Is Beyond Meat’s market share as large as management claims?

Beyond Meat Inc (NASDAQ: BYND) reported a solid revenue beat in its second quarter results on Aug. 5 but investors were more focused on a 31 cent per share loss versus expectations of a 24 cent per share loss. Net loss widened from $10.2 million in the same quarter last year to a net loss of $19.7 million.

Management was forced to take on the role of damage control during its post-earnings conference call as shares fell around 5% immediately following the headline numbers. During the call Beyond Meat CEO Ethan Brown touted the company’s market-leading position to reaffirm its longer-term outlook.

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For example, Brown said that sales were up 32% year-over-year while it reaffirmed top ranks in the plant-based category in terms of dollar share and brand awareness. To better understand the company’s market positioning claims, Invezz reached out to Simporter, an analytics company that uses billions of data points to better predict consumer demand.

Beyond Meat’s leadership status is confirmed

Simporter CEO Dillon Hall told Invezz in an interview that Beyond Meat is “way ahead of the pack” in terms of online consumer interest across search, reviews, and social media data. Beyond Meat is classified as a “Very High Opportunity brand” which indicates it has a clear pathway for growth through at least 2022 and likely beyond. Hall said:

“Our data shows that Beyond Meat makes up 63% share-of-voice in plant-based meat conversations over the past two years and, despite that large volume, is growing at an astounding 95% year-on-year in online dialogue.”

Beyond Meat grew sales by 32% in the second quarter which was better than the industry average, Hall said. Just as impressive is the fact that Beyond Meat was able to grow off a larger base compared to its peers.

However, one competitor is posing tough competition for the company. Rival Impossible Burger is likely growing at a similar if not higher rate compared to Beyond Meat, he said.

Innovation and new products

Beyond Meat launched in early July plant-based chicken tenders in the US market. This was a wise move on the part of Beyond Meat’s management team as it is focusing on a popular category.

Beyond Chicken Tenders were very well received by the customers. Comparing tenders with nuggets, Hall said that nuggets rank just behind fish as the most popular plant-based category. Tenders benefit from “family friendliness, nostalgia, and convenience.”

Beyond Meat’s long-term growth profile

On the earnings calls, Beyond Meat CEO said it is “easy to market” plant-based foods. Hall said he agrees that Beyond Meat will have no problems marketing its products, but its brand recognition and first-mover advantage won’t last forever.

The plant-based food category is “cool now” but consumers will always move on to the next cool idea once it is unveiled. In addition, all brands will eventually struggle in how they differentiate from each other. Last, many plant-based products are in fact loaded with sodium. Hall said:

It will be very interesting to see the shift in conversations as consumers begin to look closer at plant-based meat labels and scrutinize the so-called “healthier meat alternatives.”