Fri, May 03, 2019 - Page 10 News List

Beyond Meat raises US$241m

MAKING ENDS MEAT:The vegan foods company still has yet to record a profit, although it has seen strong sales growth from US$16m in 2016 to US$88m last year

AFP, NEW YORK

Vegan burger upstart Beyond Meat Inc, whose backers include Hollywood star Leonardo DiCaprio and Microsoft Corp founder Bill Gates, has raised US$241 million from its initial public offering, valuing the firm at about US$1.5 billion.

The California-based firm said it on Wednesday sold 9.625 million shares on the NASDAQ exchange at US$25 each, the top of its offer range.

Reflecting strong investor demand, it had increased the offer price of its shares to US$23 to US$25 from US$19 to US$21.

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,” who advocate moderate consumption of meat.

“We believe that consumer awareness of the perceived negative health, environmental and animal-welfare impacts of animal-based meat consumption has resulted in a surge in demand for viable plant-based protein alternatives,” it said in its prospectus.

The firm said it believes that eating 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 US$1.4 trillion global meat industry.

Despite the popularity of its signature Beyond Burger and other products, Beyond Meat is still not profitable and recorded a net loss of US$30 million last year, according to its financial records released on Monday.

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

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

The group said that 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.”

Like fellow “veggie burger” maker Impossible Foods Inc, Beyond Meat uses sophisticated technologies to replicate as closely as possible the taste, color, smell and texture of meat.

It uses peas, beans and soy to make steaks and sausages or replace minced meat in tacos and spaghetti bolognese.

The Beyond Burger, which uses beets to make it “bleed,” is sold in thousands of supermarkets and restaurants, including TGI Fridays.

Meanwhile, Impossible Foods has linked up with Burger King to offer a vegan version of its signature Whopper.

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

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