Is It Time To Buy BYND Stock?
Meat stocks have been in quite a bit of trouble lately. Companies that have been supplying meat for decades are now facing troubles with their supplies, no thanks to Covid-19. For instance, Tyson Foods (TSN Stock Report), one of the largest US meat processors, warned that millions of pounds of meat will disappear from the supply chain. This came after pork, beef and chicken plants were being forced to close. That results in a limited supply of meat available in grocery stores until facilities can reopen.
With the supply chain on the verge of breaking, hundreds more Tyson workers have tested positive for Covid-19 in recent weeks. So far, there have been 7,185 cases of Covid-19 tied to Tyson (and still counting).
Beyond Meat Stock Breaks Out On New China Deal; Will It Continue?
The market for plant-based protein continues to grow, undeterred by the Covid-19 pandemic. The outbreak, thus far, has been helping to drive growth. But some analysts are skeptical that this growth will continue beyond the pandemic. That said, Beyond Meat (BYND stock report) has been quite successful in creating new partnerships with various large food chains.
Beyond Meat will expand further into China after announcing a new distribution deal with Sinodis. The China-based food distributor has a huge network of 4,500 wholesalers, restaurant chains, and hotels in China. This news sent the stock 22% higher on Monday. It is currently trading at $162.46. Since our first coverage of Beyond Meat, the stock has gone up 20%.
“Our goal is to increase availability of plant-based meat globally, providing consumers with more choice and access to the nutritional and environmental benefits of plant-based meat,” Beyond Meat Chief Growth Officer Chuck Muth said in a news release. “China is an important market given its large population and interest in plant-based proteins.”
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Plant-Based Meat To Benefit Beyond Meat Stock In The Long Run
While many still prefer real meat over plant-based meat, we have seen a shift in habits among consumers. Consumers are becoming more health conscious, paying attention to what they are putting into their body. Plant-based diets would increase in popularity. I’m not saying that we should completely avoid real meat and switch to a vegan diet. As much as I like the taste of Beyond Meat burgers, I am still a meat lover. What I’m trying to say is that, a diet consisting of a mix of real meat and plant-based meat could ensure a more balanced diet.
Over 3,300 Starbucks (SBUX Stock Report) stores across China will now offer a new plant-based food menu. This partnership will see Beyond Meat products in multiple items including pesto pasta, classic lasagna, and a spicy and sour wrap. Furthermore, Beyond Meat also has an agreement with Yum China’s (YUMC Stock Report) KFC, Taco Bell, and Pizza Hut restaurants for a limited time. The partnership with Yum China may be a short one. But one thing’s for sure. If there’s a huge demand coming from Yum China, we might see another breakout in BYND stock.
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What Does The Future Hold For Beyond Meat?
For Beyond Meat investors, the news of the company entering the world’s most populous market has gotten off to a great start. As Beyond Meat has just entered the Chinese market, we do not know what the consumers’ acceptance there will be like. With time however, there is a possibility that we could witness an explosion in the popularity of meat alternatives, as parts of the EU and US have seen.
But here is one reason why investors might want to be optimistic about the Chinese market. China doesn’t produce enough meat to cater to its huge population. Even though China could import meat from all over the world to meet its demand, it may not be sustainable in the long run. As such, it is safe to assume that the demand for meat alternatives will gain a foothold there. Judging from Monday’s gains in BYND stock, investors are certainly betting on its growth prospects in the world’s second largest economy.
