Beyond Meat (BYND, Financial) experienced a strong start during its initial public offering (IPO) in 2019, capitalizing on the growing interest in plant-based meat alternatives. The company, along with others in the industry, saw rapid sales growth and soaring stock prices as they developed products with improved taste. Collaborations with restaurants and retailers further increased consumer acceptance.
Alexia Howard, a senior research analyst at Bernstein, noted that everyone wanted a piece of the emerging market, which led to widespread experimentation with these products. Beyond Meat's IPO success aligned with the general enthusiasm for meat substitutes at the time. According to market research firm Circana, the plant-based meat market reached $1.3 billion in sales in 2020, marking a 46% increase from 2019.
John Baumgartner, a senior equity analyst at Mizuho Securities, highlighted the initial optimism surrounding Beyond Meat's IPO. The expectation was that plant-based meat could capture a market share similar to plant-based beverages in the dairy sector. Predictions suggested that the market opportunity could grow to $20 billion to $30 billion over the next decade.
However, the situation has shifted in recent years. The industry has faced declining sales, increased layoffs, and factory closures. Beyond Meat, once a leader in the sector, saw its stock price plummet from a high of $239 per share in 2019 to just above $3 per share currently.
Marion Nestle, a professor emerita at New York University, remarked that the plant-based meat industry was expected to revolutionize the food supply and pose a significant threat to the beef sector, but it has not developed as anticipated.
