This Beyond Meat Consumer Survey Highlights Some Challenges, Analyst Says
Jayson Derrick , Benzinga
February 12, 2020
The bullish case for plant-based food maker Beyond Meat Inc can't be justified amid mixed consumer survey results, according to Piper Sandler.
The Beyond Meat Analyst
Michael Lavery initiated coverage of Beyond Meat's stock with a Neutral rating and $115 price target.
The Beyond Meat Thesis
Piper Sandler surveyed more than 3,500 U.S. adults as part of the research firm's initiation of coverage. Among those surveyed, 62% of respondents were "not interested" in consuming a plant-based food product. Among the remaining respondents who do eat plant-based food, just 2% prefer Beyond Meat products. In fact, five times as many consumers named a competing brand as their favorite product.
Meanwhile, a separate survey with McDonald's Corp franchisees suggests its Beyond Meat-featured "PLT" sandwich has seen "disappointing" sales so far due to a high price point, the analyst wrote in a note. Among those surveyed, 45% aren't counting on a meatless sandwich to drive significant sales while 60% favor a rollout of a new chicken sandwich which is being tested in a few small markets.
Encouragingly, 15% of respondents were willing to try plant-based food while 7% of people surveyed have no brand preference, the analyst wrote. This suggests potential upside for Beyond Meat to expand beyond its existing client base.
McDonald's alone represents a $100 million annual opportunity in the U.S. and another $50 million in global markets, however, this opportunity is "largely priced into valuation" at current valuation levels.
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