Beyond Meat’s Path to $1 Billion Relies on Restaurants, UBS Says

(Bloomberg) -- For Beyond Meat to reach $1 billion in food service revenues it would need to add about 120,000 new outlets at current levels, according to UBS analyst Steven Strycula.

Beyond Meat’s revenue mix is currently split evenly between retail and food service with about 23,000 food service outlets generating roughly $7,000 of annualized sales each in the third quarter, Strycula writes.

An expansion of McDonald’s plant-based sandwich into U.S. markets alone could add more than $300 million in annual revenue, the analyst said. The fast food chain is only testing Beyond patties for its P.L.T. sandwiches in Canada, and it’s using a Nestle product for the version sold in Germany and Israel.

Two additional sources of growth could also be to partner with more national quick service restaurants and increase same-door restaurant productivity via new menu items and greater awareness, Strycula said

More than half of franchisees surveyed by UBS said that plant-based-offerings help increase foot traffic and 70% expect them to increase sales over the next 12 months.

UBS expects Beyond Meat’s net sales to grow at a 36% compounded annual growth rate in the next five years and reach $1.8 billion in revenue by 2025, up from an estimated $275 million in 2019.

Strycula maintains his neutral rating and $85 price target.

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To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Jennifer Bissell-Linsk

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