The reason I am covering Beyond Meat (NASDAQ:BYND) in this article is that it is one of the most interesting companies in the world.
For readers who haven’t heard of Beyond Meat, it’s one of the fastest-growing companies in the United States and possibly in the world, offering a portfolio of revolutionary plant-based meat.
The company literally manufactures meat right out of its factories, but with plant-based protein instead of with animal-based meat.
According to Beyond Meat, its technology has enabled consumers to experience the same taste, texture and other sensory attributes of animal-based meat products as the company’s plant-based meat products, but minus all the hormones and antibiotics that are typically found in animal-based products.
The success of Beyond Meat’s breakthrough innovation and the variety of products has positioned the company to directly compete in the $1.4 trillion global meat industry.
That said, this article explores Beyond Meat’s revenue and briefly looks into the company’s different business channels and their respective sales.
Also, we will look at the growth of the company based on its historical revenues on a quarterly and yearly basis.
Other than yearly and quarterly revenue, this article also dives into the topics of revenue breakdown by channel and by region (country) to see where Beyond Meat’s growth is headed in the United States as well as internationally.
Let’s read on!
Beyond Meat’s Annual Revenue
First off, we will look at Beyond Meat’s annual revenue for the past 3 years from 2017 to 2020 to find out how the company performs on a yearly basis.
Beyond Meat’s annual net revenues as shown in the above chart is the aggregate of net sales generated from all of the company’s distributing channels and is net of all promotions, rebates and discounts given to customers.
According to the chart, Beyond Meat’s annual revenue has been on an exponential growth from 2017 to 2020, recording year over year growth rates of 170% and 239% in 2018 and 2019, respectively.
By the end of 2019, Beyond Meat’s annual revenue broke the $100 million barriers for the first time and reached a record number of $298 million.
As of the first 3 quarters of 2020, Beyond Meat’s net revenues already reached more than $300 million, surpassing that of the entire year of 2019.
Between 2017 and 2019, Beyond Meat’s annual sales have increased by nearly 10X in just 3 years.
According to data from Fitch Solutions‘ macro research, the meat industry is the largest category in the food sector, generating an estimated sales of approximately $270 billion in the U.S. or $1.4 trillion globally in 2017 alone.
With annual sales of only $300 million in 2019, Beyond Meat’s market share in the US and global meat industry was less than 1% and represents just the tip of an iceberg.
With this in context, there will be plenty of opportunities for Beyond Meat to expand its market share not only in the U.S. but also globally.
Additionally, the growing consumers’ awareness of the negativity associated with eating animal-based products, including climate change and diseases that often come with eating animal-based food, may help and speed up Beyond Meat’s expansion into the protein industry.
Beyond Meat’s Net Revenue (Quarterly)
From a quarterly perspective, Beyond Meat’s quarterly net revenue has also been on an exponential growth from 2018 to 2020, reaching a record high of $113 million in Q2 2020.
The 2Q 2020 quarterly sales of $113 million represent a year-over-year growth rate of a whopping 69% or 16% sequentially, making it the best quarter ever.
While Beyond Meat reported fewer sales in 3Q 2020 compared to the prior quarter, it was still one of the best quarters in 2020 with $94 million of revenue reported, representing a year on year growth of 2.7%.
According to Beyond Meat, the substantially weak quarter in 2020 Q3 was primarily driven by the slowdown in its foodservice segment as well as the retail channel when panic buying has subsided in the later stage of the COVID-19 pandemic.
Beyond Meat’s Net Revenue (TTM)
From a TTM or trailing 12-months perspective, Beyond Meat TTM net revenue as of Q3 2020 reached a record high of $403 million even though the quarterly figure shows otherwise.
On a long-term basis, Beyond Meat TTM revenue has kept rising both sequentially and year over year, with no slowdown in sight.
Again, Beyond Meat may have moved sales a little slower in 2020 3Q on a sequential basis, due primarily to consumers’ freezer loading, its long-term growth prospect remains intact.
According to Beyond Meat, the company has continued to invest and expand in both the U.S. and international markets, despite the uncertainties brought on by the COVID-19 pandemic.
In this aspect, Beyond Meat’s 3Q 2020 quarterly statement highlights a 400% increase in capital expenditures totaling as much as $38 million for the 9 months ended Sept 26 2020 compared to only $9.5 million for the prior-year period.
