Vegan burger start-up makes Wall Street debut, doubling share price

The celebrity-backed vegan burger start-up Beyond Meat made a sizzling Wall Street debut Thursday, more than doubling its share price, as investors show an appetite for the growing trend in plant-based diets.

Backed by Hollywood star Leonardo DiCaprio and Microsoft founder Bill Gates, the California-based firm had valued itself at about $1.5 billion at opening on the Nasdaq exchange.

However, it’s starting share price of $25 soon sky-rocketed to $65.75, before ending at $59.43, a valuation of 3.38 billion dollars.

Founded in 2009, the company has tapped into changing consumer appetites as growing numbers of people turn to plant-based meat alternatives, whether vegans who shun all animal products or flexitarians advocating moderate consumption of meat.

Its public offering comes a month after its Silicon-valley rival Impossible linked up with Burger King to offer a plant-based version of its signature Whopper.

Nestle and Unilever are also aiming to cement their presence in the expanding sector.

Beyond Meat’s early trading success is further proof of the mainstream appeal of plant-based foods, according to Bruce Friedrich, director of the Good Food Institute, an organization promoting alternatives to animal products.

Investors “recognize that this is not a niche market but a movement of magnitude and a big financial opportunity,” he told AFP.

“The plant-based meat industry is thriving and consumers cannot get enough of it.”

As climate change movements take hold across the world, enviroment-conscious citizens are looking for ways to reduce their impact on the world, including rethinking their diet.

The food firm says its signature Beyond Burger uses significantly less water, less land, generates fewer greenhouse gas emissions, and requires less energy compared to a US quarter-pound beef burger.

Eating a plant-based protein would “help address concerns related to human health, climate change, resource conservation and animal welfare” as it seeks to compete with the $1.4 trillion global meat industry, it adds.

However, despite its popularity Beyond Meat is still not profitable and recorded a net loss of $30 million in 2018, according to its most recent financial records released Monday.

However, it has seen strong growth, with $88 million in sales in 2018, compared with $33 million in 2017 and $16 million in 2016.

“We have a history of losses, and we may be unable to achieve or sustain profitability,” the firm cautioned in its filing with the Securities and Exchange Commission.

The group said it would use the funds raised to “expand our marketing channels, invest in our distribution and manufacturing facilities, hire additional employees and enhance our technology and production capabilities.”

While soy burgers have existed for quite some time, Beyond Meat is one of several companies that have taken the product up a notch by using sophisticated technology to make it taste, look and smell like meat.

It uses peas, beans and soy to make steak, sausage and minced meat alternatives and uses beets to make its burgers “bleed”. The product is already sold in thousands of supermarkets and restaurants, including TGI Fridays.

Beside Gates and DiCaprio, its early backers include Twitter co-founders Biz Stone and Evan Williams, former McDonald’s director Don Thompson, meat giant Tyson Foods and the Humane Society.