Beyond Meats attempts to reduce the risk in the portfolio options through two overarching areas.
Leveraging scouting options as they build their portfolio of alternative meat options through the use of different strategies through their core distribution channels of U.S. Retail, U.S. Foodservice, International Retail, and International Food Service. These show the type of flexibility in the option to expand, even though they've had stock market analyst troubles in the near past, although their stock has significantly increased since their latest annual filing, due to their declining revenues during the pandemic, e.g., did they hit their peak wall (unlikely based on the overall market and their competition) or is the company itself struggling to sell its products and what levels of uncertainty around future sales does the analyst have. Recent forays into each of these markets in 2021 for Beyond Meat included:
- U.S. Retail and Foodservice Distribution Changes:
- New versions of the Beyond Burger and Beyond Beef
- Launching Beyond Chicken Tenders
- Tests of Beyond The Original Orange Chicken
- Tests of Beyond Pepperoni
- International Retail and Foodservice Distribution Changes:
- Beyond Meatballs in the EU
- Beyond Breakfast Sausage Links in Canada
- Beyond Italian Sausage Crumbles in Canada
- Test of Beyond Meat Nuggets in Canada
- Test of the McPlant burger in the U.K.
- Test of the McPlant burger in Ireland
- Introducing Beyond Pork in a heavy pork market like China
Flexibility in suppliers to drive down risk through their supply management programs and limiting their suppliers also drives Beyond Meat's risk mitigation strategies; as noted in their most recent 10-K:
We have a multi-year sales agreement with Roquette Frères (“Roquette”) for the supply of pea protein which expires on December 31, 2022. We are obligated to purchase certain minimum annual amounts as specified in the agreement.
Subsequent to the year ended December 31, 2021, on February 8, 2022, we amended our supply agreement for pea protein with PURIS Proteins, LLC, or Puris, (the “Puris Agreement”) to extend the term through December 31, 2022. We obtain pea protein under the Puris Agreement on a purchase order basis and have the right to cancel purchase orders if we provide timely written notice. The amount purchased in each quarter of 2022 is mutually agreed upon by us and Puris prior to each quarter and becomes a binding quarterly commitment upon such agreement. We also have the right to be indemnified by Puris and must indemnify Puris in certain circumstances.
Other than the pea protein supply agreements described above, we generally do not have long-term supply agreements with our other suppliers. As most of the raw materials we use in our flavors are readily available in the market from many suppliers, we believe that we can within a reasonable period of time make satisfactory alternative arrangements in the event of an interruption of supply from our vendors.
Beyond's investments in their manufacturing plants helps to illustrate their actions under the "the option to grow" type of flexibility as they make manufacturing and quality control of their products a core competency and not outsourcing those aspects especially as they've had problems in the sourcing arena in the past. Their continued focus on making their pea protein texture and taste also remains an example of costly-to-imitate flexibility through their use of their technological competency.