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, the technology has enabled consumers to experience the same taste, texture and other sensory attributes of animal-based meat products with its 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 take on the $1.4 trillion global meat industry.
With all that said, this article will explore Beyond Meat’s revenue and briefly look 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.
So, just sit tight and 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 2019 to find out how the company performs on an annual basis.
Beyond Meat’s annual net revenues shown in the above chart are net sales generated from all of the company’s distributing channels and are net of all promotions, rebates and discounts given to customers.
As the chart shows, Beyond Meat’s annual revenue has been on an exponential growth from 2017 to 2019, 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.
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 in the meat industry not only in the U.S. but also globally considering the growing consumers’ awareness of the negativity associated with eating animal-based products.
Beyond Meat’s Quarterly Revenue
The chart above shows Beyond Meat’s quarterly revenue for the past 3 years between 2018 and 2020.
As the chart shows, Beyond Meat’s quarterly net revenue has also been on an exponential growth from 2018 to 2020, reaching a record high as of Q2 2020 at $113 million.
The 2Q 2020 quarterly sales of $113 million represent a year-over-year growth rate of a whopping 69% or 16% sequentially. The outstanding result in Q2 2020 has been a result of growth across all distributing channels which are shown in the next charts.
Beyond Meat’s Annual Revenue Breakdown by Distributing Channel
The chart above shows Beyond Meat’s annual revenue breakdown by segment or by distributing channel from 2017 to 2019 in the U.S. and globally.
Beyond Meat operates on two distributing channels, and they are (1) Retail and (2) Restaurant and Foodservice.
According to Beyond Meat, the company’s products were available in approximately 26,000 retail outlets in the United States alone and 39,000 US foodservices outlets as of 2Q 2020.
In terms of revenue, 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, the restaurant and foodservice segment was fast catching up in 2018 as revenue from this channel has grown by more than 400% in 2018 to reach $37 million compared to $51 million of revenue from the retail segment.
In 2019, Beyond Meat’s revenue has grown the most in the restaurant and foodservice channel when revenue from this segment surpassed that of the retail segment by a margin of nearly $10 million. In 2019, the company’s restaurant and foodservices revenue reached $153 million compared to $145 million from the retail channel.
In terms of year over year growth rate, the restaurant and foodservice revenue has the highest growth rate at more than 300% in 2019 compared to only 185% for the retail sector.
By 2019, Beyond Meat’s net revenue was almost equally divided between the two distributing channels. In my opinion, the foodservices channel should be more profitable in terms of gross margin compared to the retail channel.
Beyond Meat’s Quarterly Revenue Breakdown by Distributing Channel
The chart above shows the quarterly revenue breakdown by distributing channels from 2019 to 2020.
First of all, Beyond Meat’s restaurant and foodservices revenue actually overtook that of retail revenue in 4Q19. However, the foodservice revenue declined substantially beginning 1Q20 on a sequential basis. The revenue decline in the foodservice channel persisted in 2Q20 and the company reported only $14 million sales in the same quarter, a far cry from the $58 million peak revenue achieved in 1Q19.
In contrast, Beyond Meat’s retail revenue continued to climb higher and reached a record high of $100 million as of 2Q 2020.
Despite being disrupted by the COVID-19 pandemic, Beyond Meat’s retail sales in 2Q 2020 seemed to be defying the odds, climbing nearly 300% year-on-year compared to the corresponding quarter a year ago. Sequentially, the retail channel revenue climbed 79% compared to the prior quarter.
Unfortunately, the restaurant and foodservice channel revenue in Q2 2020 took a dive and reported only $14 million sales, representing a year-over-year decline of 58%. The decline in the restaurant and foodservice revenue was mainly driven by the disruption caused by the COVID-19 outbreak all over the world.
Beyond Meat’s Quarterly Revenue Breakdown by Region
The chart above shows Beyond Meat’s quarterly revenue breakdown by region or by country over the past 2 years from 2019 to 2020.
According to the company’s financial reports, there are only two regions or countries being disclosed in terms of the breakdown of the sales, which 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 decided to separate out the sales from Canada and put it under the International category.
Coming back to the current chart, Beyond Meat’s U.S. sales have been trending higher since 1Q19, reaching a record high at $96.5 million in 2Q20.
Even with the coronavirus outbreak, Beyond Meat’s U.S. revenue seemed to be not affected at all, climbing more than 100% on a year-on-year basis. The company also reported a quarterly growth rate of 33% during the same quarter.
On the other hand, Beyond Meat’s International sales were seen reaching peak revenue of $36.6 million in 4Q19 before declining substantially to only $16.8 million in 2Q20.
The 2Q20 quarter represents a year-over-year decline of 17% or more than 30% when measured sequentially for International sales. The drop in sales from the International region was mostly driven by the damage caused by the COVID-19 outbreak inflicted on the International distributing channel.
As of 2Q 2020, Beyond Meat’s U.S. sales were seen contributing to the largest portion of the total revenue, at roughly 85%.
Beyond Meat’s Quarterly 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 29%, 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 even a quarterly growth rate of -1.4% in 1Q20.
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 greater demand for certain products during the summer grilling season.
Beyond Meat’s Quarterly 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.
While the reported YoY growth rate of nearly 70% was nothing short of extraordinary, it represents the lowest since the beginning of 2019.
Moreover, we can also see that YoY growth rates have been tapering down since 2019 and dropped below the 100% level in 2Q20 for the 1st time, suggesting that Beyond Meat’s total revenue growth may have been slowing down, possibly due to the COVID-19 disruption.
On average, Beyond Meat posted a YoY growth rate of roughly 200% 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 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 globally.
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 disrupted the distributing channels.
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 lying ahead for Beyond Meat. 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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