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Beyond Meat CEO on Earnings, Competition & Costs · Bloomberg Intelligence

• 0:02
  Speaker 1: Welcome to the Bloomberg Penil podcast. I'm Paul Swinge you.
• 0:05
  Speaker 1: Along with my co host Lisa Brahmas. Each day we
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  Speaker 1: bring you the most noteworthy and useful interviews for you
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  Speaker 1: and your money. Whether at the grocery store or the
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  Speaker 1: trading floor. Find a Bloomberg penl podcast on Apple podcast
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  Speaker 1: or wherever you listen to podcasts, as well as that
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  Speaker 1: Bloomberg dot com. So Beyond Meat raised its forecasts, it
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  Speaker 1: beat estimates when it released its numbers, and today the
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  Speaker 1: lock up expired after the I p O and it
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  Speaker 1: lost more than a fifth of its value. Here with
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  Speaker 1: us to explain what happened Ethan Brown, President, chief executive
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  Speaker 1: officer and founder of Beyond Meat. Who I'm sure it's
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  Speaker 1: so excited to see that you put out all the
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  Speaker 1: numbers that he thought would blow everyone out of the water,
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  Speaker 1: only to see this. Well, thanks for having me. I appreciate.
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  Speaker 1: It's great to be here. It's been an interesting ride
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  Speaker 1: for sure, you know, and we look at this short
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  Speaker 1: term violatility is more of a technical issue and and
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  Speaker 1: just look at the results. Were able to produce this
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  Speaker 1: quarter ninety two million revenue, the six cents per share
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  Speaker 1: in terms of income and the uh ebad uh, all
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  Speaker 1: the things that you would want out of a company
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  Speaker 1: that's growing at our pace. The partnerships with you know,
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  Speaker 1: McDonald's and UH Subway and Duncan and KFC. Um. You
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  Speaker 1: know that happened in a single quarter. That's pretty hard
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  Speaker 1: to match. So we feel really good about where we
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  Speaker 1: are as a company. I think you just feel pretty
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  Speaker 1: good about the stock I pod back in May five.
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  Speaker 1: Bucks did a follow on offering in July one six,
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  Speaker 1: so not too bad. Stock training here at eight five.
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  Speaker 1: So ethan to talk to us about the marketplace. It
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  Speaker 1: is new to me. I am a meat eater. I
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  Speaker 1: don't know about this whole thing too much. Give us
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  Speaker 1: a sense of the market you're playing in globally and
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  Speaker 1: kind of where you fit in great yea, So we
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  Speaker 1: we are absolutely focused on you as a consumer. Actually
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  Speaker 1: so um, if you look at crow Grow, the nation's
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  Speaker 1: largest grocer. Um, the people that are putting the Beyond
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  Speaker 1: Burger in their card are also putting animal protein of
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  Speaker 1: some form in their card as well. So we are
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  Speaker 1: going after what many people term the flexitarian, someone who's
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  Speaker 1: making some changes when they're diet right. Um. And so
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  Speaker 1: it's at one point four trillion dollar industry. If you
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  Speaker 1: look at the global meat industry and we're focused on beef, pork,
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  Speaker 1: and poultry and providing consumers with all the experiences they
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  Speaker 1: love in terms of consuming each of those products, but
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  Speaker 1: doing in a way that's may be better for their
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  Speaker 1: bodies and better for the earth. Is it actually healthier?
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  Speaker 1: There's been some reflicted reports about that. Yeah, there's been
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  Speaker 1: a lot of UM media coverage around that subject, and
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  Speaker 1: it's really appreciate you asking the question because the products
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  Speaker 1: are absolutely healthier, and that's one of the main drivers
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  Speaker 1: behind our business. We have well over seventy scientists and
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  Speaker 1: engineers now that are working on making these products directly
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  Speaker 1: from plants and UH about come out of biomedical and
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  Speaker 1: they have transitioned into our field because they feel this
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  Speaker 1: is a way to be engaged in preventative medicine versus
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  Speaker 1: treating disease after it occurs. And so take the Duncan
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  Speaker 1: product for example, that we're rolling out nationwide here in
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  Speaker 1: less than a week UM and you look at uh
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  Speaker 1: the saturated fat levels, you look at a total fat level,
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  Speaker 1: so total fat we're about fifty percent less than the
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  Speaker 1: leading pork sausage patty. UH saturated fat were less, sodium
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  Speaker 1: were thirty seven percent less, But yet we're offering more
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  Speaker 1: protein and more iron. It's hard to argue that's not healthier.
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  Speaker 1: And then you take a step back and you look
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  Speaker 1: at what's in animal protein that is causing the medical
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  Speaker 1: community UH and academic community to begin to look at
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  Speaker 1: the high levels that we're consuming. And it's not just
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  Speaker 1: UH saturated fat or cholesterol or or or or or
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  Speaker 1: sodium UH. It's things like UH insolent like growth factor
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  Speaker 1: and T M A O and HE iron and other
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  Speaker 1: things that come with protein that's being delivered from animals.
