Investment Proposal- Beyond Meat

TO:                Clark Hansen, CEO of Anima Mundi Development Partners

FROM:          Mor Bulis, Research and Development Member 

DATE:           July 8, 2021

SUBJECT:     Beyond Meat Sustainability

As a member of the research and development team at AMDP, I have found that Beyond Meat would be a good company for AMDP to consider for investment and funding, given its focus on sustainability and socially responsible action in business. Additionally I will argue that Beyond Meat will need to continue improving and proving their commitment to sustainability. The current covid-19 pandemic has taken a toll on many companies and should be taken into consideration when looking at the company’s revenue. 

Standards of AMDP

There are several standards that we feel are valuable and these standards must be met for a company to be considered for funding from us. These standards include the Triple Bottom Line, Social Enterprise, Corporate Social Responsibility and Carbon Footprint.    

Triple Bottom Line

The triple bottom line is an accounting framework with three parts. These three parts can be represented by the following: 

• Social

• Environmental

• Financial 

The social category considers everyone as stakeholders which means employees and communities are part of the business strategy. Environmental involves public opinion, consumer purchasing power and an awareness of the businesses effect on the environment. The final category is financial, and involves making a profit while still being in line with nature and people (University of Wisconsin, 2021).

Social Enterprise

A social enterprise is a common good corporation with a purpose to create profits that benefit people and places for future generations. Social enterprises can take on different models, legal structures and roles but all share a purpose of common good (WVS, 2021). At our company social enterprise is important because we share the value of keeping future generations healthy. 

Corporate Social Responsibility

Corporate social responsibility has a goal of contributing to the well-being of communities and society. Our business also agrees with Harvard Business Review which argues that many think too broadly about CSR and the main goals of CSR should be “to align a company’s social and environmental activities with its business purpose and values” (Harvard Business Review, 2015). 

Carbon Footprint

Carbon Footprint is the total amount of carbon dioxide released into the atmosphere as a result of human activities (UCAR). Every activity which requires fossil fuels, is sending carbon dioxide into the atmosphere. Carbon footprints are important to keep in mind for our company because we value future generations and human life.

Background about Beyond Meat

Beyond Meat is a plant meat burger that looks and tastes exactly like a beef burger. In 2009 Ethan Brown founded the company. Beyond Meat’s mission statement says, “By shifting from animal to plant-based meat, [they] can positively impact four growing global issues: human health, climate change, constraints on natural resources, and animal welfare” (Beyond Meat). Immediately from the mission statement and the website alone, it is clear that Beyond Meat has at least some form of focus on Corporate Social Responsibility, Social Enterprise, Triple Bottom Line, and Carbon Footprint. One of the first facts I saw on the Beyond Meat website was how Beyond Meat produces 90% fewer GHGE. GHGE is a low-carbon diet and refers to “making lifestyle choices related to food consumption to reduce resulting greenhouse gas emissions” (Wikipedia).

 

Financial Record

According to the Income Statement of Beyond Meat and as can be seen in Figure 1 below, we can see that Beyond Meat has been on an exponential growth from 2017 to 2020. The company’s annual total revenue at the end of 2017 was $32,581 M, at the end of 2018 was $87,934 M, at the end of 2019 was $297,897 M, and at the end of 2020 was $406,785 M. Also, their Gross Profit went up from being -$2,191 M at the end of 2017, to being $122,275 M at the end of 2020 (Yahoo Finance).

 

 

Figure 1

Another point to look at is that before the covid-19 pandemic Beyond Meat stock was significantly high. However, during the pandemic—as with many other businesses— their stock fell by 7%. The plant-based protein maker reported a much larger than expected quarterly loss and sales that also missed the mark, as the pandemic continues to hamper its foodservice business. (Market Watch). It is my belief that the stock will rise back to what it originally was after the pandemic ends.

