Businessweek Extra - Beyond Meat CEO

of Beyond Meat, Ethan Brown. So Barkley's forecast that meat alternatives will be a hundred and forty billion dollar market worldwide in the next decade. And Jason, this may explain why when Beyond Meat debut as a public company in May of this year, share sword making it the best ip of since the financial crisis, it really took off. It's also why the company and its CEO makes the Bloomberg fifty list this year, and that aforementioned CEO also

the founder and president of Beyond Meat, Ethan Brown. He joins us from Los Angeles. Ethan. First of all, congratulations and thank you for joining us. I appreciate being here. Thank you. All Right, so let's do a little bit of a look back on twenty nineteen, because it feels like there were seven roll big inflection points as you look back, even going beyond the I p O, which I know everyone loves to talk about, what were the

business inflection points for you? You You know, if you look at the growth of the business from two thousand nine to today, we've always had the same goal in mind, which is to become a company that can provide protein

for the center the plate for the mainstream consumer. And so if you look at particularly our third quarter this year, whether it's the McDonald's tests we announced, the subways um or KFC or Duncan, all four of those were really important to us in terms of being able to communicate the message that we have, which is you can build a piece of meat directly from plants, you can provide it to consumers where they enjoy eating their food, and you can do so in a way that enables them

to continue to eat what they love, giving them the more nutritious something it's better for their bodies and better for the earth, and doing it in the formats that they're familiar with. What about this year surprised you the most? What was the most challenging? You know, it always is around continue to educate not only the consumer of the media around just how healthy and how much our company

is driven by the human health imperative. If you look at the products we're creating, take the Duncan sausage for example, that product has fifty percent less fat, It has percent less saturated fat, is less sodium, and has more protein

and more iron. So when you're beginning with a blank canvas and you're able to build a piece of meat directly from plants, you can leave out a lot of the things that you wouldn't want to be consuming on a daily basis, such as cholesterol, and you can lower things like saturated fat, and you can provide the consumer with a very healthy product that they get to enjoy. Yet continue to move the ball forward year every year

and making the products healthier and healthier. So as we get into you'll see us continue to drive toward goals that will enable the consumer to eat what they love, but do it in a way that's healthier for them. We'll talk about that because I feel like that comes up often about maybe this becoming even a healthier product because there is still a fair amount of sodium and so on in it. Do you guys think about doing some kind of reformulating to lower calories. Are a lower

sodium amoun is that kind of in the future. So if you look at the DNA of the company, we are an innovation driven company. We produce all of our products here in the US, and we have our our innovation center here in Los Angeles. We call that Innovation Center in the Manhattan Beach Project. We do that because we're near Manhattan Beach. But more importantly, weren't evoke that sense of urgency and scale that occurred in the Second

World War with the Manhattan Project itself. Were brought together the very best scientists, the best engineers, the best managers and gave him a clear goal, which is to build meet directly from plants. Now, when you're doing that, you're always improving, and we have these parameters we call the fat, flavor, aroma, puters, and texture were constantly driving toward making the products better in each area and nutrition would of course be part

of that. But it's also about marketing and helping people understand the products. So if you look at it beyond Burger for example, that has sixteen percent daily value of sodium, not sixty but sixteen, which is well within reason for many many meals that folks will consume, such as two flower tortillas or half a couple of mari narrow sauce, etcetera. So a lot of it is just separating the misinformation and hype from reality. This product has an extremely healthy product.

It's one that I consume almost daily. It's something I feel very good about giving to my own children. And so it's really about let's educate consumers about the health of our products and about the process. We're very proud of our process. If you look at how we produce

meat from from plants. Instead of running a lot of plant material through animals and the antibiotics that go without other hormones depending on the species of veterinary drugs, et cetera, what we're doing is taking that protein directly from the plant. We're running it through heating, cooling, and pressure, and that resets the bond so that they take on that fibrous texture of muscle. That's it for me. That's a much better process than one that we can be proud of.

We offer complete transparency. You'd be welcome to come to our facilities, knock on the door, and we give you a tour people should be able to see where and how their food is made. And we believe very strong in that principle, and so Ethan, speaking of a different sort of process, walk us through the process of assessing these partnerships. You know, you name checked some of the best known when it comes to you know, fast food. You've also got some partnerships in casual dining. How does

that work? Because pun intended, it feels like everybody wants a piece of this market right now, right so you always want to align yourself with the marquee players. And that's what we've done from the beginning of the company. So when we decided to go into retail way back in two thousand nine, the first company we called was Whole Foods, and then we've been able to cliff right

out through Kroger, et cetera. But when then you look at our venture history, the first venture firm we worked with the client of Perkins, and now we have a great list including Great Point Ventures and many others. Um But if you're now looking at the fast food space or a quick serve restaurant space, you also want to adopt the same philosophy. Who are the marquee players? And how do you become UH of service to them. And that's what we're able to do. Whether it's McDonald's, whether Subway,

