- Dec 2, 2011
That's why you don't touch the stock with a 10 foot pole. I get the appeal of fake meat generally and certainly think that's here to stay. However, in the case of Beyond Meat (or any individual company in that business), I don't see what the barriers to entry are. I know they are thought to have the superior product, but it isn't like it's some big secret how to make these things. It can be imitated, and I see that market becoming extremely competitive. Margin compression over time. It's like Blue Apron. I get the appeal of their service, but there was nothing to prevent another provider or even an existing big box retailer from simply copying the idea. All it is is ingredients packaged in a box in the right portions and delivered to your door. Nothing proprietary about it, no barriers to entry.
Wendy's is looking into plant protein. McDonald's is kind of set in their ways, but if somebody lands an exclusive agreement with them their sales will quickly be in the billions. However, Impossible's and Beyond's products aren't inexpensive right now. That could limit their success at McD's, but longer term you'd have to think that putting peas and soy beans into an entree has to be easier than growing animals to do the same. Beyond and Impossible are establishing the necessary scale to compete with existing animal based diets and to keep competition from emerging.
Still... 100x sales is crazy. They are creating an industry that will touch a lot of customers and create a lot of jobs, but other than traders, new equity buyers will have a long wait to become wealthy by just buying and holding those stocks.