Fake Meat

  • Intro
  • Beyond Meat
    • Bulls
    • Bears
    • Catalysts
    • Key Metrics
  • Impossible Foods
  • Recommendation


Just ~4 years ago, finding a non-meat alternative usually meant ordering a salad.

My boss at the time was a vegetarian, so wherever we went for lunch, he would order a salad. It was strange if a restaurant had more than 1 or 2 vegetarian options.

That was just the norm.

During and leading up to the pandemic, plant-based meat became a hot topic. And one of the hottest trends in public markets.

Throughout 2021, analysts at major banks were upgrading companies focused on the “meatless meat” industry.

At the time, everyone was trying the Impossible Burger or a Beyond Meat burger – just to say they thought it tasted like "real meat." Sales were spiking and major restaurant chains were partnering with these companies to offer these options.

Customers were demanding them, right?

Fast forward to today, is this area of the market still growing, and are those companies at the center of it doing well?

Bill Gates would say “YES!”

But let’s ask our nose-biting friend, Doug:

In case you missed it, he said “No.”

In fact, sales of plant-based meat alternatives have been slipping this year, more than anyone was expecting. And publicly traded stocks like Beyond Meat have seen their prices fall straight off a cliff.

Let’s dig into this market and review some of the publicly traded names – Beyond Meat & Impossible Foods..

Beyond Meat

Directly from the horse’s mouth - the CEO of Beyond Meat, Ethan Brown:

Beyond Meat is a leading plant-based meat company offering a portfolio of revolutionary plant-based meats. We build meat directly from plants, an innovation that enables consumers to experience the taste, texture and other sensory attributes of popular animal-based meat products while enjoying the nutritional and environmental benefits of eating our plant-based meat products… By shifting from animal-based meat to plant-based protein, we can positively impact four growing global issues: human health, climate change, constraints on natural resources and animal welfare.

Beyond Meat has targeted 3 “meaty” areas to focus their research on – beef, poultry, and pork. But their flagship product is the Beyond Burger, which you can find in almost any grocery store, a few major restaurant chains, and spilling out of your vegan Aunt’s refrigerator.

The Beyond Burger is made to closely mimic the traditional 80/20 ground beef patty, AKA the star of everyone’s block party BBQ. The issue is that replicating the complexity of meat requires a lot of research and scientific analysis.

And it ends up with an ingredient list like this:

Beyond Meat worked hard to ensure that it was placed in the meat section of every grocery store that carries it to showcase their belief that it so closely resembles meat.

Initially this was an issue because no grocer partner was willing to take such a stance.

Until Whole Foods stepped up in 2016 and agreed to take a chance on the Beyond Burger.

This is a key differentiator for Beyond Meat’s strategy – they did not want to limit their offering to just the “vegan” market, or vegetarians only. They want everyone to partake in their product.

According to Beyond Meat, protein is protein. Whether that protein was derived from a plant or an animal.


  • BYND has seen Net Revenues increase at a staggering 74% CAGR over the last 4 years.
    • While this may not be a sustainable long-term growth trajectory, it does provide a very solid base from which BYND can continue to build and expand its operations from.
  • Beyond Meat clearly showcases their successful marketing ability with incredible penetration into the markets where they are able to sell their product:
    • For example, Beyond Meat has solidified deals with McDonald’s and YUM brands that will materialize into ~$200M in sales between 2023-2025. Their ability to partner with strong brands will continue to help them grow.


  • Inflation is a significant concern for BYND, which already markets a more expensive product than traditional meat. As prices rise, consumers will be less likely to reach for the plant-based meat priced at $7.79/lb and instead opt for the cheaper real-meat option, which stands at $5.03/lb.
  • BYND is in a precarious cash position – as sales continue declining, their net loss in the first 2 quarters of 2022 has already surpassed their entire annual loss in 2021.
    • With only $454M of cash on hand, and losing $97M per quarter, BYND has a very short runway to continue operations without seeking additional capital input from the markets.
  • BYND is overladen with LT debt as well – currently they have $1.15 billion of LT debt on their balance sheet with a market cap of only $937M.
    • This will further dampen their ability to grow as they will reach a point of being limited to raising capital in the equity markets, rather than low-priced debt markets, leading to dilution for current equity holders.
  • There is a natural limitation to the level of adoption expected for plant-based meat alternatives for the foreseeable future. As long as consumers are aware they are not eating meat, there seems to be a ceiling in place for growth in this market.                         


