Covid-19: Boost for Plant-Based Meats

The coronavirus outbreak has been a disaster for many industries. However, a small amount of businesses have seen sales increase.

Rather unsurprisingly, tools for running projects and e-commerce have experienced a boost but there are some more unlikely winners including plant-based protein producers such as Beyond Meat.

Growing fears in the U.S. concerning shortages of meat due to outbreaks in close-quartered slaughterhouses are causing an increase in “meatless” meat.

Tyson Foods, Smithfield Foods and JBS, a Brazilian food manufacturer shut down three plants recently. These plants account for 15 percent of U.S. pork output and additional meat products are affected by coronavirus-linked shutdowns.

Although in quarantine, customers are already switching on to plant-based proteins. Shortages of beef and chicken and pork across the nation could intensify the adoption.

China, too, is proving to be a hot spot for demand. Beyond Meat has started selling its products in large numbers of Starbucks in China (SBUX) and KFC has begun experimenting with chicken based on plants.

According to researchers at UBS the plant-based meat market is predicted to grow to $85 billion by 2030.

Beyond Meat announced revenues in February that increased more than three times during the fourth quarter, but it also yielded a slight net loss.

At the same time, in expectation of sustained fast growth, investors have pushed BYND shares 44 percent higher YTD, against a 12 percent loss for the S&P 500.

Investors who desire getting into Beyond Meat’s stock right now will be paying more than 200 times the earnings forecast for the coming year.

The other big name of the industry, Impossible Foods, the business behind Burger King’s Impossible Whopper and various other meat products based on plants, is owned privately.

At the same time, Kellogg and Tyson Foods are two of the bigger companies that carry protein-based products but make up smaller parts of their total business.