WEBVTT - Beyond Meat CEO on Earnings, Competition & Costs

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<v Speaker 1>Welcome to the Bloomberg Penil podcast. I'm Paul Swinge you.

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<v Speaker 1>Along with my co host Lisa Brahmas. Each day we

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<v Speaker 1>bring you the most noteworthy and useful interviews for you

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<v Speaker 1>and your money. Whether at the grocery store or the

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<v Speaker 1>trading floor. Find a Bloomberg penl podcast on Apple podcast

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<v Speaker 1>or wherever you listen to podcasts, as well as that

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<v Speaker 1>Bloomberg dot com. So Beyond Meat raised its forecasts, it

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<v Speaker 1>beat estimates when it released its numbers, and today the

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<v Speaker 1>lock up expired after the I p O and it

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<v Speaker 1>lost more than a fifth of its value. Here with

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<v Speaker 1>us to explain what happened Ethan Brown, President, chief executive

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<v Speaker 1>officer and founder of Beyond Meat. Who I'm sure it's

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<v Speaker 1>so excited to see that you put out all the

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<v Speaker 1>numbers that he thought would blow everyone out of the water,

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<v Speaker 1>only to see this. Well, thanks for having me. I appreciate.

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<v Speaker 1>It's great to be here. It's been an interesting ride

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<v Speaker 1>for sure, you know, and we look at this short

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<v Speaker 1>term violatility is more of a technical issue and and

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<v Speaker 1>just look at the results. Were able to produce this

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<v Speaker 1>quarter ninety two million revenue, the six cents per share

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<v Speaker 1>in terms of income and the uh ebad uh, all

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<v Speaker 1>the things that you would want out of a company

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<v Speaker 1>that's growing at our pace. The partnerships with you know,

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<v Speaker 1>McDonald's and UH Subway and Duncan and KFC. Um. You

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<v Speaker 1>know that happened in a single quarter. That's pretty hard

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<v Speaker 1>to match. So we feel really good about where we

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<v Speaker 1>are as a company. I think you just feel pretty

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<v Speaker 1>good about the stock I pod back in May five.

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<v Speaker 1>Bucks did a follow on offering in July one six,

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<v Speaker 1>so not too bad. Stock training here at eight five.

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<v Speaker 1>So ethan to talk to us about the marketplace. It

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<v Speaker 1>is new to me. I am a meat eater. I

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<v Speaker 1>don't know about this whole thing too much. Give us

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<v Speaker 1>a sense of the market you're playing in globally and

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<v Speaker 1>kind of where you fit in great yea, So we

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<v Speaker 1>we are absolutely focused on you as a consumer. Actually

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<v Speaker 1>so um, if you look at crow Grow, the nation's

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<v Speaker 1>largest grocer. Um, the people that are putting the Beyond

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<v Speaker 1>Burger in their card are also putting animal protein of

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<v Speaker 1>some form in their card as well. So we are

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<v Speaker 1>going after what many people term the flexitarian, someone who's

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<v Speaker 1>making some changes when they're diet right. Um. And so

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<v Speaker 1>it's at one point four trillion dollar industry. If you

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<v Speaker 1>look at the global meat industry and we're focused on beef, pork,

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<v Speaker 1>and poultry and providing consumers with all the experiences they

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<v Speaker 1>love in terms of consuming each of those products, but

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<v Speaker 1>doing in a way that's may be better for their

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<v Speaker 1>bodies and better for the earth. Is it actually healthier?

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<v Speaker 1>There's been some reflicted reports about that. Yeah, there's been

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<v Speaker 1>a lot of UM media coverage around that subject, and

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<v Speaker 1>it's really appreciate you asking the question because the products

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<v Speaker 1>are absolutely healthier, and that's one of the main drivers

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<v Speaker 1>behind our business. We have well over seventy scientists and

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<v Speaker 1>engineers now that are working on making these products directly

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<v Speaker 1>from plants and UH about come out of biomedical and

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<v Speaker 1>they have transitioned into our field because they feel this

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<v Speaker 1>is a way to be engaged in preventative medicine versus

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<v Speaker 1>treating disease after it occurs. And so take the Duncan

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<v Speaker 1>product for example, that we're rolling out nationwide here in

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<v Speaker 1>less than a week UM and you look at uh

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<v Speaker 1>the saturated fat levels, you look at a total fat level,

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<v Speaker 1>so total fat we're about fifty percent less than the

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<v Speaker 1>leading pork sausage patty. UH saturated fat were less, sodium

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<v Speaker 1>were thirty seven percent less, But yet we're offering more

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<v Speaker 1>protein and more iron. It's hard to argue that's not healthier.

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<v Speaker 1>And then you take a step back and you look

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<v Speaker 1>at what's in animal protein that is causing the medical

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<v Speaker 1>community UH and academic community to begin to look at

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<v Speaker 1>the high levels that we're consuming. And it's not just

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<v Speaker 1>UH saturated fat or cholesterol or or or or or

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<v Speaker 1>sodium UH. It's things like UH insolent like growth factor

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<v Speaker 1>and T M A O and HE iron and other

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<v Speaker 1>things that come with protein that's being delivered from animals.