Beyond Meat’s Revenue Breakdown by Distributing Channel (Yearly)
Beyond Meat operates on two distributing channels, and they are (1) Retail and (2) Restaurant and Foodservice.
According to Beyond Meat’s 3Q 2020 quarterly statement, the company’s products are available in approximately 28,000 retail outlets and 42,000 foodservice locations in the United States alone, representing growth rates of 65% and 236%, respectively, since IPO.
Internationally, the retail and foodservice outlets’ growth rates are nothing short of extraordinary, totaling 21,900% and 1,167%, respectively.
In terms of revenue breakdown by channel, the company distributed most of its products to retailers in 2017 as seen from the higher revenue of $25 million compared to only $7 million of revenue generated from restaurant and foodservice.
However, Beyond Meat’s restaurant and foodservice segment took off in 2018 when revenue from this channel grew by more than 400% year over year to reach $37 million compared to the revenue from the retail segment which grew only 99% year on year.
In 2019, Beyond Meat’s revenue from the restaurant and foodservice channel surpassed that of the retail segment for the 1st time by a margin of nearly $10 million.
In the same year, Beyond Meat’s restaurant and foodservice revenue reached $153 million compared to $145 million from the retail channel.
However, foodservice revenue plummeted badly to only $79 million in the 1st 9 months in 2020 compared to $225 million for the retail channel.
In 2020, Beyond Meat’s retail channel sales exploded to $225 million year-to-date, beating the previous year by roughly 55% while the year hasn’t ended yet.
According to Beyond Meat’s 3Q 2020 earnings release, the surge in retail channel sales throughout 2020 was largely driven by the COVID-19 induced panic buying which occurred during the early stage of the pandemic.
For this reason, Beyond Meat’s 3rd quarter retail channel revenue was negatively impacted by this specific consumers’ buying pattern which subsequently resulted in freezer loading, and in turn, contributed to the weaker retail channel sales sequentially in Q3 2020.
Beyond Meat’s Revenue Breakdown by Distributing Channel (Quarterly)
The chart above shows Beyond Meat’s revenue breakdown by distributing channels from 2019 to 2020 on a quarterly basis.
From a quarterly perspective, Beyond Meat’s restaurant and foodservice revenue overtook that of retail segment revenue in 4Q19 for the 1st time.
However, the foodservice revenue declined substantially beginning 1Q20 on a sequential basis. The sales decline in the foodservice channel persisted in 2Q20.
In the 2nd quarter of 2020, Beyond Meat reported only $14 million in sales for the restaurant and foodservice channel, a far cry from the $58 million peak revenue achieved in 1Q19.
Fortunately, Beyond Meat’s restaurant and foodservice revenue bounced back sequentially in Q3 2020 by roughly 78% to $24.4 million.
However, the 3rd quarter still represents a year on year decline of more than 40% for the foodservice channel.
In contrast, Beyond Meat’s retail sales revenue continued to climb and reached a record high of nearly $100 million in 2Q 2020.
As mentioned, due to the subsided panic buying and freezer loading effect which occurred in subsequent quarters, Beyond Meat’s retail channel sales plummeted sequentially in 2020 Q3 to only $70 million.
Despite the lower revenue in the 3rd quarter, retail sales were still 40% higher compared to the same quarter a year ago.
While the sales of the foodservice channel may have plummeted badly in the age of the COVID-19, it might have a higher gross margin and possibly higher profitability compared to the retail channel since Beyond Meat distributes its products directly to these foodservice outlets.
Beyond Meat’s Revenue Breakdown by Region (Quarterly)
The chart above shows Beyond Meat’s revenue breakdown by region or by country over the past 2 years from 2019 to 2020 on a quarterly basis.
According to Beyond Meat’s financial statements, there are only two regions or countries being disclosed in terms of the breakdown of sales, and the regions are the United States and International (inclusive of Canada).
Prior to 2020, the sales from Canada were lumped together with that from the United States.
However, starting in 1Q 2020, Beyond Meat has put the sales from Canada under the International category, which is separately different from that of the U.S.
Coming back to the above chart, Beyond Meat’s U.S. sales have been trending higher since 1Q19, reaching a record high at $96.5 million in 2Q 2020.