 

Critical Perspectives 

There are several articles on Beyond Meat. All of which are helpful for evaluating the company's reputation and sustainable practices. To begin, it is important to recognize how crucial planet-based diets are. According to the Food and Agriculture Organization of the United Nations, “Plant-based diets are optimal for human health, too, according to diet guidelines produced by the US, Canada, and Brazil; both North American guidelines emphasize creating a plate 75% full of vegetables, fruits, and whole grains and increasing consumption of plant proteins such as beans, legumes, and soy, for instance” (FAO). Obviously Beyond Meat is helping to create a 75% plant-based diet. However, critics do mention a couple of areas to be weary of when it comes to the Beyond Meat company. To be clear, all of these critics still think Beyond Meat is sustainable and healthy, they are just adding to what the company can do in order to continue to grow. For example, Jared Wolf writes in his article “Better brands: Is Beyond Meat Sustainable?” that “sustainable farming practices are more important than organic in [Beyond Meat’s] situation. And Beyond hasn’t thrown up that sustainable farming designation yet” (Wolf, 2021). So, while Beyond Meat is doing a lot of things right, they can still continue to grow as a company and be aware of their environmental impact. It is also critical to recall that “Farming and livestock contribute up to 10% of all U.S. GHGs1. And we all know cows put out methane and produce manure—that’s just what happens on a farm” (White Wave, 2021). Beyond Meat is doing their best to eliminate this contribution with their plant-based products. 

Final Recommendation

With this in context, I strongly believe that Beyond Meat is a great company for AMDP to consider investing in. As discussed in my memo, while Beyond Meat has some areas that they can improve upon, their growth-story is just starting to unfold. There will be plenty of opportunities going forward, particularly in a world where consumers have become more health-conscious, for Beyond Meat to continue showcasing why they deserve to be in association with AMDP. 

 

Citations

About. Beyond Meat - Go Beyond®. (n.d.). https://www.beyondmeat.com/about/. 

 A Simple Explanation of the Triple Bottom Line: University of Wisconsin. University of Wisconsin Sustainable Management Degree. (2021, April 1). https://sustain.wisconsin.edu/sustainability/triple-bottom-line/. 

Assis, C. (2021, May 6). Beyond Meat stock dives 7% after company swings to first-quarter loss. MarketWatch. https://www.marketwatch.com/story/beyond-meat-stock-dives-8-after-company-swings-to-first-quarter-loss-11620333017. 

Carbon Positive. Horizon. (2021, March 19). https://horizon.com/carbon-positive/. 

Dietary guidelines and sustainability. Food and Agriculture Organization of the United Nations. (n.d.). http://www.fao.org/nutrition/education/food-dietary-guidelines/background/sustainable-dietary-guidelines/en/. 

Plant-based meat critics say it's not as healthy or sustainable as proponents claim. Let's look at the nutrition and ecological science. Genetic Literacy Project. (2020, January 31). https://geneticliteracyproject.org/2020/01/27/plant-based-meat-critics-say-its-not-as-healthy-or-sustainable-as-proponents-claim-lets-look-at-the-nutrition-and-ecological-science/. 

SeventhQueen. (2021, January 29). Better brands: Is Beyond Meat Sustainable? Sustainable Review. https://sustainablereview.com/is-beyond-meat-sustainable/. 

The Truth About CSR. Harvard Business Review. (2015, March 9). https://hbr.org/2015/01/the-truth-about-csr. 

What's Your Carbon Footprint? What's Your Carbon Footprint? | UCAR Center for Science Education. (n.d.). https://scied.ucar.edu/learning-zone/climate-solutions/carbon-footprint. 

Wikimedia Foundation. (2021, May 17). Low-carbon diet. Wikipedia. https://en.wikipedia.org/wiki/Low-carbon_diet#:~:text=A%20low%2Dcarbon%20diet%20refers,long%2Dterm%20 sustainability%20of%20 humanity. 

Wright, P. (n.d.). What is a Social Enterprise: Definitions and Distinctions. wvscourses.com. https://wvscourses.com/what-is-a-social-enterprise/. 

Yahoo! (2021, July 7). Beyond Meat, Inc. (BYND) Income Statement. Yahoo! Finance. https://finance.yahoo.com/quote/BYND/financials?p=BYND.