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<v Speaker 1>Our entire thesis is the animal is taking vegetation, they're

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<v Speaker 1>consuming it, they're consuming water, and they're using their biology

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<v Speaker 1>to create muscle, which we then harvest is meat. What

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<v Speaker 1>we're saying is that you can take the core inputs

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<v Speaker 1>of meat, which are five it's basically amino acids, lipids,

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<v Speaker 1>trace minerals, trace vitamins, and water. You can take all

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<v Speaker 1>those directly from plants and non animal sources, and you

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<v Speaker 1>can use heating, cooling, and pressure to essentially assemble those

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<v Speaker 1>in the architecture of meat. So we have the composition

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<v Speaker 1>of meat. We're keeping all the good stuff and trying

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<v Speaker 1>to leave out the bad stuff. All right, So let's

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<v Speaker 1>talk about the big concern for certain analysts and for

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<v Speaker 1>certain people in the marketplace as it relates to the

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<v Speaker 1>fundamentals of your business, and that is competition. You guys

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<v Speaker 1>are in there, you have a great brand in the marketplace,

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<v Speaker 1>you're arguably kind of first to market kind of thing.

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<v Speaker 1>But what's to stop any other big, these big food

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<v Speaker 1>conglomerates that come in and just snatch that market away?

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<v Speaker 1>So how do you guys think about that? Yeah, so

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<v Speaker 1>I think about that a lot. Um. It's a question

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<v Speaker 1>that fascinates me independent of our business, which is, how

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<v Speaker 1>do these disruptive businesses come into an established landscape right

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<v Speaker 1>before the eyes of incumbents and capture the market. And

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<v Speaker 1>there's history, as I mentioned on the call, replete with

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<v Speaker 1>examples of companies that have done that. And two of

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<v Speaker 1>my favorites would be you know, Tesla and and and

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<v Speaker 1>Amazon um And I actually on the road show always

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<v Speaker 1>asked that question all the time, about what about all

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<v Speaker 1>the compan business coming? And I would have turned that

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<v Speaker 1>question with a question myself that I'd ask them to

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<v Speaker 1>explain to me why Ford and General Motors and others

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<v Speaker 1>allowed Tesla to do what they did right, And that's

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<v Speaker 1>happening here with us. If you look at the focus

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<v Speaker 1>we have, we have a singular focus on one thing,

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<v Speaker 1>which is to build meat directly from plants. We are

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<v Speaker 1>not wedded to any incumbent UH supply chain. We have

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<v Speaker 1>no sunk assets tied to a different industry. We have

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<v Speaker 1>no debates in our company about should we fund um

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<v Speaker 1>you know, baby food versus versus plant based meat. So

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<v Speaker 1>we have a biopic, almost manic focus on innovation. The

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<v Speaker 1>only people that care the most, the people that care

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<v Speaker 1>the most about displacing our products on the shelf or

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<v Speaker 1>within my company and includes myself. We are always going

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<v Speaker 1>to produce a better product next year than we did

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<v Speaker 1>this year, and that's a goal for us. So if

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<v Speaker 1>you're chasing us, you're gonna be chasing a ghost. I

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<v Speaker 1>don't view the intention and the efforts of large incomments

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<v Speaker 1>to come in and take our market and to take

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<v Speaker 1>our leadership position as evidence they will do so. I

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<v Speaker 1>think it's a lot harder than people think. Just about

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<v Speaker 1>a minute left and wonder, given effact UH, the we've

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<v Speaker 1>seen a lot of volatility, and the shares despite any

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<v Speaker 1>real numbers. Do you regret going public? No, not at all.

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<v Speaker 1>It's it's look, I am in the business of growing

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<v Speaker 1>a global protein company. You know, I want to be

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<v Speaker 1>a forty billion dollar company. Uh. At the end of

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<v Speaker 1>the day, that's serving protein at the center of the

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<v Speaker 1>plate for consumers all over the world. Um, going public

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<v Speaker 1>was a necessary step in that, in that transition to

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<v Speaker 1>a much larger company that has an impact on the world.

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<v Speaker 1>Ethan Brown, thanks so much for joining us. Ethan as

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<v Speaker 1>he founder and CEO of Beyond Meat Company reported better

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<v Speaker 1>than expected results last night, raised guidance. The lock up

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<v Speaker 1>did expire today, so I'm sure we've got to see

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<v Speaker 1>about twenty million shares trading, so I'm sure some of

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<v Speaker 1>those shares a quantit to the market. Yeah. And uh,

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<v Speaker 1>he's vegan, So that's the bar that you are going

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<v Speaker 1>to be held too. So when we talk tomorrow, you're

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<v Speaker 1>gonna come in saying you've abandoned all me you've got,

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<v Speaker 1>You've gone completely vegan. It'll be a new Paul Sweeney'll

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<v Speaker 1>go to Lugers tonight for one last day and then

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<v Speaker 1>we really appreciate Ethan bron Thanks for joining me. Come back,

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<v Speaker 1>we'll talk Maryland basketball. Uh. You never should have left

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<v Speaker 1>the A c C. Thanks for listening to the Bloomberg

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<v Speaker 1>P and L podcast. You can subscribe and listen to

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<v Speaker 1>interviews at Apple Podcasts or whatever podcast platform you prefer.

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<v Speaker 1>I'm Paul Sweeney. I'm on Twitter at pt Sweeney. I'm

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<v Speaker 1>Lisa Abram Woyds. I'm on Twitter at Lisa Abram Woyds.

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<v Speaker 1>One before the podcast, you can always catch us worldwide.

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