According to a Morgan Stanley study, we are headed for a market dominated by millennials – more and more, year after year. The next decade, for stock market participants, will be increasingly dominated by this transition.
The data suggests that millennials will inherit over $68 trillion in that time, and much of that will likely find its way into the stock market. That implies an advantage to the ESG theme – Environment, Social, and Governance.
That means electric vehicles, climate change solutions, and alternative meat, which is known to generate 14 times as much food as meat from cattle, pigs, poultry, or other farmed meat sources. It’s the solution to a myriad of health problems as well. More importantly, the shift to meat alternatives appears to be in its early innings, which suggests investors should be paying close attention.
With that in mind, we take a look at a few interesting names in the space that could represent interesting vehicles to capitalize on this transitional growth theme, including Beyond Meat Inc. (NASDAQ: BYND), Digital Development Partners Inc. (OTC: DGDM), and Hormel Foods Corporation (NYSE: HRL).
Beyond Meat Inc. (NASDAQ: BYND) trumpets itself as a food company, manufactures, markets, and sells plant-based meat products in the United States and internationally. It operates under the Beyond Meat, Beyond Burger, Beyond Beef, Beyond Sausage, Beyond Breakfast Sausage, Beyond Chicken, Beyond Fried Chicken, Beyond Meatball, the Caped Steer Logo, GO BEYOND, Eat What You Love, The Cookout Classic, The Future of Protein, and The Future of Protein Beyond Meat trademarks.
The company sells its products through grocery, mass merchandiser, club and convenience store, natural retailer channels, direct to consumer, restaurants, food service outlets, and schools. The company was formerly known as Savage River, Inc. and changed its name to Beyond Meat, Inc. in September 2018. Beyond Meat, Inc. was founded in 2009 and is headquartered in El Segundo, California.
Beyond Meat Inc. (NASDAQ: BYND) recently announced a major expansion in its long-standing relationship with Walmart, the world’s largest retailer. Following this summer’s successful launch of the Cookout Classic™ value pack, Beyond Meat’s most affordable product offering to date, this fall, Walmart plans to triple the availability of the Beyond Burger® from approximately 800 locations to more than 2,400 stores nationwide beginning next week. The move comes as part of Beyond Meat’s effort to increase worldwide accessibility to simple, plant-based meat products made without GMOs.
According to the release, Beyond Meat first launched its frozen products at Walmart in 2015. Since then, Walmart has expanded its Beyond Meat in-store offerings to include the Beyond Burger and Beyond Sausage® in the fresh meat aisle and most recently, the Beyond Breakfast Sausage® patties in the freezer aisle.
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 14% in that timeframe. Shares of the stock have powered higher over the past month, rallying roughly 37% in that time on strong overall action.
Beyond Meat Inc. (NASDAQ: BYND) managed to rope in revenues totaling $113.3M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top-line growth of 68.5%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($222.3M against $66.3M).
Digital Development Partners Inc. (OTC: DGDM) is an interesting newcomer in the space, putting out a release this morning that places the company at the center of the hemp-based alternative meat movement, which is a rapidly growing facet of the space.
The move from the company is its announcement today of the launch of the Company’s new “Black Bird American Hemp” processing division, a strategy focused on the production and sale of high-quality hemp-based protein products to target the rapidly expanding alternative meat industry, which is currently dominated by Beyond Meat (www.beyondmeat.com) and Impossible Foods (www.impossiblefoods.com).
“Exceedingly high in protein, naturally gluten-free, low in carbohydrates, with omega fatty acids and all of the amino acids – the nutritional value of hemp hearts, the ‘nut’ inside the hemp seed, cannot be overstated,” commented Fabian Deneault, President of DGDM. “By focusing on hemp as a food product, we believe Black Bird American Hemp will have the ability to deliver a compelling high-quality, cost-effective, good-tasting protein source to the dynamic alternative meat industry.”
Digital Development Partners Inc. (OTC: DGDM) manufactures and sells CBD products, including CBD Oils, gummies and pet treats, and CBD-infused personal care products, as well as hand sanitizer gel and spray products.
In addition, Black Bird is a licensed grower of industrial hemp under the Montana Hemp Pilot Program. Black Bird is the exclusive distributor in the U. S. and Canada for MiteXstream, a plant-based biopesticide effective in the eradication of spider mites, a pest that destroys crops, especially cannabis, hops, coffee, and house plants, as well as molds and mildew. EPA approval of MiteXstream is expected in late 2020.
Digital Development Partners Inc. (OTC: DGDM) generated sales of $30K, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 407.7% on the top line. That said, the important commercial growth here is likely ahead as the company starts to capitalize on the interesting strategic foundation that has begun to be laid in place.
Hormel Foods Corporation (NYSE: HRL) has become a key player in the meat alternative space. The company operates through four segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, and International & Other. It offers various perishable meat products, including fresh meats, frozen items, refrigerated meal solutions, sausages, hams, guacamoles, and bacons; and shelf-stable products, such as canned luncheon meats, peanut butters, chilies, shelf-stable microwaveable meals, hashes, stews, meat spreads, flour, and corn tortillas, salsas, tortilla chips, and other products.
The company also provides turkey products; nutritional food products and supplements; dessert and drink mixes; and industrial gelatin products. It sells its products under the SKIPPY, SPAM, Hormel, Natural Choice, Applegate, Justin’s, Wholly, Hormel, Black Label, Columbus, etc. brand names through sales personnel, as well as through independent brokers and distributors.
Hormel Foods Corporation (NYSE: HRL) most recently announced it has donated more than 540,000 pounds of foodservice breakfast sausages to Convoy of Hope, a nonprofit organization with a driving passion to feed the world through feeding initiatives for children, community outreach events, and disaster response efforts. Over 64,000 cases of breakfast sausages are being distributed to a variety of food shelves throughout Texas, California, South Carolina, Missouri, Iowa, and Florida.
“We are incredibly proud to partner with Convoy of Hope to help support the fight against hunger,” said Kelly Braaten, manager, corporate communications – corporate responsibility at Hormel Foods. “We’re happy to donate more than 540,000 pounds of breakfast sausages to help them continue their work of feeding families and kids in need.”
It will be interesting to see if the stock can break out of its recent sideways action. Over the past week, the stock is net flat and looking for something new to spark things.
Hormel Foods Corporation (NYSE: HRL) generated sales of $2.4B, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of -1.7% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($1.7B against $1.4B).
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