whether it's KFC or Duncan. We're constantly looking Carl's Jr. Hearties, etcetera. We're constantly looking to serve the very best partners in the space so we can grow with them. What's the focus? Is it retail or food service or will it be a split going forward? Our focus is entirely on the consumer. It's our relationship with the consumer that makes the business so special. We listen to what they say. They told us no GMOs, they told us nothing artificial, they said

keep everything natural. So that's what we do UM and that makes it harder. By the way, we will be much easier genetically modified plant material to make it UH take on the texture and appearance and aroma of of of animal protein. But we won't do that, and so we're constantly focused on what the consumer wants. We'll need to consumer where they are, so if it's if it's UH, it's quick ser of restaurants will be there for them. If it's retailed before them. Right now, it's about and

the market will tell us which directions. Okay, so it could change going forward, right and so Ethan, when you think about the test, let's just talk about McDonald's for a second. What have you learned so far? Because obviously that's from a volume perspective, but also from a brand perspective, something that everyone investors included have been looking at very closely.

What have you taken away from that test? So I had a great privilege of being up in the Ontario area a couple of weeks ago, and I drove out to McDonald's there and I went to three different stores and had the burger in each each location, and they were identical and delicious. It was a fantastic experience for me and one that was very satisfying. It's a goal I've had for a very long time to be of

service to McDonald's. UM, it's going very well. I think you heard the CEO of McDonald's Canada say that we can't comment further than what they've said publicly, but I'm very enthusiastic about the relationship and our ability to grow the partnership. Does it expand into the United States, that's up to them, UM, But what you want is a great test, and I think we have every sign that

that's the case. All right, So let's talk about some of the different products, because there was a lot of excitement, including in my household when you got to Duncan. We're big mobile app users there, And obviously that's a different sort of approach in some ways, not the least of which just because you're talking sausage instead of Burger's. The sausage market, as it were, has been described as a

really huge opportunity for you and for others. Why is that and what are you seeing as you look at the sort of the different modalities of beyond. Yeah, so I thank you for asking that question. It's a really important one, not only to our business, but to the global protein supply. Um. You know, I came out of the fuel cell industry, and the primary focus of the business that I was with I was around automotive and

it was around replacing the internal combustion engine. And what you find what's happening today, uh, in the protein industry is that one of the core sources of protein from animals has taken a severe supply hit. And so if you look at the Chinese market, I think it's about fifty of the herd is going to be destroyed based

on the the flu virus. And so if you think about that, if that had happened, and that's about the world supply, if that had happened in the automotive sector, where all of a sudden of the internal combusting engine manufacturing capability went down overnight, you would have seen in the U. S. Department Energy and many other world energy agencies go after with a concerted plan about how to bring forward some of these alternative technologies. We are doing

that today with my company in this industry. If you're such a supply shock, we should be able to take advantage of that. So we are very focused on pork, not only here in the United States, but globally. Let's talk a little bit more about China. China accounts for about twenty seven of the world's meat consumption by volume. Um. They already eat a lot of plant proteins, and they kind of look at meat as a bit of a status symbol there. What's your approach, what's your expectations for China?

You'll see us be very aggressive there. We are aggressive in each market that we occupy, whether here in the United States. Mentioning again those partners just McDonald's, KFC, Duncan, Subway, etcetera. UM, you'll see us move with speed, um and exploit the first mover advantage we have globally in terms of building the brand that's most closely associated with the plant based meat movement. UM. So I can't disclose anything particular, but you can guess that we're very excited about that market

UM and very active in our plans. All right, let's talk a little bit about chicken if we can big chicken fans here as well, kind of hungry. I'm just going to tell you seriously, I mean the KFC test as it were, uh down in Atlanta, I believe is where that was, it went gangbusters. How soon can you sort of get into that market in a meaningful way. So you'll see some exciting things from us in the

poultry space. I can't name specific partners or developments, but UM, you know, we look at three core platforms with beef, pork, and poultry, and you can see consumers pulling off very quickly of beef and pork. And you're also starting to see some pressure around the poultry industry. So UM, we we've done a lot of work there you'll see the

fruits of that, Hey consolidation. I'm just curious because I feel like, you know, this market went from nobody talking about it to Bam, you guys have your eye po and then all of a sudden, it seems like smaller players, larger players, everybody is getting involved in it. How do you see this market kind of play out? Is it like a coke and pepsi market going forward? You know what I am most focused on, and this is something that we had to repeat quite a bit throughout the

the I P O Road Show. Uh, is there's nobody in the world who wants to replace beyond meat products on the shelf more than me. UM. You know, we have an appetite for innovation UM that I think is barned on. The goal is every year to replace the current products we have with new, improved versions, whether the flavor of rome, appearance, text, or the health claims, etcetera.

