Clearly, demand was strong for BYND, which doesn't come as much of a surprise as the company and its IPO have a number of positive attributes working in its favor. For starters, it's a play on the "better-for-you" trend that has been re-shaping the food and restaurant industries.
BYND's financials illustrate this shift as revenue growth has surged by triple digit rates. Furthermore, the company is only in the early stages of its growth curve, with plenty of runway ahead. On that note, in its prospectus, the company made an interesting analogy.
In the US, the size of the non-dairy milk category is equivalent to approximately 13% of the size of the dairy milk category. By applying this same strategy to the plant-based meat category, BYND believes it can grow its industry to be at least the same proportion of the $270 bln meat category in the US, which over time would represent a category size of $35 bln in the US alone.
From a deal-specific standpoint, the IPO has a low float of only 9.6 mln shares. The strong demand and relatively low supply is a potent combination that translated into the above-range pricing, and, may translate into a sizable opening pop when it begins trading on the Nasdaq.
And, lastly, the IPO had solid tier one underwriters behind it, including Goldman Sachs, JP Morgan, and Credit Suisse.
BYND is food company that specializes in offering plant-based meats. It builds meat directly from plants, an innovation that enables consumers to experience the taste, texture and aroma of animal-based meat products while enjoying the nutritional benefits of eating plant-based meat products. It also addresses concerns related to human health, climate change, resource conservation and animal welfare. Its motto is "Eat What You Love."
The company has developed three core plant-based product platforms that align with the largest meat categories globally: beef, pork and poultry. It creates plant-based products using proprietary scientific processes that determine the architecture of the animal-based meat it is seeking to replicate and then the company assembles it using plant-derived amino acids, lipids, trace minerals and water.
Beyond Meat has pioneered products like The Beyond Burger and Beyond Sausage, which the company believes closely replicate the sensory experience of meat—from the look of the package and raw product, to the sizzle on the grill, to the juicy and protein-packed satisfaction of biting into a "meaty" burger or sausage.
Instead of marketing to vegans and vegetarians (who represent less than 5% of the US population), BYND requests that grocers place its products in the meat case, where meat-loving consumers are accustomed to shopping for center-of-plate proteins. This positioning in the meat case has helped drive greater brand awareness with end consumers.
Turning to the financials, the company is not yet profitable nor is it EBITDA positive yet and it sounds like it may be a while as BYND says it expects operating expenses and cap-ex will increase substantially in the foreseeable future as it invests in growth. In FY18, the company had an operating loss of ($28.0) mln.
With that said, BYND is growing the top line strongly as revenue more than doubled in 2017 to $32.6 mln and then, in 2018, revenue growth accelerated even more at 170% to $87.9 mln.