Top 10 Bioeconomy Markets and Predictions for 2019

3. IPOs return (nutrition)

Just after Thanksgiving, the nutrition side of industrial biotechnology — and specifically, the “beyond the cow moovement” is, ahem, mooving faster with news that Beyond Meat filed for its IPO and Perfect Day inked a Joint Development Agreement with Archer Daniels Midland (ADM) to scale up the production of dairy proteins using fermentation in microflora. Beyond Meat’s placeholder IPO target is $100 million and is supported by Goldman Sachs, J.P. Morgan, Credit Suisse, BofA Merrill Lynch, Jefferies and William Blair in the IPO.

And Zymergen’s $400M Series C cap raise also raised eyebrows across the financing spectrum.

We think the IPO window is about to be shoved open again by a slew of nutrition-oriented companies, and the strain optimization techs and partners.

What’s driving the action? It’s combination of consumer shift, the industrialization of alternatives, and a successful foray into direct-to-consumer marketing.

As Beyond Meat expressed in its IPO:

We believe that consumer awareness of the perceived negative health, environmental and animal-welfare impacts of animal-based meat consumption has resulted in a surge in demand for viable plant-based protein alternatives. A key analogy for both the approach to and the scale of our opportunity is the strategy by which the plant-based dairy industry captured significant market share of the dairy industry. In the United States, the current size of the non-dairy milk category is equivalent to approximately 13% of the size of the dairy milk category. According to the Mintel Report, the non-dairy milk category in the United States was estimated to be approximately $2 billion in 2017. The success of the plant-based dairy industry was based on a strategy of creating plant-based dairy products that tasted better than previous non-dairy substitutes, packaged and merchandised adjacent to their dairy equivalents. We believe that by applying the same strategy to the plant-based meat category, it can grow to be at least the same proportion of the approximately $270 billion meat category in the United States, which over time would represent a category size of $35 billion in the United States alone. As a market leader in the plant-based meats category, we believe we are well-positioned to capture and drive a significant amount of this category growth. We also believe there is a significant international market opportunity for our products.

Beyond Meat’s flagship product is The Beyond Burger, the world’s first 100% plant-based burger merchandised in the meat case of grocery stores. The Beyond Burger is designed to look, cook and taste like traditional ground beef. Our products are currently available in approximately 28,000 points of distribution primarily in the United States as well as several other countries, across mainstream grocery, mass merchandiser and natural retailer channels, and various food-away-from-home channels, including restaurants, foodservice outlets and schools.

It’s a big market. According to Fitch Solutions Macro Research, the meat industry in 2017 generated $27 billion in retail sales in the United States and $1.4 trillion globally.