Beyond Meat, the California-based vegan alternative that aims to replicate the taste and feel of real beef burgers using only plant-based ingredients, will continue the current IPO boom next month. The company has announced an initial share price range of $19-$21, which would value it at somewhere between $1 billion and $1.2 billion. If investor demand proves high enough that initial range could potentially be raised, as happened recently during ride-hailing app Lyft’s March IPO.
Beyond Meat and competitor ‘Impossible Foods’ are credited with taking vegan meat alternatives, particularly beef burger patties, to a new a whole new level. Their target is to develop their products to the point where there is almost no difference between their plant-based alternatives and the taste, texture, look and smell of a genuine beef burger. And they are making impressive progress. The Impossible Burger 2.0, the flagship product of Impossible Foods, was the hit of the January Consumer Electronic Show. The show’s rules were even changed to allow the company to exhibit their veggie burger as an example of ‘food tech’ or ‘agritech’.
Beyond Meat’s products are on a similar level and both companies believe whatever narrow gap still remains in the taste experience between faux and real meat burgers can be closed in the near future. The company’s burger even ‘bleeds’ beet juice for extra authenticity.
But how does a burger made of ingredients including yellow pea, coconut oil, potato starch, mung bean, apple extract, pomegranate fruit powder and, yes, beet juice, manage to achieve a ‘real meat’ taste? For the texture, the company has rigorously tested its patties for the correct density using ‘e-mouth’ machines.
For taste and smell the company’s labs have ‘e-nose’ aroma inspector machines. They isolate over 1000 molecules found in plant and animal matter in order to understand how they combine to contribute to taste and smell. The e-nose samples the air that surrounds a meat burger rather than the meat itself. The scientists then try to match those molecules to the most similar molecules found in the plant kingdom.
It’s a mission that has borne fruit. Many enthusiastic meat eaters rate Beyond Meat’s vegan burger patties as preferable to actual beef alternatives served in fast food burger chains that now offer both in the U.S. Sure, these are not ‘premium’ beef burgers such as those found in gourmet burger restaurants. But being tastier than a McDonald’s et al. beef burger, while at the same time passing or almost passing for meat, is still a great achievement of food engineering. And they will keep getting better with huge sums continuing to be invested in R&D.
Beyond Meat’s faux beef burgers are already on sale in UK supermarkets and the Honest Burgers chain and international expansion continues apace. 2018 revenues reached $87.9 million, up well over double from 2017’s $32.6 million. In keeping with the theme of this year’s ‘tech’ IPOs, Beyond Meat is still loss making, down around $30 million in each of the previous two years. However, with a quickly growing market of vegans and vegetarians and a good portion of meat eaters ready to be convinced into dietary diversification if the product is good enough, there is a belief that revenues can and will grow quickly.
The IPO will seek to raise around $175 million with the proceeds invested in increasing Beyond Meat’s production capacity, logistics and sales networks and continuing R&D.