What do Arnold Schwarzenegger, 9-time Gold Medalist Carl Lewis, Venus Williams, soccer star Alex Morgan and 5-time Formula One World Champion, Lewis Hamilton have in common? They don’t eat meat. Maybe The Game Changers, a documentary featuring elite athletes who thrive on plant-based diets, has yet to convince you that your meat consumption is the only obstacle between you and super-athlete status. Regardless, the environmental impacts of the global meat industry should be enough for you to reconsider your consumption. Global food production, alone, accounts for a quarter of global greenhouse gas (GHG) emissions and most of that comes from meat. From farm to table, a kg of beef emits 60 kg of GHG, while a kg of vegetables emits 0.4 kg. Further, 77% of agricultural land is for grazing and growing feed for meat, while meat only provides 18% of the world’s calories and 37% of its protein.
Facing the problem head-on, Wall Street darling Beyond Meat (BYND) and privately held rival Impossible Foods, have reimagined meat and launched lines of plant-based products with roughly 10% the carbon footprint and 5% the land-use of traditional meat. As these high-flying startups have begun to conquer the $1 trillion global meat industry, “Big Meat” has taken notice. Companies such as Tyson (TSN), Smithfield, Hormel (HRL), Conagra (CAG), and Nestle (NSRGY) have recently launched their own plant-based products in hopes of keeping pace with these new earth friendly upstarts. Even Ikea has rethought its famous Swedish meatball, now offering a plant-based version.
Beyond Meat’s stock is up 68% year to date. It currently sports a market cap of $8 billion, or 25 times 2019 revenues of $297 million. The stock trades at 16 times 2020 revenue forecasts of $460 million and 11 times 2021 consensus of $707 million. Impossible Foods is valued at almost $4 billion based on its most recent stage of venture funding, which is about 40 times its estimated revenues for 2019. For reference, Tyson Foods trades at roughly one-half times revenues with a market cap of $22 billion.
So, what’s in this “mystery meat”, anyway? Both companies assert that the animal simply acts as a way of packaging amino acids, lipids, carbohydrates, and trace minerals found in plants they eat. Beyond Meat’s products derive their protein from peas, rice, and a variety of beans, their carbohydrates from potato starch, and their flavor from beet juice and apple extract. Impossible Food’s products obtain their protein from soy and potatoes, and flavor from heme, which is the same iron-containing molecule that gives animal-based meat its flavor. Plant based products are proliferating on grocery shelves and restaurants across the US and, increasingly, the world (along with old fashioned vegetables). Other old line food companies whose products use meat and large quantities of sugar, salt and artificial ingredients are also challenged, like Campbells Soup (CPB), Pepsi (PEP), Kellog (K), and Kraft Heinz (KHC).
New research debunks long-standing claims that you need meat to get protein. Both Beyond Meat and Impossible Foods products have comparable protein content to the animal-based meats that they mimic and taste great. Plant-based diets lead to weight loss, lower blood pressure and cholesterol, reduced inflammation, and even a lower incidence of cancer. Americans are also seemingly indifferent to the very grizzly business of slaughtering millions of animals each day to put meat on their plates. Go beyond and do the increasingly easy task of decarbonizing your diet and unlock your inner super-athlete.
