Beyond Meat slides after Whole Foods inks a deal with a major competitor
- Beyond Meat shares slid on news that competitor The Meatless Farm secured a deal to sell its burgers at Whole Foods in the US.
- The Meatless Farm, which is a British company, now sells its burgers in four countries outside of the UK.
- Beyond Meat has seen its 700% post-IPO surge lose steam in recent days as competition in the plant-based meat alternative market ramps up.
- Watch Beyond Meat trade live.
The British are coming for a piece of the US plant-based alternative meat market, and it's pushing shares of Beyond Meat lower.
Shares of the plant-based meat alternatives company fell as much as 10% Monday after British competitor The Meatless Farm announced that it had secured a deal to sell its burgers at Whole Foods stores in the US. The company will also establish an office in New York to manage its expansion into the US market.
"The market is really hotting up and it is a game changer to be working with Whole Foods Market," said Rob Woodall, CEO of The Meatless Farm. "The US meat alternative market is currently the largest in the world and is strategically very important for the category."
The US is the fourth market outside of the UK for The Meatless Farm, which was founded in Leeds in 2017. The company also sells its meatless products in Canada, Sweden, and the UAE.
Beyond Meat is the best-performing US IPO of 2019 so far, having spiked as much as 700% from its offer price. However, the stock has experienced several bouts of volatility in recent weeks, amid reports of increased competition in plant-based meat alternatives.
Major companies such as Tyson Foods and Nestle have announced similar plant-based meat products, while competitor Impossible Foods has had success working with Burger King to launch the Impossible Whopper across the US.
The impact The Meatless Farm's announcement is having on Beyond shows just how sensitive the stock has become to anything that could either boost or diminish demand for plant-based "meat." For example, the company's stock gained when a shortage of Impossible Burgers reportedly hit restaurants like White Castle and Red Robin.
Beyond also saw shares climb when it announced a new ground beef product, and on the news that its Beyond breakfast sandwiches were available at Tim Hortons across Canada. But the stock stumbled when Taco Bell would not add any plant-based meat to its menus.
As it stands right now, Beyond's stock price is too extended for anyone to consider it a buying opportunity. No Wall Street analyst who covers the stock has a rating above neutral, and one bear says that now is the time to sell.
Overall, the stakes are high for companies in the industry. Wall Street analysts estimate that the market - currently about $14 billion in the US - could grow to be roughly $140 billion over the next decade.
Shares of Beyond Meat are now up more than 450% since the company's IPO.