Job opportunity

A new place I’m at:

Beyond Meat had the IPO of the year, rising to 800% of the flotation price at one point. So, it’s a great investment, right? The answer being well, no, possibly not. The price has fallen back substantially since then on the grounds that it’s always the pioneers that end up with the arrows in their backs.

There are a number of different ways to explain this idea, they’ve no moat perhaps, they’re too small possibly, even they’re obviously going to come to grief catering to vegans. It’s a combination of those first two reasons that tell us the future, not the third. In fact, the more they prove that catering to vegans works very well as a business strategy the less well they’re going to do.

This is not to say that Beyond Meat is going to go bust, although of course that can happen to any company. It’s not even to say that they’re not going to continue to grow and do so nicely. Rather, it’s to insist that prices and margins in this business sector are going to fall and fall badly and that’s going to spell the end of any – and the current – sky high valuation of the company’s potential future revenues.

They’re looking for other writers. They do pay, although not hugely. So, anyone who wants to write financial market type stuff – although they’re looking for evergreen content, not a pitch on an immediate trade – get in touch and I’ll pass you along.

23 thoughts on “Job opportunity”

  1. A business based on its competition being very good.

    “Meat is so good, we are going to make fake meat.”

    Keep comparing yourself to meat, and people will buy meat.

  2. Their customers are, figuratively, fruit cakes. What happens if there is a Great Enlightenment and God tells ’em to eat bacon?

  3. Veganism is a very very niche market. So for anyone who wants to go there, there is zero competition and great pricing power. Short term banditry perhaps. Only if Veganism gets anywhere beyond 0.1% of the population, will competition arise

  4. Veganism is a very very niche market. So for anyone who wants to go there, there is zero competition and great pricing power. Short term banditry perhaps. Only if Veganism gets anywhere beyond 0.1% of the population, will competition arise. Grow plants and fungi and sell them for the price of meat

  5. My wife likes to experiment with foods, so we’ve had the Impossible Burger a couple of times and some fake sausage from Beyond Meat. I really didn’t like the sausage. I’m not really a burger fan at the best of times – if I have four a year I’d be surprised -but the Impossible Burger is close to, but not quite, a real hamburger. If it was in spaghetti sauce it would probably fool me.

    But I miss the point of this stuff. While a confirmed carnivore, I do enjoy a salad; I eat my veggies; and I have no objection to a portobello mushroom sandwich. I certainly eat less red meat than I was raised with – growing up in the country we had a freezer full of beef, lamb, chicken, caught fish and deer. I’d suggest that if someone doesn’t want to eat meat they just give it up and go vegetarian. Trying to eat the fake stuff is likely to prove unsatisfying.

  6. Also, Tesla. What’s their edge? Do they have any notable patents on electric cars? Nope. And people trust names like Nissan, Audi and BMW. If electric demand takes off, people will buy those. The big “moat” in cars is trust. It’s a huge expense buying a car, plus your life can depend on the car, so most people are very conservative about manufacturers. Even after Toyota were making better cars than Ford, it took them a couple of decades to pass them in sales.

    (I also think plug-in hybrids giving people 20-30 miles of range are the practical electric solution)

  7. Beyond Meat, like Quorn, are not targeting the vegans/vegetarians. They’re got them already. The growth is with meat eaters, and that is why they are making it as palatable as possible for the carnivores. Look at Quorn’s advertising in recent years. It’s all about eating less meat, for health and environmental reasons, and nothing to do with saving the fluffy animals. And it’s working. Sales growth has been very impressive and it’s not slowing down. The main reason market value will fall is because so many others are diving in to the booming market.

  8. Good point, Gus. But being shamed into eating fake meat can only last so long.

    And it’s a strong argument that there is a matriarchy, not patriarchy. Men aren’t swayed by this rot.

  9. “for health and environmental reasons”

    you really mean this year’s fashions, don’t you? But you are not gong to impress Greta Thunberg like that

  10. I was going to mention Quorn too. For a long time they were the Hoover or Google of fake meats – often used to refer to fake meat in general. As long as you’re careful to protect your trademark, there can be a lot of surplus value in simply being the biggest name in your market; even if your product is barely distinguishable from the competitors’.

  11. @Gus January 25, 2020 at 4:40 pm

    Spot on. All the supermarkets (Aldi to Tesco) now have a large range of own brand vegan products & ready meals at ~same price as meat. imo excess profit market already finished and if/when vegan fad ends, they’ll be rapidly discontinued

    Tesco Beef Lasagne 450G £ 2.50
    Tesco Italian Kitchen Vegetable Lasagne 450G £ 2.50
    Tesco Vaue Hearty Food Co. Lasagne 400G £ 0.75

    Booker/Premier, Gingsters, Greggs etc too

  12. The argument against veganism has to be vegans are a pallid sickly miserable bunch of cnuts. The first thing vegans insist on telling you is they’re vegan. Then they go on to list their ailments & what alternative potions & therapies they’re treating themselves with. Companies like this are instrumental in them not doing the decent thing & starving themselves to death.

    But Tim’s lines below the quote are what I’ve been trying to get through to someone half the day. Your competitors aren’t always your competitors. Sometimes it makes sense to help each other.
    Yep, the more people write decent stuff for whatever site he’s found, the more people will go there to read it. And the more words he’ll be able to flog to them. So he points them in that direction.

  13. BiS; true, so it’s a tad unfortunate that looking up the parent company and then checking out the About Us page gives;

    “DH is an artist. He paints the picture of Finhaven on his canvas of business.”

    For the CEO.

  14. Talking of evergreen pieces; an overview of the history of the TSX and Canadian markets might not go over that well. Peculiar that a crypto-ledgerery, chainy-blockey thing has managed to raise just over 6million USD in two years.

  15. @ Diogenes, Mr Duckface
    I think you’ve rather missed the point. In a sense what Tim’s trying to do & what I’m involved in are very similar. There’s an almost unlimited supply of people want to do what he does. There’s a tendency to see any earnings opportunity that goes to one of your competitors as being an earnings opportunity you didn’t get. So you protect your potential opportunities from all competitors. It’s not an optimum strategy because the number of your competitors is so large, your chances of winning are low. It’s better to work with some of your competitors to enhance your joint attractiveness in the market. You’re still competing but your competing in a smaller, richer pool. Between you, you share more potential opportunities than proportionally you would do on your own. The opposition isn’t going to go away so exploit it, where you can.
    It’s very simple & very obvious but remarkably few people seem to be able to get their heads around it.

  16. @BoM4
    I also think plug-in hybrids giving people 20-30 miles of range are the practical electric solution

    Works for me 🙂 ~90% of my trips are on electric, but only ~50% of mileage. I know quite few local Tesla and Leaf owners who are very happy with them, but without exception they have another car as well, and if one had to go it would be the Tesla/Leaf.

  17. “Then they go on to list their ailments & what alternative potions & therapies they’re treating themselves with.”

    “And you can be just like me!”

  18. Bis, I think that is what I was attempting to convey, in an overly oblique way. Cooperation can help to widen the market and opportunities

  19. Bis, I think that is what I was attempting to convey, in an overly oblique way. Cooperation can help to widen the market and opportunities

  20. @bis

    +1

    NHS, while extolling all the health virtue signalling benefits, tell vegans they must – if don’t want to die – see GP regularly for blood tests and prescribed supplements eg B12 injections from nurse

    Easier, cheaper option – tell them to eat a 99p BK/McD beef burger once a week as “Medicine” not “Food”

  21. Pingback: That didn't last long then | Tim Worstall

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