The Companies Beating Amazon At Its Own Game
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 may seem untouchable, but it's now lost market share to at least two companies as this trend takes off, and now a third company is set to repeat the play.
Now, there’s a third specialized e-commerce ecosystem that seems poised to do it again.
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.
But this story is 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.
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.
That gave people time to think about the processing and distribution of food in our supply chain, as well as what it’s doing to our health. Aside from an endless list of diet-related chronic diseases, the animal-based food industry has been the source of multiple pandemics, from swine flu and bird flu to salmonella and E. coli.
It’s also an incredibly detrimental force on 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.
Just look at U.S. retail sales growth of plant-based meat alone during the initial months of the pandemic:
And then the Canadian:
While the initial panic-buying sobered up from March to April, it’s holding on to major gains--enough so that the trend now appears solidified.
The pandemic may have destroyed businesses and entire industries, but it’s also created massive new opportunities--and getting in on the ground floor of a plant-based ecosystem company that aims to become like the Amazon of this megatrend is one of the best ones yet.
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.
They use FedEx to ship across Canada, with bulk meals going to a single address and then immediately disbursed by local courier.
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.
This one has unlimited potential because the verticals are unlimited.
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.
And in my opinion, it’s a very undervalued company at the beginning of this megatrend.
Sure, there’s Beyond Meat (NASDAQ:BYND) and Impossible Foods.
Beyond Meat IPO’ed at $66 a share. It’s exploded already to $195, with a market cap of ~$12 billion. There isn’t really any more upside here. Impossible Foods isn’t public. PlantX, on the other hand, has a huge ecosystem with tons of verticals and a tiny market cap of only $60 million. Yet--it plans to become the Amazon of everything plant-based.
This 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.
Other companies looking to cash in on this new niche market:
Beyond Meat (NASDAQ:BYND) 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.
Beyond Meat’s mission statement speaks volumes, “By shifting from animal to plant-based meat, we can positively impact four growing global issues: human health, climate change, constraints on natural resources, and animal welfare.” It’s a clear cut example of everything the new generation of investors is looking for in a company. It is combatting social challenges, climate change, and looking to tackle the hurdles facing our growing population.
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.
In a release, the company noted, “Tyson Foods is committed to sustainably offering the protein and food products that consumers want. Through the introduction of its Raised & Rooted™ brand of plant protein and blended protein options including burgers and nuggets, Tyson Foods has become the largest U.S. meat producer to enter the growing alternative protein segment.”
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."
Salesforce (NASDAQ:CRM) isn’t exactly a plant-based distributor, but it is a worthwhile company to watch as the broader ESG push gains grounds. Though its primary function is as a SaaS company focusing on creating a platform to improve customer service, it’s dove in head first in its commitments to sustainability, charity and overall positive action within the community.
ESG is a big part of Salesforce’s core values. In fact, Salesforce CEO Marc Benioff wrote in an opt-ed for New York Times arguing for a new form of capitalism that, “In the United States, income inequality has reached its highest level in at least 50 years, with the top 0.1 percent — people like me — owning roughly 20 percent of the wealth while many Americans cannot afford to pay for a $400 emergency. It’s no wonder that support for capitalism has dropped, especially among young people.”
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.
Burcon NutraScience Corporation (TSX:BU) is a Canadian tech firm rethinking the plant-based diet. With a focus on high-purity, sustainable, flavorful, and affordable products, Burcon has checked every box in the consumer’s book. Founded way back in 1998, the company has been at the forefront of the movement for over two decades, and it’s only become more refined since.
According to its mission statement, Burcon “seeks to improve the health and wellness of global consumers through the discovery and development of sustainable, functional and renewable plant-based products for the global food and beverage industries.”
Else Nutrition Holdings Inc. (CSE:BABY) is another innovative plant-based lifestyle company from Canada. Else Nutrition has taken a different approach than many of its competitors, targeting a particularly young market – babies. Else was a first-mover in this space, offering a well-rounded, clean, sustainable and most importantly, plant-based, approach to baby food.
Their products aim to deliver al of the same benefits as typical baby food, but with an organic twist. In fact, 92% of their products are made from three core healthy ingredients, almonds, tapioca, and buckwheat. And the best part, is they never alter the plants’ chemistry or remove any of the micronutrients, they just alter the texture.
Maple Leaf Foods (TSX:MFI) is another veteran in the Canadian foods realm. Since 1991, Maple Leaf has been making aggressive acquisitions, supplying high-quality foods, and leading in new innovations to ensure the highest quality products for all of its consumers around Canada. And just last year, it announced its plans to dive head first into the plant-based foods industry with a $310 million facility in Shelbyville, Indiana.
More than that, however, Maple Leaf Foods is also committed to slashing its own carbon footprint. In fact, on November 7, 2019, the company announced that it was the first major carbon-neutral food company – a huge claim to fame in a world racing to go green.
The Very Good Food Company Inc. (CSE:VERY) is a Canadian company that is quickly gaining a lot of ground in the market. With the slogan, “we believe in butchering beans, not animals,” they’re looking to tap into the plant-based niche in a hurry. And it’s resonated very well with investors.
Since its IPO in June, the Very Good Food Company has seen its share price grow by over 70%, and it’s showing no signs of slowing. In just a few short months, the company has opened several new facilities, signed a string of deals, and is quickly carving out its place in Canada’s fast-growing plant-based lifestyle scene.
Modern Meat Inc (CSE:MEAT) is a Canadian company following directly in the footsteps of its American cousin, Beyond Meat. With a focus on Instagram-worthy products that could easily garner the interest of any meat-eater, the company is looking to make the plant-based lifestyle trendy. And consumers are loving it.
The company announced in early October that its stock had sold out for over 15 weeks in a row. "We are pleased to announce that our sellout streak is continuing and there is an obvious demand for our products. Despite the interest in our products we are currently constrained by our production capacity and continuing the set-up of our new facility," stated Tara Haddad, Chief Executive Officer of the Company.
By. Nick Marsh
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