Beyond Meat Strikes A Deal With Supermarket Chain Owned By Alibaba
Beyond Meat (BYND Stock Report) is soaring on Wednesday after the announcement of a new partnership with a Chinese retail market, Freshippo. The plant-based meat maker is betting that the coronavirus pandemic will make it easier to convert the country’s consumers. The plant-based meat is starting to hit the shelves of the supermarket owned by Alibaba (BABA Stock Report). For investors who are not familiar with Beyond Meat, the company first entered the country in April by supplying Starbucks’ (SBUX Stock Report) plant-based menu. Shortly after that, it had also done deals with KFC, Taco Bell, and Pizza Hut- all under the Yum China (YUMC Stock Report) empire.
It makes perfect sense for Beyond Meat to expand further in China. After all, China is the world’s biggest market for meat. The world’s most populous nation has seen a growing demand for plant-based protein. For this reason, it is the perfect opportunity for the company to expand their presence there. This is considering the fact that there’s major disruption in the meat supply coupling with a “potential pandemic” found in pigs.
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Huge Interests In Plant-Based Protein In China An Opportunity For BYND Stock
Even before the pandemic, plant-based protein was already a growing thing in China. The consultancy Euromonitor predicted China’s ‘free from meat’ market is expected to be worth $12 billion by 2023. Now, there’s a rising concern from Chinese consumers over links between meat and viral diseases. As such, the demand for meatless products like Beyond Meat is becoming more important than ever. Jim Cramer also believes the latest news of expansion into the Chinese market makes Beyond Meat stocks a buy. Although it is still a tiny business compared to Asia’s giant meat supply chain, we are starting to see a shift in meat consumption especially during this pandemic.
Alibaba, for its part, wants to cash in on the growing phenomenon. “We have seen a growing interest in plant-based meat among our shoppers and look forward to offering more Beyond Meat products in the future,” Jiayu Zhao, senior director and head of merchandising at Freshippo, the Alibaba unit that oversees new retail initiatives, said in a statement.
Beyond Meat Stock: To Buy Or Sell?
The market for plant-based protein appears to be growing, with or without Covid-19. The outbreak, thus far, has been helping to drive growth. But there’s also a fair share of bears for BYND stock. This came after McDonald’s Canada pulled Beyond Meat P.L.T. burger from the menus after the test phase. The news put some pressure on BYND stock.
Despite that, the company still has diverse revenue streams that could continue to grow at a healthy pace. Beyond Meat is also building its first European co-manufacturing facility with partner Zandbergen in the Netherlands, signalling a commitment to expand in that region. Up until today, we still do not know how the consumer acceptance is like in China and Europe. With time however, there is a possibility that we could witness the increasing popularity of meal alternatives.
One thing’s for sure, China doesn’t have enough meat supply to meet its demand. The reliance on meat import globally is not sustainable and a risky thing to do, and China knows that. Thus, plant-based meat could be the answer to the short supply of meat. The question here is, how much market share can Beyond Meat capture in the increasingly competitive space? The latest partnership with Alibaba is definitely huge for BYND stock investors, providing a direct avenue for Beyond Meat to prosper. With all that being said, would you include BYND stock to your existing portfolio?