LONDON, Oct. 20, 2020 /PRNewswire/ -- There's a new $4.2 trillion trend taking over wall street, and it's very bad news for tech giants like Amazon. The world's e-commerce monolith isn't completely untouchable. It's lost market share before to at least two companies that specialize in things Amazon simply couldn't do better--or even bigger. Now, there's a third specialized e-commerce ecosystem that seems poised to do it again. Mentioned in today's commentary includes: Beyond Meat (NASDAQ:BYND), Kellogg (NYSE:K), Tyson Foods (NYSE:TSN), Chewy Inc (NYSE:CHWY), Amazon (NASDAQ:AMZN).
The first two were diapers.com and Chewy Inc (NYSE:CHWY). They both exploded on the scene, managing to steal half of Amazon's market share in those segments. Diapers.com became so successful that Amazon bought them out.
Chewy.com spectacularly rose out of a basement dotcom into a pet supplies beast that was sold by its creators for $3 billion to giant PetSmart and is now worth a stunning $26.4 billion. Chewy has cornered some 50% of the U.S. market, compared to Amazon's 45%. And it's growing faster, too. And the former 17-year-old co-founder of that basement dotcom that turned into Chewy is back.
This time with something potentially much bigger than $26-billion dog food. This time, it's about a lifestyle megatrend that's got a dizzying number of revenue verticals. The megatrend is everything plant-based. The company is PlantX Life Inc (VEGA.CN). And this isn't a passing, vegan "hippie" fad.
It's a megatrend that's stealing market share from a global food services industry that could be worth as much as $4.2 trillion by 2024. It's trouncing the $950-billion global meat industry. And it's threatening to completely upend the players in the $26-billion food delivery sector.
Meat is being replaced, and there are billions of dollars of opportunity to be found in its alternatives. But only for the company that can create an entire plant-based ecosystem. In other words, only for a company that can become the Amazon of the megatrend. That's PlantX.
The Planet-Based Evolution
Mother Nature is back, and she's ready to mint millionaires. We've evolved, and so have our eating habits. And the pandemic has hastened that evolution far faster than the market could have imagined. Meat is now associated with poor health, shorter life-spans, and the spread of disease.
There's no going back now. Meat is now irrevocably associated with the potential for carrying disease, not to mention its growing association with a variety of health issues. The first five months of the pandemic led to widespread supply chain disruptions for food. In turn, farmers were forced to dump produce and milk and cull animals due to slaughterhouse slowdowns and closures as workers tested positive for COVID-19.
It's also an incredibly detrimental force to the environment. From the air we breathe to the nutrients we put in our body, meat is killing us. There's no going back now, even if it's still a long road to complete plant-based nourishment.
Meat is now irrevocably associated with the potential for carrying disease, not to mention its growing association with a variety of health issues. And plant-based is more than ever becoming not just something we eat, but a way of life.
Dizzying Verticals & Deal Flow
This isn't just a company--it's an entire community. It's an entire health lifestyle ecosystem.
PlantX Life Inc (VEGA.CN) has its own plant-based food products, house plants, cosmetics, decor, pet food, and even its own celebrity chef. You can shop online for just about everything you can imagine that is plant-based, shop in a smart store, order plant-based takeout or find the best places to dine vegan.
It's making plant-based meals for restaurants that have an urgent need to come up with more non-meat options for its pandemic-panicked clientele. And it's deliciously mainstream.
Plant X recently acquired one of the leading plant-based companies in the UK--Bloomboxclub.com. Bloombox is on a tear, with sales skyrocketing amid the pandemic and $20 million in sales to prove it. Bloombox handles the curation for PlantX, which deals only with the best-in-class. They don't hold inventory or maintain expensive warehouses. Ecommerce 2.0 is all about "curation", not waste.
In Canada, PlantX has teamed up with Vancouver-based UpMeals, which has a Grade A kitchen. UpMeals prepares the chef-designed meals from PlantX, making PlantX profitable right out of the gate. By early next year, we expect it to be happening in the United States, as well. But there's also a brick-and-mortar element. The PlantX flagship store, coming soon, isn't your typical brick-and-mortar establishment.
This store is cutting edge in every respect. There are no carts. No aisles packed with products. Instead, it's all scan QR codes, and payments by smartphone or tablet. That means that in a tiny retail space, PlantX (VEGA.CN) can sell thousands of products. And because it's an entire community … it draws people into a digital plant-based space that gives them a sense of belonging at a time when that is urgently needed.
The deal flow has been extremely fast-moving. In early September, PlantX closed a $30-million deal with San Diego-based Liv Marketplace to build and operate PlantX's first brick-and-mortar retail location in California. That confirms a huge push into the United States, with a 4,515-square-foot store that will sell a line of over 5,000 plant-based products.
And a lineup of other deals …
- PlantX acquired UK-based Bloombox Club in late September, and it's now on target to hit $4 million in gross revenue.