And so while we are aware there is competition out there and that many many partners are companies rather or entering the market, our focuses on that true north of building meat directly from plants and doing it perfectly. And we're getting closer every year. We've been at it eleven years now, and we'll get closer in our twelfth year

and the thirteenth year, etcetera. Um, you know, but I do think it's important to note, and there's been a lot of discussion in the media about this, that just because a large company intends to come in and capture significant market share does not necessarily mean that's going to happen. And I think history is replete with examples where there have been those fears when disrupters coming along and they haven't panned out. And so we are very focused on

executing against our mission. Uh and I think the rest will take care of itself. Ethan elsewhere on the Bloomberg fifty list, there were some notable influencers, as it were,

very influential people out in the world. You guys have leaned into this notion of influential folks kind of signing on the Go Beyond campaign, I believe is what it was called launched earlier this year, help us understand what's underneath that, especially at a time when people love this notion of authenticity, they want to make sure that their values aligned with the people who they are following, quite literally, and I just gotta throw out some names because Bill

Gates has been a backer. Leonardo DiCaprio, UM. Former McDonald's CEO Don Thompson. I mean you've had incredible people and then a lot of celebrities as well. Yeah, it's it's been very purposeful. If you look at the history of the company. When I was growing up, they Got Milk campaign was a very big deal, and I had some exposure to the dairy industry as a kid. Um and uh, you know that was around Bo Jackson, Derek Deeter, etcetera.

And the message there was to parents that if you feed your if your children are consuming milk, they'll grow to be strong, healthy, etcetera. UM, And in my case, with our products, that is true that you you can and if you look at movies like Game Changers, etcetera, you can affect even individual day performance from a student athlete, for example, through the consumption of our products over over

animal protein. And so what we wanted to do was convey the message that you can not only flourish with our our products, uh, but you can over a longer period of time, avoid some of the chronic disease that is so prevalent in our in our communities, and so we wanted to get athletes out there who obviously depend on their bodies for their paychecks and for their day

to day performance and have them tell the story. And so I hired Jeff Manning, who was the principal at the California Milk Board who kicked off the original got Milk campaign many many decades ago. UM and then a woman in Beth Moscowitz came and joined our company and brought in UH the the ability to tap into this intersection sports and culture, which is so important to us.

We believe that our products will make you feel better, perform better, and have a longer term health prospect, and we wanted to have the very best of our communities in terms of athletes, convey that message and the notion about something being genuine is so important. Right. We don't just take anybody who comes into our influencer program. We really look to see are they living a lifestyle? Do they believe in in what we're doing. They don't have to be vegan, but having them UH lean into this

dive and the principles behind it is really important. And once you do that, you don't have to create deals that have UM milestones etcetera. You just let them go do what they do best and they bring us along with them. And so, whether it's Kyrie Irving, UM, Chris Paul, etcetera. So many of these terrific athletes, they're adopting our products in their training regimes and they're seeing great results along the way, and so then they go out there and

speak about it. That's the best way, in my view, to market is find people who believe in what you're doing and work with them to tell the story. All right, Either, one last question for you before we let you go. You know, you've talked throughout this interview in a very personal way, and you talk about what you feed your kids, and even when you're talking about the folks that you're working with from a partnership perspective, this does feel like

a very personal mission. I do wonder what you've learned along this very interesting year as a CEO and as a leader of a company that really is about a lifestyle and sort of who we are. You know, I'm very grateful to be in the position that I'm in. UM. This is much more than a business. UM. It's something that helps people lead healthier lives. UM. It helps UH

I think address some of our largest environmental problems globally. Um. And so to get up every day and be able to go into an office and work on issues that are so important not only meat personally, but to the world as a privilege and so uh. This year, I think we were recognized by the markets for what we're doing. Um. You know, and we don't believe that this is a short lived trend. Uh. This is something that has very

long legs to it. Um. If you think about what we're doing, we're not suggesting that people don't eat meat. We think that'd be a big mistake. You know, I grew up eating need to love meat. I love fried chicken, I love burgers. The idea behind the company is to provide a better form of meat. Right, to provide meat that provides all of the delicious, satiating experience that we've come to love, but does so uh in a way

healthy for your bodies and healthier for the earth. Um. You know, if you look at what the mobile phone did in relation to the landline, nobody had to denigrate the landline. And we don't think we have to denigrate animal protein. We simply have to provide the consumer with a new and better choice and let them make the decision. And if we're successful, more and more will sign on with this, And that's beyond me CEO Ethan Brown. Look, this is a company that is in the middle of

so many mega trends. It's essentially a lifestyle brand. Yeah, and this is why he's part of the Bloomberg fifty list. But I also think this is gonna be a big story for as well. You've been listening to Bloomberg Business Week Extra, be sure to tune into Bloomberg Business Week Radio Live Monday through Friday at two pm Wall Street Time. I'm Bloomberg Radio. I'm charl Messer, and I'm Jason Kelly. This is Bloomberg