Beyond Meat, the alternative-meat pioneer has been rocked this morning after its products were pulled from all Tim Hortons locations.
Jan. 29, 2020
Shares of Beyond Meat (NASDAQ: BYND) were up nearly 2% at market open this morning, despite Tim Horton’s announcement that it would stop selling its meat-free products at locations in two Canadian provinces.
The popular Canadian coffee chain initially started selling Beyond Meat products last June across 4,000 of its domestic locations as part of an initial trial. This was then scaled back to locations in just two provinces — Ontario and British Columbia — in September 2019.
Why has Tim Hortons cut Beyond Meat?
In an emailed statement this morning, Tim Hortons said:
“We introduced Beyond Meat as a limited time offer. We are always listening to our guests and testing new products that align to our core menu offerings. We may offer Beyond Meat again in the future.”
For its own part, a Beyond Meat spokesperson confirmed to Bloomberg that the agreement with Tim Hortons had been a limited time offer but that the companies may work again in the future.
What does this mean for Beyond Meat?
Though Beyond Meat’s presence on the Tim Hortons menu was only ever on a trial basis, the news that this has ended without a wider roll-out has been a knock for the company. Since going public back in May of last year, Beyond Meat stock has rocketed close to five times its IPO price of $25 per share, bolstered by numerous high-profile deals with the likes of McDonald’s (NYSE: MCD), Dunkin Donuts (NASDAQ: DNKN), Denny’s (NASDAQ: DENN), Del Taco (NASDAQ: TACO), and Subway.
Despite these deals, investors are now nervously eyeing a company that is sitting at a spicy 32-times price-to-sales — signaling that Beyond Meat is extremely overvalued by most standard metrics. However, the bull case is that Beyond Meat is at the forefront of an emerging megatrend of widespread vegetarianism and veganism — an argument that’s a little more hard to measure.
The ending of its partnership with Tim Hortons may rock Beyond Meat in the short-term, but it certainly won’t be a nail in the coffin. However, if other big distributors like McDonald’s start to jump ship in a similar fashion, we’ll likely see a big haircut for Beyond stock.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in Beyond Meat. Read our full disclosure policy here.