Beyond Meat raises $328m as appetite for vegan food grows

Beyond Meat uses sophisticated technologies to replicate the taste, colour, smell and texture of meat. PHOTO: BLOOMBERG
Beyond Meat uses sophisticated technologies to replicate the taste, colour, smell and texture of meat. PHOTO: BLOOMBERG

Vegan burger firm sells 9.625m shares at US$25 each, at the top of its offer range

NEW YORK • Vegan burger upstart Beyond Meat, whose backers include Hollywood star Leonardo DiCaprio and Microsoft founder Bill Gates, has raised US$241 million (S$328 million) from its initial public offering, valuing the firm at about US$1.5 billion as it surfs a wave of flexitarianism.

The California-based firm said it sold 9.625 million shares on the Nasdaq exchange at US$25 each on Wednesday, at the top of its offer range. Reflecting strong investor demand, it had increased the offer price of its shares to US$23-US$25 from US$19-US$21.

The company has tapped changing consumer appetites as growing numbers of people turn to plant-based meat alternatives, whether vegans who shun all animal products or flexitarians, who advocate eating less meat.

"We believe that consumer awareness of the perceived negative health, environmental and animal-welfare impacts of animal-based meat consumption has resulted in a surge in demand for viable plant-based protein alternatives," it said in its prospectus.

The firm said it believed eating plant-based protein would "help address concerns related to human health, climate change, resource conservation and animal welfare" as it seeks to compete with the US$1.4 trillion global meat industry.

Despite the popularity of its signature Beyond Burger and other products, Beyond Meat is still not profitable and recorded a net loss of US$30 million last year, according to its financial records released on April 29.

But it has seen strong growth, with US$88 million in sales last year, compared with US$33 million in 2017 and US$16 million in 2016.

"We have a history of losses, and we may be unable to achieve or sustain profitability," the firm cautioned in its filing with the Securities and Exchange Commission.

The group said it would use the funds raised to "expand our marketing channels, invest in our distribution and manufacturing facilities, hire additional employees and enhance our technology and production capabilities".

Like fellow veggie burger maker Impossible Foods, Beyond Meat uses sophisticated technologies to replicate the taste, colour, smell and texture of meat.

Despite the popularity of its signature Beyond Burger and other products, Beyond Meat is still not profitable and recorded a net loss of US$30 million last year, according to its financial records released on April 29.

It uses peas, beans and soy to make steaks and sausages or replace minced meat in tacos and spaghetti bolognese. The firm's popular Beyond Burger, which uses beets to make it "bleed", is sold in thousands of supermarkets and restaurants.

Its rival Impossible, meanwhile, has linked up with Burger King to offer a vegan version of its signature Whopper. Nestle and Unilever are also aiming to expand their presence in the growing sector.

Beside Mr Gates and DiCaprio, Beyond Meat's early backers include Twitter co-founders Biz Stone and Evan Williams, former McDonald's director Don Thompson, meat giant Tyson Foods and the Humane Society.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on May 03, 2019, with the headline 'Beyond Meat raises $328m as appetite for vegan food grows'. Print Edition | Subscribe