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  Speaker 1: Our entire thesis is the animal is taking vegetation, they're
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  Speaker 1: consuming it, they're consuming water, and they're using their biology
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  Speaker 1: to create muscle, which we then harvest is meat. What
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  Speaker 1: we're saying is that you can take the core inputs
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  Speaker 1: of meat, which are five it's basically amino acids, lipids,
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  Speaker 1: trace minerals, trace vitamins, and water. You can take all
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  Speaker 1: those directly from plants and non animal sources, and you
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  Speaker 1: can use heating, cooling, and pressure to essentially assemble those
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  Speaker 1: in the architecture of meat. So we have the composition
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  Speaker 1: of meat. We're keeping all the good stuff and trying
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  Speaker 1: to leave out the bad stuff. All right, So let's
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  Speaker 1: talk about the big concern for certain analysts and for
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  Speaker 1: certain people in the marketplace as it relates to the
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  Speaker 1: fundamentals of your business, and that is competition. You guys
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  Speaker 1: are in there, you have a great brand in the marketplace,
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  Speaker 1: you're arguably kind of first to market kind of thing.
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  Speaker 1: But what's to stop any other big, these big food
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  Speaker 1: conglomerates that come in and just snatch that market away?
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  Speaker 1: So how do you guys think about that? Yeah, so
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  Speaker 1: I think about that a lot. Um. It's a question
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  Speaker 1: that fascinates me independent of our business, which is, how
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  Speaker 1: do these disruptive businesses come into an established landscape right
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  Speaker 1: before the eyes of incumbents and capture the market. And
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  Speaker 1: there's history, as I mentioned on the call, replete with
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  Speaker 1: examples of companies that have done that. And two of
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  Speaker 1: my favorites would be you know, Tesla and and and
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  Speaker 1: Amazon um And I actually on the road show always
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  Speaker 1: asked that question all the time, about what about all
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  Speaker 1: the compan business coming? And I would have turned that
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  Speaker 1: question with a question myself that I'd ask them to
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  Speaker 1: explain to me why Ford and General Motors and others
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  Speaker 1: allowed Tesla to do what they did right, And that's
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  Speaker 1: happening here with us. If you look at the focus
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  Speaker 1: we have, we have a singular focus on one thing,
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  Speaker 1: which is to build meat directly from plants. We are
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  Speaker 1: not wedded to any incumbent UH supply chain. We have
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  Speaker 1: no sunk assets tied to a different industry. We have
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  Speaker 1: no debates in our company about should we fund um
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  Speaker 1: you know, baby food versus versus plant based meat. So
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  Speaker 1: we have a biopic, almost manic focus on innovation. The
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  Speaker 1: only people that care the most, the people that care
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  Speaker 1: the most about displacing our products on the shelf or
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  Speaker 1: within my company and includes myself. We are always going
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  Speaker 1: to produce a better product next year than we did
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  Speaker 1: this year, and that's a goal for us. So if
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  Speaker 1: you're chasing us, you're gonna be chasing a ghost. I
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  Speaker 1: don't view the intention and the efforts of large incomments
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  Speaker 1: to come in and take our market and to take
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  Speaker 1: our leadership position as evidence they will do so. I
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  Speaker 1: think it's a lot harder than people think. Just about
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  Speaker 1: a minute left and wonder, given effact UH, the we've
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  Speaker 1: seen a lot of volatility, and the shares despite any
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  Speaker 1: real numbers. Do you regret going public? No, not at all.
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  Speaker 1: It's it's look, I am in the business of growing
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  Speaker 1: a global protein company. You know, I want to be
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  Speaker 1: a forty billion dollar company. Uh. At the end of
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  Speaker 1: the day, that's serving protein at the center of the
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  Speaker 1: plate for consumers all over the world. Um, going public
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  Speaker 1: was a necessary step in that, in that transition to
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  Speaker 1: a much larger company that has an impact on the world.
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  Speaker 1: Ethan Brown, thanks so much for joining us. Ethan as
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  Speaker 1: he founder and CEO of Beyond Meat Company reported better
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  Speaker 1: than expected results last night, raised guidance. The lock up
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  Speaker 1: did expire today, so I'm sure we've got to see
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  Speaker 1: about twenty million shares trading, so I'm sure some of
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  Speaker 1: those shares a quantit to the market. Yeah. And uh,
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  Speaker 1: he's vegan, So that's the bar that you are going
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  Speaker 1: to be held too. So when we talk tomorrow, you're
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  Speaker 1: gonna come in saying you've abandoned all me you've got,
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  Speaker 1: You've gone completely vegan. It'll be a new Paul Sweeney'll
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  Speaker 1: go to Lugers tonight for one last day and then
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  Speaker 1: we really appreciate Ethan bron Thanks for joining me. Come back,
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  Speaker 1: we'll talk Maryland basketball. Uh. You never should have left
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  Speaker 1: the A c C. Thanks for listening to the Bloomberg
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