Beyond Meat maintains plans to open a production facility in Asia, despite coronavirus outbreak
- "Right now is a moment in time for us. It's an opportunity for hyper growth, so I'm looking very seriously to Asia," Beyond Meat CEO Ethan Brown told CNBC as the company continues plans to open up a production facility in the region.
- "I made a commitment that we're going to be producing in Asia by the end of this year. We'll do that regardless of, I think, of this health epidemic occurring right now," he said in a "Mad Money" interview.
- "We have to be active in China, regardless of what's going on" with the coronavirus epidemic, he said.
Beyond Meat head Ethan Brown on Monday reaffirmed the company's mission to expand its manufacturing capabilities to Asia, despite potential headwinds associated with the novel coronavirus outbreak that has disturbed global commerce.
"Right now is a moment in time for us. It's an opportunity for hyper growth, so I'm looking very seriously to Asia," the chief executive and president said in a sit-down interview with CNBC's Jim Cramer on "Mad Money." "I made a commitment that we're going to be producing in Asia by the end of this year. We'll do that regardless of, I think, of this health epidemic occurring right now."
Beyond Meat wants to open production facilities in Asia in 2020 in an effort to penetrate the market in China, which has the world's second-largest economy. The company already sells its faux-meat products in Taiwan, Singapore and Hong Kong.
What Beyond Meat sees in China is an opportunity to take advantage of a market that has opened up, given that the African swine fever has depleted the country's pork supply, which more than doubled pork prices near the end of 2019.
China represents a golden opportunity to sell plant-based pork products for Beyond Meat.
"I came out of the fuel-cell industry. If there had been a disruption to the internal combustion engine manufacturing infrastructure where 25% disappeared overnight, we'd be going bananas trying to leapfrog and put hydrogen or electric drive technology in its place," Brown said. "That's our opportunity right now. We have to be active in China, regardless of what's going on" with the novel virus epidemic.
Outside of the Asian region, Beyond Meat expects to have a new European production facility in partnership with Zandbergen World's Finest Meat up and running by the end of March, Brown added. The Netherlands plant will be the company's first outside of the U.S.
Brown, who founded the plant-based meat producer, which markets the Beyond Burger and Beyond Sausage, a little over a decade ago, compared the company's growth to that of Amazon's in the early days. Beyond Meat is sacrificing near-term profits to reinvest in growth, he explained.
"I am very similar to what Amazon did in terms of reinvesting and continuing to grow," he said.
In its fourth-quarter earnings report Thursday, Beyond Meat beat sales estimates — $98.5 million versus $81.2 million — but missed earnings estimates. The company reported losses of 1 cent per share when analysts were seeking a profit of 1 cent per share, according to FactSet.
Revenue at the meat substitutes company more than tripled in the three-month period from the year prior, though the stock sold off on the quarterly results. The decline coincided with the coronavirus-induced market sell-off. The stock plummeted another 15% on Friday.
"This is a time of hyper growth. I've ruled out nothing. We're looking at potentially acquisitions in the supply chain or adjacencies," Brown said. "We are doing everything we can right now to grab as much market share as we possibly can. That's the right focus for our business."
Beyond Meat shares surged more than 7% to $96.10 in Monday's session. The stock is nearly 139 points off its all-time closing high in July.
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