Beyond the meat is considered a technology company but produces food

Beyond meat is a food business. Do not say that to investors.

On Thursday, the plant-based food manufacturer serving as a meat substitute has more than doubled in value, offering the company a market capitalization of $ 3.6 billion.

On the basis of last year 's revenues, which stood at $ 87.9 million, Beyond Meat' s turnover is 41 times higher, a type of multiplication generally observed by the fastest growing technology companies. This is not even in the same universe as large food companies, whose value is usually less than twice the income. Hormel is in the high end with 2.3 times sales, while Tyson Foods has a multiple of 0.7.

Located in El Segundo, California, near Los Angeles, with the support of Bay Area technology investors such as Kleiner Perkins and Understand Ventures, co-founded by Ev Williams, of Twitter, Beyond Meat offers much more to the company. 39, high-growth technology investor that money manager focused on traditional food brands.

The company has what it calls an "innovation team" of 63 people, including engineers and researchers, and states in its prospectus that its success is partly based on the protection of "our intellectual property and our proprietary technologies. ".

Beyond Meat, which sells packaged food in grocery stores and also offers hamburgers and other products in 12,000 restaurants, including A & W Canada, TGI Fridays and Carl & Jr., proposed its introduction. on the stock market a price of $ 25 per share, the most upscale, before going into gear. he started to trade.

Investors clearly value the company based on its growth trajectory. Revenues jumped 170% in 2018 after doubling the year before and Beyond Meat even posted a gross profit (the income remaining after taking into account the cost of goods sold) for the first time. last year. Almost all traditional agribusinesses are growing at a single digit rate.

However, Beyond Meat's gross margin (20%) gives the impression that this company looks like a food business and is much thinner than what you see among software developers, Internet companies and manufacturers of devices that occupy the technology sector. Beyond the full cost of research and development and commercial and marketing expenses, Beyond Meat lost $ 30 million last year.

In other words, investors are asked to rate Beyond Meat as a promising technology company because of its growth, intellectual property and research expenditures, and not to pay particular attention to the fact that it is produces and sells foodstuffs.

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