The Plant-based Meat Maker “Beyond Meat” Goes Public with a Bang

Beyond Meat Inc., the company formed by Ethan Brown (who is vegan, by the way), raised almost $25 million dollars in 2009 to develop its array of plant-based meat, with shares sky-rocketing on their public debut. The maker of Beyond Burger being sold at the food chain TGIF and Whole Foods, among others, priced the initial public offer at $25 a share, raising at least $240 million, valued slightly less than $1.5 billion.

The company priced it’s IPO pretty high and eventually it increased during the IPO process itself. In a regulatory filing, the company revealed its plan to offer 9.5 million shares valued at $23 to $25 each, updating the original plan to offer 8.75 million shares priced at $19 to $21 each. However, it ended up selling 9.63 million shares, while underwriters held the option of selling an additional 1.44 million shares due to over-allotment. The stock started trading on the NASDAQ stock exchange under the ticker symbol “BYND.”

Great Debut

The first trade for the stock was $46 at $12:18 p.m. Eastern on 28^th May 2019, which was 84% above the IPO price. Credit Suisse, Goldman Sachs and JPMorgan were lead underwriters on the deal, with major bankers as co-managers. The company makes plant-based pork and poultry products. Proceeds of the deal are proposed to expand current manufacturing facilities and open new ones, to finance research and development, boost sales and marketing, and for general corporate purposes. The letter explains how Brown tried to unravel why humans consumed meat, accepting that it helped increase human brain size, allowed our human ancestors to develop as hunters, not scavengers, and later led to agricultural development and human settlement.

The Costs

But the toll on lipids, trace minerals, human health, natural resources, the environment, and animal welfare is very high, listing these as examples of unintended consequences causing illnesses like cancer, diabetes and heart disease. Livestock emerged as major contributors of greenhouse gas emissions, wasting land, energy, and water sources. Brown feels that humans need not abandon meat, but may define meat on composition and structure, such as lipids, trace minerals, amino acids, vitamins and water.  Those core elements exist in the plant kingdom and are not exclusive to animals. The animal serves as a bio-reactor, consumes vegetation and water and using their digestive and muscular systems, organizes these inputs into what has been called meat. At ‘Beyond Meat’, these constituent parts are taken directly from plants, and together with water, are organized to follow the basic architectural structure of animal-based meat.

This attempt bypasses the animal, which is agriculture’s biggest bottleneck. Beyond Meat’s strategy is to package and put its products at its grocery partners using the same packaging, to persuade meat eaters to try the product. The company has not tried to market the products to vegetarians and vegans, which is lesser than 5% of all Americans. The ‘Beyond Burger’ is already available for sale to customers at around 11,000 of its 17,000 grocery-stores in the US, as per the prospectus. It is even being sold at the Canada based fast-food chain A&W.