of the company’s strong IPO results, it still faces its shares of challenges in the coming year. For one thing, although Beyond Meat’s revenue continues to grow, it has yet to turn a profit.
The company generated $56.4 million during the first nine months of 2018 but posted losses of more than $22 million. But as they demand for alternative meat continues to grow, the company has the opportunity to capitalize on a multi-billion dollar industry.
And the company has a number of strong competitors. Not only is Beyond Meat competing with the traditional meat industry, it’s also competing with companies like Morningstar Farms. Many of these companies have a much stronger brand recognition than Beyond Meat.
Plus, Beyond Meat could experience supply challenges in the future. Most of the company’s revenue comes from its Beyond Burger, which uses a pea protein supplement.
The company uses a single supplier for the protein which has already caused delivery delays. And the price of pea protein could fluctuate based on environmental factors.
Beyond Meat has experienced a huge growth in revenue over the last several years. From 2017 to 2018, its revenue increased by over 169%. And the company’s products are served in more than 12,000 restaurants across the U.S. and Canada.
And while the U.S. market for plant-based substitutes currently hovers around $4 billion, it’s been estimated that this could become a $150 billion global industry. If Beyond Meat can continue to increase its offerings and brand recognition, it could be well positioned for future growth.