Billions in investment but a branding catastrophe
There are no doubts that BYND is going nowhere! But why?
It's worth mentioning that they had a first wave of layoff (~40) in August, followed by second wave that happened yesterday. Yesterday more than half (words say 75%) of R&D department were notified virtually that they no longer work for BYND. Company has been struggling with cash flow for months, words on the street say "they only have cash till Feb"; that was before the recent massive layoff. But why a leading brand should struggle?
++ POOR MANAGEMENT: They were so hyped about early-stage growth (called early adoption) that they mistakenly imagined they growth rate will stay somewhat consistent for years and plant-based meant is indeed the future (something like Apple and Mac). Well obviously, they were wrong! Adam Hanft in an article for AFN talks about this in depth but highlights are that:
"If you’re selling a revolutionary capsule that transports you anywhere in the world, in 30 seconds, you don’t need to say more than that. It’s what I call the “Declarative Moment.” A simple statement of being. But soon, 15 companies will be marketing that capsule. You’ll need to differentiate."
As Adam mentioned in the article when the early buzz of "plant-based meat" was cooled off meaning the category itself was not interesting enough, a product wouldn't sell just because it is a plant-based meant! That's were marketing and brand differentiation comes in, it is an area that almost all of the plant-based companies have failed! They give consumers no reason to consume their product over competitors, or even over regular meat; other than "it is plant-based, save the planet". If you look into the founders, it all makes sense, vegetarian scientists! They are not regular people, and they are not thinking clearly; they believe all that matters is the taste and texture and that would help to drive the sales. They don't look at the fact that many people have other reasons not to consume plant-based meant, one for example is "this is lab meat, and it is not safe to consume"! We have not seen any marketing campaign trying to address the general concerns around plant-based meant safety; not to mention the disaster that happened with Kim Kardashian Promo Ad! Even when they spend millions to bring Kim Kardashian on board, they make a mistake of INTENSIONALLY cutting out the senses that she is eating the Beyond Meat only to terrify people who are already avoiding plant-based meats based on the logic of "it is lab based so not safe".
POOR MANAGEMENT doesn't end with branding and marketing! As mentioned, elusive thoughts of "growth will stay consistent" caused spending spree! Many unthoughtful partnerships and contracts that they have no easy way out, massive rounds of hirings, and a new building! Just to clarify on that, their contract for their new R&D building will put a dent into their cash flow for years to come and the only reason they needed a new building was that "they were expanding rapidly" which tuned out to not be the case and with 75% layoffs (and more to come) the new gigantic building will be empty for sure!
"Composite man" already knows that! (If you are not familiar with this term, google "Composite man theory")
Chart obviously shows no signs of bottoming and even if it does after such a painful period it would need a long time to consolidate at the bottom! every upward move will see massive selling pressure, all the investors, and shareholders trying to on-load some shares at higher prices. Revival of BYND will most likely not happen, or at least not in the near future (not in this decade)!
It's worth mentioning that they had a first wave of layoff (~40) in August, followed by second wave that happened yesterday. Yesterday more than half (words say 75%) of R&D department were notified virtually that they no longer work for BYND. Company has been struggling with cash flow for months, words on the street say "they only have cash till Feb"; that was before the recent massive layoff. But why a leading brand should struggle?
++ POOR MANAGEMENT: They were so hyped about early-stage growth (called early adoption) that they mistakenly imagined they growth rate will stay somewhat consistent for years and plant-based meant is indeed the future (something like Apple and Mac). Well obviously, they were wrong! Adam Hanft in an article for AFN talks about this in depth but highlights are that:
"If you’re selling a revolutionary capsule that transports you anywhere in the world, in 30 seconds, you don’t need to say more than that. It’s what I call the “Declarative Moment.” A simple statement of being. But soon, 15 companies will be marketing that capsule. You’ll need to differentiate."
As Adam mentioned in the article when the early buzz of "plant-based meat" was cooled off meaning the category itself was not interesting enough, a product wouldn't sell just because it is a plant-based meant! That's were marketing and brand differentiation comes in, it is an area that almost all of the plant-based companies have failed! They give consumers no reason to consume their product over competitors, or even over regular meat; other than "it is plant-based, save the planet". If you look into the founders, it all makes sense, vegetarian scientists! They are not regular people, and they are not thinking clearly; they believe all that matters is the taste and texture and that would help to drive the sales. They don't look at the fact that many people have other reasons not to consume plant-based meant, one for example is "this is lab meat, and it is not safe to consume"! We have not seen any marketing campaign trying to address the general concerns around plant-based meant safety; not to mention the disaster that happened with Kim Kardashian Promo Ad! Even when they spend millions to bring Kim Kardashian on board, they make a mistake of INTENSIONALLY cutting out the senses that she is eating the Beyond Meat only to terrify people who are already avoiding plant-based meats based on the logic of "it is lab based so not safe".
POOR MANAGEMENT doesn't end with branding and marketing! As mentioned, elusive thoughts of "growth will stay consistent" caused spending spree! Many unthoughtful partnerships and contracts that they have no easy way out, massive rounds of hirings, and a new building! Just to clarify on that, their contract for their new R&D building will put a dent into their cash flow for years to come and the only reason they needed a new building was that "they were expanding rapidly" which tuned out to not be the case and with 75% layoffs (and more to come) the new gigantic building will be empty for sure!
"Composite man" already knows that! (If you are not familiar with this term, google "Composite man theory")
Chart obviously shows no signs of bottoming and even if it does after such a painful period it would need a long time to consolidate at the bottom! every upward move will see massive selling pressure, all the investors, and shareholders trying to on-load some shares at higher prices. Revival of BYND will most likely not happen, or at least not in the near future (not in this decade)!
Comment:
Update: Last 5 Weeks been as anticipated, every small upward move came into selling wall and as the title says, "There are no doubts that BYND is going nowhere!" for now! It is hard for investors who blindly invested their savings in stocks that were popping off after "Covid Printing Boost", but BYND is almost 95% down over the scope of less than 2 years, a REVIVAL (meaning new ATH) as mentioned is unlikely, or at least not in the near future (not in this decade)! STOP TRYING TO FIGHT THE MARKETS! FOLLOW THE MARKETS!