Taco Bell just announced their partnership with Beyond Meat.

At this point, another major fast-food chain jumping on the non-meat meat wagon isn’t that exciting.

What is exciting about this partnership is the fact that Taco Bell has no upcharge for a Beyond Meat taco.

We looked at this above – traditionally these meatless alternatives are more expensive than regular ol’ beef. And in our inflationary environment, that is going to be a painful experience for Beyond.

Everyone is going to choose the cheaper option when their dollars go a shorter distance with each paycheck.

But now, consumers can order a taco and pay the same for regular Carne Asada vs meatless Carne Asada.

This is Beyond Meat’s dream scenario:

That could be a game-changer for Beyond Meat, whose ultimate goal is to underprice regular meat.

If Beyond Meat can improve the efficiencies within their operations and offer their meatless alternatives for a lower price point than beef, then they may have the potential to take further market share from the beef market.

While this is an important development to be aware of, this initial test of a limited-supply, limited-time menu item, only offered in Ohio Taco Bells, is really only the first step in the right direction.

It will take a lot of work for Beyond Meat to be able to broadly offer their product at a price point lower than beef and maintain profitable margins.

Key Metrics

  • Price (as of 9.28.22): $15.87
  • Market Cap: $937M
  • 2021 Net Income: ($97M)
  • Cash: $454M
  • LT Debt: $1.153 billion
  • P/B: 250.7x
  • ROE: -3,897%
  • NTM P/E: 782.9x


Impossible Foods


While Impossible Foods is not publicly traded, they are the largest competitor to Beyond Meat. It would be helpful to understand the difference between these two companies and highlight some key drivers of growth.

I am sure there are some hardcore vegans out there who can describe to you exactly how different each burger tastes, but to the rest of us – there seems to be little difference between the Beyond Burger and the Impossible Burger.

But if we look under the hood, the Impossible Burger uses a blend of soy and potato protein and heme, a fermented soybean extract that gives the burger its “meaty” taste.

On the flip side, Beyond Burger uses a different blend of plant proteins – namely, peas, mung beans and rice.

This difference in structure plays an important role in each company's growth trajectory and stance on a global scale.

In May of 2022, Impossible Foods debuted across Europe for the first time. This was their first foray into the global market.

And they had to do it without their flagship burger.

Impossible’s inclusion of heme, the soybean extract that gives its burger that “meaty” flavor – the signature factor in giving them a leg up over Beyond – is in fact their Achilles heel.

Soy leghemoglobin (heme) received FDA approval in 2018 in the US as a GRAS (Generally Recognized as Safe) additive. Unfortunately, the UK and EU have not approved heme yet and therefore Impossible is unable to sell its Burger products in these markets.

For now, they can only sell their meatless nuggets and sausages.


The meat alternative market may have been a winner for a short period of time, but it does not look like this trend will continue. With new reports of this industry being “too woke” for consumers, expecting continued growth in sales seems almost silly.

19 Wall St analysts cover BYND, with an average price target of $21.62 and a rating breakdown of:

  • HOLD: 14

Don’t catch a falling knife. The marketing ability of BYND is something to be marveled at, but ideally from a distance. There is nothing on the horizon that would play in BYND’s favor at this time, so we think watching from outside of the kitchen is the best play here.

There are other companies that provide some exposure to this market if you are really interested in investing in the meat-alternative market.

Kellogg ($K) owns the Morningstar Farms and Incogmeato brands, which offer full lines of meatless alternatives sold directly to consumers.

In fact, Kellogg has announced its intention to spin off Morningstar Farms to compete directly with Beyond Meat.

And the biggest ingredient that would put Morningstar ahead of Beyond Meat?


In 2021, Morningstar generated $340M in revenue and $50M in EBITDA.

Kellogg expects to spin off Morningstar sometime in 2023 and this would be a solid time to re-evaluate the plant-based meat market for investment. 

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