Meat No Longer Requires Animal Slaughter – Valuing an Alternative Protein Player

Abstract

Conventional animal protein production faces numerous challenges nowadays. Meanwhile, alternative proteins have been improved significantly over the last years and plant-based proteins are about to reach cost parity. Against this backdrop, foreseeing a rosy future for alternative protein producers and expecting high returns from investing early may seem plausible. Yet there is still considerable uncertainty if and how fast the industry will take off and how profitable the business may become. Valuing Beyond Meat, one of the industry’s leading companies, under multiple scenarios (ranging from pessimistic to very optimistic) can thus shed light not only on whether its valuation but arguably also whether valuations in alternative proteins more broadly are currently overhyped, reasonable, or even offer room for further upside potential. It turns out that the firm’s current share price is a sensible average of Beyond’s potential value in the different scenarios.