Beyond Meat (NASDAQ:BYND) brought disruption to food consumption and it’s not done yet, indicating Beyond Meat stock has more to offer hungry investors.
Over the course of its brief history as a publicly traded company, Beyond Meat is proving volatile, confirming there’s no free lunch with this name, but that’s usually the lay of the land with younger growth stocks. To the point, Beyong Meat is disrupting the food business, a previously staid industry rarely known for innovation.
Additionally, Beyond Meat is proving it’s not a fad because healthy eating itself isn’t a fad. Sure, there was a time when Beyond Meat’s core constituency was vegetarians looking for something that feels and tastes like meat. Fast-forward a few years and the company is allaying fad concerns because more and more consumers are taking health and wellness seriously.
A 2016 study by Oxford University highlights myriad tangible benefits associated with reduced meat consumption.
“A global switch to diets that rely less on meat and more on fruit and vegetables could save up to 8 million lives by 2050, reduce greenhouse gas emissions by two thirds, and lead to healthcare-related savings and avoided climate damages of $1.5 trillion,” according to the university.
Table Set for Beyond Meat Stock
The histories of consumer behavior and financial markets remind investors that whenever a new, revolutionary equivalent of a long-standing, no-longer-evolving product comes along, older generations are often reluctant adopters, if they adopt at all. That’s not a knock on anyone. It’s just human tendency, and it rarely changes.
As it relates to Beyond Meat, the good news is that younger, more lucrative demographics, i.e. millennials, are warming to the company’s offerings.
“For example, 39 per cent of the U.S. citizens are actively using plant originated foods in their diets, and this shift is driven by millennials: 30 per cent eat meat alternatives every day, while 50 per cent eat meat alternatives several times a week,” notes Food Industry Executive.
Beyond Meat’s inroads with younger consumers are relevant beyond mere positioning of the company as a hip alternative to old school meat. These relationships are vital because, regardless of era and product, consumers display brand loyalty.
Or, in more modern terms, many if not most smartphone users don’t go back and forth between iPhones and Android devices. They’re loyal to one and usually maintain that loyalty for years.
Beyond Meat has that type of opportunity with today’s younger consumers. In many cases, the company’s products could be the first plant-based meat alternative shoppers try. If they don’t like it, there’s a fair chance they dismiss plant-based meat altogether. If they do like, Beyond Meat can easily capture many customers for life.
Tangible Growth Expectations
Adding to the Beyond Meat stock thesis are strong growth expectations for the global plant-based meat market. Polaris Market Research forecasts $35.4 billion in sales in 2027, or more than triple last year’s tally.
It’s possible that that number is exceeded because more businesses and governments are becoming aware of the costs and consequences of not addressing climate change. Likewise, more investors are getting hip to the benefits of equities and other strategies that do right by Mother Earth and it’s been proven that companies that aren’t good environmental stewards often lag rivals that prioritize things such as reducing greenhouse gas emissions.
Bottom line: Beyond Meat has a lot of levers to pull to lure more customers and investors to the table and it has a broad, young audience to appeal to on both fronts.
On the date of publication, Todd Shriber did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Todd Shriber has been an InvestorPlace contributor since 2014.