02. March 2021 | 09:45 CET
Beyond Meat, The Very Good Food Company, Nestlé: This growth tastes good
PHW Group's latest veggie study shows it: Meatless is the trend. In Germany, one in two people already consciously abstains from meat now and then. Younger people, in particular, prefer meatless meals. Of the 18 to 29-year-olds surveyed, 14% eat vegetarian and 3% vegan. For companies that offer meat-free alternatives, this is excellent growth potential - after all, millennials will eventually settle down and earn more. In this case, premium providers around meat-free products could benefit the most.
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ISIN: CA88340B1094 , CH0038863350 , US08862E1091
Beyond Meat likes it fast and cheap
Beyond Meat impressively demonstrates that vegan burgers can also taste good. The food startup relies on peas and uses them to form burger patties with a meaty, robust taste and are therefore also well received by meat fans. The idea of meatless burgers caused a furor on the stock market, especially in the summer of 2019. At that time, Beyond Meat's share price climbed to over EUR 200. Currently, the share has reached a moderate level around EUR 123.00 and forms a flat upward trend on a one-year horizon.
Beyond Meat recently announced strategic partnerships with McDonald's and Yum Brands, which includes Taco Bell, KFC and Pizza Hut. In this way, sales are expected to increase further. These collaborations even eclipsed Beyond Meat's weak numbers. The Company reported a loss of 34 cents per share, even undercutting analysts' already weak expectations. Even in terms of sales, the Company fell short of expectations. Now, cooperation with the big players in the industry is supposed to help. For Beyond Meat, this could mean hope but also a burden. The extent to which the target group likes fast food remains an open question.
The Very Good Food Company: Vegan food like mother's cooking
The Canadian Company, The Very Good Food Company, is taking a different approach than Beyond Meat. The Company started in a home kitchen a few years ago and has been growing rapidly ever since. The twist is that The Very Good Food Company deliberately aims to offer customers the full range of vegan dishes, avoiding highly processed foods. The vegan dishes include delicious sausages or ribs, which at first glance look more like a hearty country butcher shop than a hip bar in Berlin-Kreuzberg. Nevertheless, the Canadians' range is vegan all round. Recently, the Company even bought a vegan cheese supplier and reserves the right to make further acquisitions. Even the step to Europe seems evident for the secret tip from Canada.
The Company expects the market for plant-based meat substitutes to triple by 2026. The Canadians want a big slice of this pie and may have hit a nerve with the appealing product presentation and the wide range. To make the brand known, The Very Good Food Company is relying on a mix of offline and online business. Customers can already sample the dishes in two restaurants and, if they wish, can also stock up for the kitchen at home from affiliated retail stores. It is also possible to order the products online. The concept is bearing fruit: many retailers also want to offer the products. The figures are also right: compared with the previous year, sales in the third quarter rose by 322% annually. The stock has entered consolidation after a rapid rise in 2020.
Nestlé needs to reinvent itself
While companies like The Very Good Food Company focus on growth, Nestlé is all about staying on the ball with current trends. To that end, the industry's big players are increasingly focusing on protein foods and cutting back on sugar. But that's not enough. In the third quarter, Nestlé's sales fell by 9.4%. Partly due to the weak figures, the Company is revamping itself, is increasingly targeting allergy sufferers and wants to offer healthier products. In the long term, Nestlé intends to grow by up to 6% annually. However, it remains to be seen whether the Company will achieve this.
Shares like Nestlé are suitable for very conservative investors. A dividend yield of slightly less than 3% also suits them. Those who like it a bit more dynamic can look at startups around vegan nutrition. Beyond Meat offers fast food, while The Very Good Food Company targets the high-price segment with hardly any industrially processed food. First impressions are promising.