- That same month, PlantX cut a series of deals with specialty producers, grocers and even LA-based celebrity chef Gregg Drusinsky.
- It launched its own glacial water brand in September.
- On October 8th, PlantX jumped into the $38.4-billion North American pet food industry by launching yet another vertical with Kirtana Inc. products.
- Plant-based home meal delivery services started delivering in April and have already hit 10,000 meals.
And it's just a healthy lifestyle and tons of verticals--we're looking at healthy margins, too.
PlantX says its plant sales have a 55% profit margin, followed by online food sales at 40% and delivery at 35%. This isn't a tech startup that's attracting investors on sheer growth runways without clear profit potential. This is the tech startup 2.0 generation of ESG-focused ecosystems with tons of verticals for making money.
Beyond Dog Food
Amazon DOES have competitors. And if Chewy became a threat, PlantX could potentially become a far bigger one, now that it has Canada covered and is pushing into the United States.
What it takes is a specialized ecosystem that does what it does better than Amazon. That's exactly what PlantX Life Inc (VEGA.CN) aims to do. And with Sean Dollinger behind the wheel, it stands a good chance.
He's made a multi-billion-dollar company before, and we're betting he can do it again. He started his first delivery company when he was only 17 years old, in a basement. That business became one of the largest in Canada. In fact, that business, launched with Ryan Cohen, became Chewy.com.
What Dollinger has built this time around has far greater potential than Chewy. It's got its own pet food line, and an entire ecosystem whose potential customers are anyone who wants the best Mother Nature has to offer.
That includes anyone who eats food. It's a direct challenge to the $4.2-trillion global food services industry.
Sure, there's Beyond Meat (NASDAQ:BYND). Beyond Meat took the world by storm, securing key partnerships and locking down its marketing in a way that compelled a new generation of would-be meat eaters to make the switch to a new plant-based alternative. And the market has responded in kind. Since April, Beyond Meat has soared by 111%, quickly becoming a favorite for Robinhood stock traders.
And it's rise to glory is just getting started. Today, the plant-based meat alternative giant is already worth nearly $12 billion, but new research suggests the market could climb to a whopping $74 billion in just the next few years. From "meatballs" to sausages and 'ham'burgers, Beyond Meat is constantly expanding its product line to appeal to every type of customer, and as this trend of going 'beyond meat' gains traction, the company is likely to reap the benefits. The trend is so big that even industry giants are jumping on board.
Tyson Foods (NYSE:TSN), though not exclusively engaged in the sale of plant-based products, is another company with an ESG twist. And even better, it has a wider selection of products available for both meat-eaters and plant-based diets. This is key in a time when almost 98% of consumers who buy plant-based products also buy animal meat.
Tyson is set to win big as a growing number of Americans begin to identify themselves as "flexitarian", or people who still eat meat, but more often choose vegetarian options. While the "vegan wave" grabs more headlines, the reality is that many more consumers fall somewhere in the middle. And that's great for Tyson, which offers an array of products that will tickle the tastebuds of a wide variety of customers – with a sustainable twist.
Kellogg (NYSE:K) is another food giant making the jump to plant-based products in a bid to compete with the success of Beyond Meat and unlisted competitor Impossible Foods. Last year, Kellogg teamed up with Morningstar Foods to launch a line of plant-based products aptly named "Ingogmeato."
Kellogg's line of plant-based meat substitutes will be made from non-GMO soy, which is a step away from its competitors. Beyond Meat, for instance, uses a pea protein substitute. Kellogg's move is a bold one because, while the taste and texture may hit the mark for many meat-eaters making the jump, it is a top allergen which could take away from some of its sales potential.
Regardless, Kellogg is clearly eying its share of this new market, and taking the younger generation's push to go green – literally and figuratively – to the next level. In a statement, the company noted, "Our brand is really leaning in and making sure that we're taking our responsibility as America's number one veggie burger brand seriously."
Even tech giants can't ignore this trend. They're looking to capitalize on both the ESG boom and the plant-based lifestyle trend.
Amazon (NASDAQ:AMZN) brings the ESG boom and giant e-commerce industry together with ease. The tech giant has gone from selling books to selling practically every other imaginable item from one easy-to-use website. And it's done so with an ESG twist. Not only has Amazon led the e-commerce industry in reducing its own emissions, it's also pushed its suppliers and delivery infrastructure to do the same.
And that's not all. Amazon is also on the cutting edge of consumer data. With over 600 million items for sale, Amazon has been able to predict consumer trends and bring in new offerings that will suit consumer needs. And that includes entire departments dedicated to plant-based diets and other plant-based lifestyle options.
And PlantX (VEGA.CN) is "beyond meat" in a much bigger way. It's a new lifestyle, and it's being led by a massively successful entrepreneur who's done this before, and it could ride the tailwinds of a pandemic that has changed our lives forever.
By. Nick Marsh
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