How To Invest In Artificial Meat

Cultured meat is a growing industry expected to reach nearly $300 million by 2027. Although artificial meat was once seen as indigestible, the industry innovated by leaps and bounds in the 2010s. Companies like Impossible Foods brought plant-based meats to the masses, and now they’re found in restaurants and grocery stores worldwide.

Finding it to taste is easy, but do you know how to invest in artificial meat?

Impossible Foods isn’t public yet as of this writing. It’s a privately held company that raised $200 million from angel investors in August 2020. In total, it raised about $1.5 billion since 2011 from investors like Reddit co-founder Alexis Ohanian, Jay-Z, and Katy Perry.

Developing burgers that taste and cook like real meat was the first step. Sausage came next. Chicken, ribs, steak, and seafood are all in development. The industry got an even bigger boost when COVID-19 sent beef prices skyrocketing.

Time to take a bite out of three artificial meat companies to determine if these plant-based alternatives can grow your portfolio or if they’ll leave you hungry for profits.

Beyond Meat Landed Whole Foods Deal & Soared

Beyond Meat Inc (NASDAQ:BYND) was founded in 2009 and launched its first product, chicken-free strips, in 2012. By 2013, it was in Whole Foods and gained venture capital from Bill Gates, the Humane Society, and Tyson Foods.

Plant-based meat is created through a combination of ingredients and processing. Despite its first product being described by critics as “tolerable, at best,” the company developed a plant-based beef burger that gained steam.

The company found it’s easier to replicate the texture of ground beef and sausage. But steak, chicken, and seafood have different textures that aren’t as easily done with plants.

It continued expanding its product line through the late 2010s, and it started being picked up in restaurants like Tim Hortons, A&W, Dunkin Donuts (DNKN). You can now find Beyond Meat in a variety of stores and restaurants, from fast food to fine dining.

Although Beyond Meat gained 2 percent in sales in spite of restaurant closures, it was more muted than the 40 percent expected. This was due to restaurants struggling to maintain customer bases while people chose to stay at home and socially distance.

BYND share price struggled during the 2020 holiday season, as investors cooled on its slower-than-expected growth.

Still, it partnered with McDonald’s Corp (NYSE:MCD) in November to develop the McPlant meatless patty and chicken options. It’s also developing a minced pork in China that would grow its branding in a country with nearly 1.4 billion people. China and India are key markets for the business.

Beyond Meat also sells direct-to-consumers through its own e-commerce site. This gives it a healthy revenue stream that could continue expanding the company’s sales and provide chunky returns to investors with an empty stomach.

Tyson Foods Acquisition Of Future Meat Bodes Well

Tyson Foods, Inc. (NYSE:TSN) is one of the largest meat producers in the world, and it’s not taking the artificial meat trend lying down. The company led a $2.2 million investment round in Future Meat Technologies in 2018.

Future Meat skips animals and creates cost-efficient, non-GMO meat directly from animal cells. It’s viewed as a more humane way of producing meat, since live animals don’t need to be raised and harvested.

By essentially 3D printing fat and meat cells, Future Meat Technologies pushed to reduce costs from $10,000 per kilogram to an estimated $10 per kilogram by 2021. This could be a key ingredient in making the world’s meat supply chain greener and more sustainable.

Tyson spends heavily on technology, and even its traditional meat processing facilities feature state-of-the-art automation. It spent over $215 million in the back half of the 2010s on automation and robotics to optimize the entire meat supply chain.

Its supply chain was disrupted by the coronavirus pandemic, costing the company dearly as production shut down. Several plants were shut down, and the Centers for Disease Control shined a spotlight on the industry and its workers.

Profits dropped by 15 percent in the second quarter of 2020, and the company’s market capitalization is a far cry from former high price levels.  Still, the company worked tirelessly to keep its employees safe while producing the necessary meat for our winter holiday feasts.

It wasn’t until Thanksgiving and Christmas 2020 that the company reached close to former levels of profitability. Because it pays a 2.78 percent dividend yield, both income and value investors will be eyeing Tyson Foods to see if it takes flight in the 2020s or remains grounded.

How To Buy Impossible Foods Stock

Restaurant Brands International Inc (NYSE:QSR) is the closest you’ll get to investing in Impossible Foods.

The company’s Impossible Burger 2 launch at CES 2019 sparked a renaissance for the artificial meat business. It then launched in regional chains Umami Burger and White Castle before debuting at Burger King as the Impossible Whopper.

In fact, RBI’s branded restaurants split the difference and serves Impossible meat at Burger King while Tim Horton’s serves Beyond meat. The only company under RBI that doesn’t yet serve plant-based meat is Popeyes Louisiana Chicken, although several customers started petitions to change that.

Burger King leadership announced the Impossible Whopper drove its sales up between 0.6 percent and 8 percent across its stores in 2019. By 2020, the price was reduced to keep the plant-based burger competitive and maintain stalling sales.

Although it did get hit by initial municipal shutdown orders, RBI stock nearly recovered by year end to trade at pre-shutdown price levels again.

This could be the safest bet in artificial meat, as it encompasses both traditional and artificial meat. Between these three fast-food restaurants, they serve a variety of cuisines that could outlast any dietary fads.

As the world moves closer to 2030, each of these companies has investor attention. It remains to be seen if those bulls have eyes bigger than their stomachs though.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.