ByCCN Markets: Beyond Meat stock tumbled 4% intoday’s pre-market tradingfollowing the announcement of a new competitor – Tyson Foods. The poultry powerhouse is set to enter the meatless arena later this summer, beginning with a plant-based “chicken” nugget.Beyond Meatinvestors pulled it together. The stock price is already back in the green for the day.
Tyson Foods Is a Powerful Foe
Previously an investor inBeyond Meat, Tyson Foodssold its stakein April just before the company went public. The investor-investee relationship between the two took a turn for the worse once Tyson decided to create its own line of plant-based products in February.
The decision to separate ties with the plant-focused startup appears to be working out. The Tyson Foods stock price is up nearly 60% since the start of the year. The company is the largest meat producer in the world, consistently aFortune top 100 company, and boasts $3 billionof profitin 2018. If any old guard food companies can knock out Beyond Meat, it’s Tyson.
Beyond Meat Stock’s Is on Rocky Ground
Since going public in May, the Beyond Meat stock price has climbedalmost 500%. But the future of what stock market analysts and investors once considered a golden child is looking grim. Outside of Tyson Foods, Beyond Meat faces stiff competition fromImpossible Foods, which has anotable partnershipwith Burger King.
Market analysts arebeginning to pull backon the Beyond Meat hype, at least temporarily, citing unsustainable price growth, numerous competitors, and an overvaluation of the plant-based meat market. Additionally,studies have surfaced, revealing that plant-based proteins aren’t necessarily healthier than meat alternatives.
Not All Analysts Agree
Some analysts still have a bullish outlook for the Beyond Meat stock price. Analysts at JPMorgan predict that the company maystrike a dealwith McDonald’s sometime this year to rival Burger King’s Impossible Burger. Considering that McDonald’s former CEO and COO Donald Thompson sits on the Beyond Meat board, the bet isn’t farfetched. A partnership of this magnitude could boost the stock price an additional 30%.
Beyond Meat’s greatest obstacle comes down to its ability to meet demand, though. Tyson Foods and new market-entrant Nestle have the bankroll and production capacity to take over the market. If Beyond Meat is unable to convince McDonald’s it can meet the fast food giant’s demands, then an established company like Nestle could easily slide in to replace it.
Nestle is already working with McDonald’sin Germanyand is looking to extend the partnership globally. So, there’s little wiggle room for any Beyond Meat mistakes.
About The Author
Steven Buchko has been in the cryptocurrency and blockchain industry for over two years. Previously the Executive Editor at CoinCentral, he is now a contributing writer for CCN. Steven is also a co-founder of Coin Clear, a mobile app that turns your daily spending habits into cryptocurrency investments.You can follow him on Twitter @TheRealBucci or email him at[email protected]
This article was edited byGerelyn Terzo.