From JoNova

By Jo Nova

Beyond Meat may be beyond saving — it turned $4b into “a dumpster fire”

Like a microcosm of the climate change debate, a group of investors thought they could make a profit while also saving animals, making people healthier, and changing the global climate all at the same time in a nifty 4 for 1.  The UN recognised it as a Champion of the Earth for “science and innovation”. Bill Gates tossed money at it.

But it turns out it was hard to recreate a steak without having a cow or 100 million years to evolve something competitive, economical and tasty. Cows are very efficient factories, in that they come with their own chemical plants, filters, thermostats, and barriers to stop infection, they can transport themselves and they make more cows too. So, the factory imitation was never going to be cheaper, at least not for years.

Like everything in the climate debate — everyone says they believe, but no one believes enough to spend $19.95 on fake burger meat. So, it was a wildly ambitious product, not-yet-invented, not-safety-tested, and without much appeal to 99% of the population.

Financial teardown: How Beyond Meat burned $4 billion (and its reputation)

By Jason Andrew, SmartCompany

What started as Silicon Valley’s next big thing is now an absolute dumpster fire.

After raising money from Bill Gates, going public for >$4 billion, and even partnering with Kim Kardashian, Beyond Meat is now the laughing stock of the NASDAQ.

The business has lost 96% of its equity value since IPO, is burning ~$20-$30 million in cash every quarter, and has over $1 billion in debt due in 2027.

As Jason Andrew points out it was doomed from the start. Since 2009 it has never had a single year in profit, and in 2019 at the peak, it was IPO’d at a glorious 40X revenue multiple, eclipsing even Facebook which launched at 28 X.

These ratios might have worked for a silicon chip company or a tech giant but was “ridiculous” for a food company competing on high costs and thin margins. As it happens, not only were customers not impressed with the climate control feature on the burgers, but they weren’t too sure it was really healthier than meat. These are ultraprocessed foods, may contain seed oils, or who knows what additives? So even the super health-conscious vegan climate activist might have had a dilemma.

It’s just another reminder of how a fantasy fashion swept the modern distracted world off its feet and burned up another $4 billion dollars.

It was all too easy when people could borrow up big on near 0% interest. It’s another bubble fed with a fiat currency.

There are very strong rumours Beyond Meat will have to file for bankruptcy, given that it has a billion dollars in debt. But the company seems to be trying to transition into a high protein health niche. They are even dropping the word “meat”. Perhaps it’s not a word that appeals to the core market of vegan eco-worriers?

h/t ClimateDepot

Pascal Shirley | Beyond Meat burger