Beyond Meat (NASDAQ:BYND) is a company that produces and sells plant-based meats (products made from vegetables designed to mimic the feel and taste of animal protein) to food-service chains and grocery stores. Most revenue currently comes from its alternative beef products. But on July 8, the company announced it was launching a chicken alternative called Beyond Chicken Tenders. 

In this video from Motley Fool Live, recorded on July 13, Fool contributor Jon Quast explains to fellow contributor Toby Bordelon why he believes this is Beyond Meat's biggest product announcement since the company went public in 2019.

Jon Quast: This was really interesting. It's an announcement I've been waiting on for quite some time. They announced that they are launching Beyond Chicken Tenders. So if you know Beyond Meat, they primarily generate revenue from sales of their Beyond Burger. You can go to various fast food places, you can go to the grocery store and get the plant-based beef substitute. Now, they are launching Beyond Chicken Tenders. They've run a test with KFC [owned by Yum! Brands] last year before the pandemic. Because of the pandemic, they said it's not really the time for us to be launching a new thing, but now they're launching this Beyond Chicken Tenders into 400 independent restaurants around the country.

Why I think that this is the most significant announcement they've made as a public company is, remember that Beyond Meat started with chicken. University of Missouri had the tech. Ethan Brown, the founder of Beyond Meat licensed the technology to create a chicken product for grocery stores before the company came public. Then Beyond Burger was so successful that eventually they canceled their chicken line prior to coming public. In the months prior to coming public, they said the recipe wasn't quite right. So they've been working on this behind the scenes now for a few years and now they're relaunching it.

To me, that tells me that management has been working on this for a very long time and they feel like they have finally gotten it right. That tells me that I think this is going to be a compelling product. When you look at global meat consumption, chicken is the most consumed protein out there by a mile. This is optionality for Beyond Meat.

Why it's important is, for Beyond Meat to work out as an investment, they trade at something like 20 times their trailing sales. That is very expensive for a company with 30% gross margins. It may be not so crazy for a company like The Trade Desk where it's way up there, I don't know what it is, 80% gross margin? Beyond Meat down at 30 percent gross margin trading at 21, 20 times sales, that's a big deal. They need to grow that revenue. If they can launch into a completely new animal category with plant-based chicken, it's a chance to grow that revenue in a very big way.

Toby Bordelon: Thank you, Jon. I followed this. I used to be vegetarian back in the day, so when this came public I was interested to see if they could. I went from vegetarian, went on a road trip through Texas, had some barbecue [laughs] and then I was wondering if Beyond Meat, would, and Impossible [Foods] the other, would turn me back. But it hasn't yet. Their stuff is good. I think it's definitely a step above what's come before, but it's not enough. I still come back to the price too. It seems expensive.

Quast: Yeah.

Bordelon: But the brand is well known. They're doing really good stuff and this chicken is really interesting.

Quast: And they are targeting people more like me who is not a vegetarian, right?

Bordelon: Yeah, right. They are targeting people who maybe want to eat a little bit healthier or just want to mix it up a little bit. Don't necessarily strict vegetarians. It's pretty close. I think you've had the stuff, I'm assuming.

Quast: Yeah. Correct. The first time I had it, was right after Beyond Meat went public and I think they're headed at Denny's. I went just because it sounded so ridiculous. I just wanted to prove to myself that it was ridiculous and I actually liked it. That's when I started looking into the company more and I bought a little bit when the market crashed in 2020. So I'm a small shareholder.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.