Beyond Meat’s U.S. sales were slightly lower in 3Q 2020 at $78.4 million compared to the prior quarter but were still up 25% year over year.
Beyond Meat’s U.S. revenue seemed unstoppable, climbing year over year, despite experiencing the full brunt of the COVID-19 disruption in the U.S. food industry.
On the other hand, Beyond Meat’s International sales have been devastating since 2020, reaching a record low of only $16 million in 3Q 2020.
Year over year, Beyond Meat’s international revenue has plunged as much as 46% in the 3rd quarter or 5% sequentially, due mainly to the stay-at-home orders in most countries which have affected the restaurant and foodservice segment the most.
The majority of restaurants and bars, in particular, have been closed for a pro-long period since 1Q20, which in turn contributed to the decline in the foodservice segment revenue globally.
As of 3Q 2020, Beyond Meat’s U.S. revenue was seen contributing the largest portion of sales to the company, at more than 80%.
Beyond Meat’s Revenue Sequential Growth Rates (QoQ)
The chart above shows Beyond Meat’s quarterly revenue growth rates for the past 2 years between 2018 and 2020.
On average, the sequential growth rate for all quarterly results shown in the current chart was roughly 24%, with most growth occurring back in 2018.
The sequential growth was seen tapering down in most of the quarters in 2020, growing mostly in the high single-digit.
The company reported a quarterly growth rate of -1.4% in 1Q20.
In 2020 Q3, Beyond Meat reported the worst sequential growth rate of -16.7% over the last 3 years.
Moving forward, Beyond Meat expects to see seasonality effects, especially within the retail channel, with revenue contribution from this channel tending to be greater in the 2nd and 3rd quarter of the year.
The reason is largely due to a greater demand for certain products during the summer grilling season.
Beyond Meat’s Revenue Year Over Year Growth Rates (YoY)
According to the chart above, Beyond Meat’s year on year growth looks significantly more impressive than the quarterly growth results.
For example, year over year growth rate in 2Q 2020 was 68.5% as a result of the record-high $113.3 million reported quarterly revenue.
Nevertheless, year over year growth rate plunged to as low as 2.7% in 3Q 2020, due mainly to the freezer loading effect as mentioned in the prior discussion.
Moreover, we can also see that YoY growth rates have been tapering down since 2019 and dropped below 100% in 2Q20 for the 1st time, suggesting that Beyond Meat’s total revenue growth may be slowing down, most likely due to the COVID-19 disruption.
On average, Beyond Meat posted a YoY growth rate of more than 150% since 2019, indicating that the revenue growth was still phenomenal.
As discussed, there will be a much greater seasonality effect moving forward when revenue growth slows down, meaning that a certain quarter of the year may report higher revenue growth compared to other quarters.
Judging from the revenue growth over the past 3 years, Beyond Meat has been phenomenal in growing its sales both in the U.S. and the international market.
However, we are seeing revenue decline in the restaurant and foodservice channel as well as in international sales since the beginning of 2020, mostly due to the COVID-19 outbreak which has impacted the distributing channels.
Additionally, the closure of restaurants and stay-at-home orders have badly impacted Beyond Meat’s foodservice channel revenue.
Nevertheless, at a net revenue of just $300 million in 2019, Beyond Meat’s market share represents less than 1% of the $270 billion meat industry in the U.S and the $1.4 trillion market globally.
With this in mind, there will be plenty of opportunities ahead for the company, with growth prospects remain intact despite the uncertainties in the age of a pandemic.
Beyond Meat has continued to invest and expand for the long-term, as reflected from the said capital expenditures that have increased nearly 400% year on year.
For Beyond Meat, the company just needs to do what it has been doing which is bringing out more product varieties and keep the world known for its innovative mission of making the world a better place.
References and Credits
1. All information such as financial numbers and statistics in this article was obtained and referenced from financial reports available in Beyond Meat SEC filings.
Beyond Meat vs Impossible Buger
Plant-based meats are all the rage at the moment, with seemingly every restaurant offering either the Beyond or Impossible burger. There’s been a lot of discussion about how the two of them stack up against the real thing.
If you are a big fan of both the Beyond and Impossible burger and wanted to see how they compared to beef burgers when it came to taste, health and environmental impact (as well as a variety of other categories) …
Please head out to In-depth Guide to Plant-Based Meats.
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