Home Business News Suspicions of fake meat growth make food markets think about the Impossible

Suspicions of fake meat growth make food markets think about the Impossible


© Reuters. FILE PHOTO: Plant-based beef products from Impossible Foods seen among other meat products in the refrigerator at a supermarket in Hong Kong

By Siddharth Cavale and Uday Sampath Kumar

(Reuters) – The US stock market cooling down on the US stock market over plant meat producers has raised suspicions of some investors and analysts about the plan to achieve. Impossible Foods $ 10 billion.

Impossible is looking to go public through an initial public offering or through a merger with a vacancy counting company over the next 12 months, sources told Reuters this month.

However, the market value of a larger competitor Beyond Meat (NASDAQ 🙂 has fallen from a peak of $ 14 billion to nearly $ 8.5 billion and is predicted by some brokers to decline further.

Both companies carry expectations of being big players in a market called fake meat that some predict could be worth $ 85 billion a year by 2030 as dietary habits change.

But with retail sales of some products falling, four investors in the sector told Reuters that Beyond’s 420% increase in value since listing in September 2019 was considered overripe.

Patrick Morris, who has the Eat Beyond vehicle, has invested in three joint venture projects based in Canada, said: “It’s a shock to see some of these valuations come up.

Morris added: “$ 10 billion for Impossible Foods, with Beyond Meat $ 8 or $ 8.5 billion? The first reaction is that these valuations come from space,” Morris added.

Several current investors have told Impossible they should aim for a public listing at a lower valuation where Beyond is trading, a person familiar with the discussions told Reuters.

Impossible declined to comment.

BIG TRANSACTION

While positive signs for plant-based foods, COVID-19 has halted restaurant sales, and industry studies show the industry has yet to convince shoppers. dress.

However, both Beyond and Impossible have signed deals with major restaurant and grocery chains, and the US industry as a whole grew 44% last year during the pandemic.

Sales at Beyond and several other manufacturers are on the rise, but the sales growth of fresh and fully cooked plant-based meat substitutes has declined steadily at US retail stores. from July last year, NielsenIQ data showed.

The data shows that apartment sales growth decreased from 32.6% in the July-September period of last year to 1% in January-March 2021, compared with the same period last year.

Beyond overall sales remained just $ 407 million last year, and its stock is trading at almost 21 times revenue per share, according to Refinitiv data, compared to 1.6x and 1.9 times for Kellogg (NYSE 🙂 Co and Kraft Heinz (NASDAQ :), last year had revenues of $ 13.78 billion and $ 26.19 billion, respectively.

“Food companies need to,” said Christopher Kerr, chief investment officer of Unovis Asset Management, an early investor in Beyond Meat who withdrew cash and now holds stakes in Oedly and Zero Egg. transactions in multiples.

“The question is can they achieve something that represents market valuations tied to sales … right now we’re seeing some pretty high valuations in the market,” added Kerr. .

SPAC BOOM

One reason for the Impossible pricing is due to the explosion of special-purpose acquisitions and early services that saw leaps and bounds for a host of startups. business at launch.

Brian Schaeffer, chief executive of private equity trading platform InvestX, which allows investors to trade in pre-IPO companies, said Impossible was one of the top five most traded stocks on. this platform since its introduction this year.

Schaeffer added: “The SPAC trend is very strong right now… so these kinds of public valuations are turning into interest on private platforms.

However, some of the products that hit the market did not go well.

The UK-based deliveroo food delivery service failed to launch last month.

Although Impossible does not release sales, some industry estimates suggest it accounts for just less than 4% of the market share in the U.S. fake meat industry, compared with 25% for Beyond Meat.

Beyond signed contracts with McDonald’s (NYSE :), PepsiCo (NASDAQ 🙂 and owners of KFC and Taco Bell, Yum Brands while Impossible gave up on McDonald’s last year, citing not being able to deliver on demand scale. .

Impossible burgers and sausages are only available at 20,000 stores globally, compared to Beyond’s 122,000, and it is still seeking regulatory approval in Europe and mainland China, where The genetically modified yeasts they use is prohibited.

“There’s a lot of money (from SPACs) looking too little to go, because the space is too new,” said Curt Albright, a managing partner at alternative protein investment firm Clear Current Capital.

“Whether the pricing is too much or too little, the market will eventually find out.”



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