Beyond Meat becomes the most shorted stock as meatless mania hits a wall

Can’t believe it’s not beef… Beyond Meat was one of the hottest IPOs of 2019, as beef-fatigued consumers jumped into the plant-based craze. From 2018 to 2020, sales of plant-based meat grew 3X as fast as animal meat sales, while Beyond’s sales quadrupled. Beyond has beefed up fast-food partnerships to attract fans. This month, it teamed up with chicken legend KFC to launch Beyond Fried Chicken nuggets.

• But Beyond shares have tanked 70% since its market debut, and now investors are betting money on it falling even more (aka: they’re shorting the stock). Blame falling sales…
• Last quarter, Beyond’s US sales sank nearly 14% as demand for its protein patties cooled and severe weather damaged its primary US production facility.

A plant in meat’s clothing... Climate activism has become a driving force in the meatless movement. But companies like Beyond and rival Impossible have yet to prove they produce fewer emissions than real meat makers. Plus:

• Plant-based meats cost 30-40% more than real meat. Over half of Americans who’ve tried plant-based alternatives come from six-figure households.
• Despite some nutritional advantages (like: fewer saturated fats) Beyond Burgers contain 5X as much sodium as a ground-beef patty.

THE TAKEAWAY

It’s a double-loss whopper… Beyond is losing market share in a shrinking market. Not only is it losing sales to plant-based competitors — it’s losing out to more meat consumption. Last year the plant-based-meat industry saw 10 straight months of decline. Meanwhile, OG meat giants like Tyson have launched cheaper plant-based options. Still, the meatless market is beginning to rebound as New Year’s resolutions and #Veganuary spotlight health.