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Economic and Ecological Factors Influencing Beyond Meat’s Strategy
Conduct a PESTEL analysis on Beyond Meat by identifying as many external issues as you can that have an impact on Beyond Meat's strategy. Identify which ones are opportunities and which ones are threats.
NOTE: For this assignment, ONLY analyze Economic and Ecological factors for Beyond Meat. (Does not have to be a whole PESTEL analysis)
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Answer
Economic and Ecological Factors Influencing Beyond Meat’s Strategy
The current short essay aims to perform a PESTEL analysis on Beyond Meat with particular emphasis on the economic and ecological factors that shape/influence the company’s strategy. The identified factors are then classified as either opportunities or threats Meat’s decision to go public (become a publicly-traded company) was influenced by the United States’ stronger economy. In other words, the company’s management was certain that investors in the U.S. had disposable income to invest in shares offered by the company, no matter their prices. For instance, trading on Nasdaq under the ticker symbol “BYND”, the company sold 9.63 million shares priced at an average of $24 each, which surpassed the planned 8.75 million shares at a price range of $19 to $21 each. This strategic decision to go public generated more than $241 million (Watson, 2019) and saw Beyond Meat’s market value increase to approximately $1.5 billion (Linnane, 2019), thanks to the U.S.’s stronger economy that supported the purchase and exchange of the company’s shares.
Beyond Meat’s strategy is also inspired and supported by a large alternative meat (plant-based meat) market in the U.S., which is expected to increase to $40.5 billion through the 2020s and represent more than 15% of the total market size of the country’s meat industry. Evidently, this prospective industry growth is a unique opportunity for the company to focus more on offering the plant-based meat category.
Ecological Factors
The key idea behind Beyond Meat’s strategy is to replace animals (livestock) as the sole source of meat and allow people to experience a taste of meat and get its benefits without necessarily relying on animals. This business idea is prompted by the environmental/ecological concerns associated with rearing livestock on large scale for meat production as well as by animal welfare. By bypassing the animal in offering meat lovers meat, the negative environmental impacts of large-scale animal agriculture, such as contributions to drought and climate change, are greatly reduced. As Ethan Brown, Beyond Meat’s founder and CEO notes, for instance, if people fully embrace plant-based meat, the GHG emission, water consumption, land use, and energy consumption will reduce by 90%, 99%, 93%, and 46%, respectively. This presents the company with an attractive growth opportunity amidst the growing pressures for environmental conservation and sustainability.
Conclusions and Recommendations
The alternative meat market has a positive outlook in the U.S. and elsewhere. Notably, the plant-based market accounts for close to 15% of the $270 billion and 1.4 trillion meat market in the U.S. and worldwide, respectively. Additionally, Beyond Meat’s business idea and strategy are built around addressing environmental concerns associated with livestock agriculture such as drinking water pollution, climate crisis, and land overuse as well as animal welfare (regarding meat consumption). Combined with the attractive market prospects of the alternative meat market, this increased focus on meeting environmental sustainability objectives and animal welfare needs mean that Beyond Meat is better positioned to meet its growth and economic objectives.
References
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Linnane, C. (2019, May 28). Beyond meat goes public with a bang: 5 things to know about the plant-based meat maker. MarketWatch. Retrieved February 19, 2021, from https://www.marketwatch.com/story/beyond-meat-is-going-public-5-things- to- know-about-the-plant-based-meat-maker-2018-11-23 Watson, E. (2019, May 2). Beyond meat IPO ‘extremely rare exit strategy in the highly centralized food industry,’ says GFI. foodnavigator-usa.com. |