Please ensure Javascript is enabled for purposes of website accessibility

3 Stocks for a Meat-Free Future

By MyWallSt Staff - Oct 7, 2019 at 11:03AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

In the wake of McDonald's decision to test a plant-based menu item, here's a look at the future of fake meat and which companies are most likely to dominate it.

This article was first published by MyWallStWhich 2 pot stocks will beat the market? Find out in MyWallSt's free guide!

Last week, McDonald's became the latest fast-food giant to join in on the fake-meat craze when it revealed plans to test a plant-based burger made out of Beyond Meat patties. The menu item, which is currently limited to certain McDonald's outlets in Canada, will allow the company to gauge "customer demand" and "impact on restaurant operations," according to top executive Ann Wahlgren.

A burger in a plate outdoors.

Image source: Unsplash.

Of course, McDonald's is only the latest and highest-profile company to get on board. Burger King, Subway, Dunkin', and many others all now offer plant-based products. Few investing trends are more talked-about nowadays than the alternative-meat space, and the partnership between the biggest name in fast-food history and one of fake meat's rising avatars seems to indicate that it's early days yet for the so-called bloodless revolution.

1. Beyond Meat 

Based in Los Angeles, Beyond Meat (BYND -0.30%) was founded in 2009 by activist-entrepreneur Ethan Brown. Following several rounds of venture funding, the company released its first simulated-meat products on supermarket shelves in 2013. The combination of solid branding and an innovative offering helped Beyond quickly gain serious traction, and by 2018, its products had been rolled out to almost 50 international markets.

After a blockbuster IPO in May, the company's share price went through the roof over the summer, hitting astonishing highs of over 800%. We've since seen a perhaps inevitable climb-down, as well as the equally inevitable backlash against the hype surrounding the company. However, the aforementioned McDonald's deal makes it clear Beyond Meat's future is as exciting as its recent past, with or without the hype.

2. Tyson Foods (TSN)

A giant among giants, Tyson Foods (TSN -0.70%) has been feeding America since before World War II. Though it may seem like an unlikely inclusion, the company has made a series of strategic bets in recent years through its venture capital arm, Tyson Ventures, on meat-substitute meats. Early last year, Tyson invested in Memphis Meats and Future Meat Technologies -- technology companies specializing in meat grown from cell cultures -- and purchased a 6.5% stake in Beyond Meat. In April, the company quietly sold these shares, citing internal tensions.

However, Tyson Foods' connection to the fake-meat industry is not merely a tangential one. A few months ago, the company unveiled a pea-based alternative chicken nugget product of its own, placing itself in direct competition with its upstart peers. Because its core business is so large and diverse -- and its production and distribution capabilities so powerful -- an investment in Tyson Foods is therefore protected from some of the risks that are bound to plague an emerging industry.

3. Kellogg

The Michigan-based food manufacturer behind some of the world's best-loved breakfast cereals, Kellogg (K 0.41%) has seen its stock grow steadily since its IPO in 1979. Indeed, the company is celebrating four decades as a globally recognized public company this year.

Founded in 1898 as a health-food maker, the company soon came to fame with its iconic Kellogg's Toasted Corn Flakes cereal. More than a century has passed since then and Kellogg has proven adept at tailoring its offering to changing public demand through product diversification and ambitious acquisitions.

More recently, Kellogg made a foray into the alt-meat world. In September, the company promised that its new "Incogmeato" line of meatless products will be available by 2020. While it is entering a crowded market, Kellogg already boasts a trusted name brand. On top of that, the company's vegetarian burger is already the most popular one out there. Its push into innovative meat substitutes could turn out to be the real thing -- well, the real fake thing.

MyWallSt logo

Image source: MyWallSt.

One of these pot stocks is already +100% this year. What are you waiting for?

MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in Beyond Meat and The Kellogg Company. Read the full disclosure policy here.

The Motley Fool has the following options: short January 2020 $94 calls on Restaurant Brands International. The Motley Fool recommends Dunkin' Brands Group. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Kellogg Company Stock Quote
Kellogg Company
K
$75.51 (0.41%) $0.31
Tyson Foods, Inc. Stock Quote
Tyson Foods, Inc.
TSN
$79.36 (-0.70%) $0.56
Beyond Meat Stock Quote
Beyond Meat
BYND
$36.94 (-0.30%) $0.11

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
373%
 
S&P 500 Returns
122%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/11/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.