Welcome to the 2020 Beyond Meat, Inc. Annual Meeting of Stockholders. I would now like to turn it over to Seth Goldman. Mr. Goldman, please go ahead.
Thank you, and good morning, everyone. It is now 9 am, and I would like to call the meeting to order. I am Seth Goldman, Chair of the Board of Directors of Beyond Meat Inc. And it is my privilege to welcome you to our 2020 Annual Meeting of Stockholders. This is our 1st Annual Meeting since going public and we thank you for joining us.
In addition to supporting the health and well-being of our stockholders and other meeting participants during the COVID-nineteen pandemic, we believe that holding the Annual Meeting virtually helps to expand access, facilitate stockholder attendance and reduce costs and the environmental impact of our Annual Meeting. In accordance with Beyond Meat's amended and restated bylaws, I will be acting as Chair of the meeting. This meeting is being held pursuant to the company's bylaws and the written notice sent to all stockholders of record as of March 23, 2020. Joining us virtually today are members of the Board of Directors our Founder, President and Chief Executive Officer, Ethan Brown our Chief Financial Officer and Treasurer, Mark Nelson our Vice President, FP and A and Investor Relations, Lupi Kattuwa and several members of our senior management team. Representatives of Zolay and Touche LLP, our independent registered public accounting firm have also joined us and are prepared to respond to any questions.
Let me also name our officials for today's meeting, each of whom is in attendance virtually. Terry Witteeman, our General Counsel and Secretary will serve as secretary for this meeting. As stated on the proxy card, Ethan Brown, Mark Nelson and Terry Witteeman will act as proxies. If you have returned your proxy card, they will vote your shares as you indicated on the proxy card. Crystal Polly from American Election Services LLC will serve as the Inspector of Election.
Ms. Polly has previously taken her oath as the Inspector of Election. Upon joining the meeting, you will see that we have provided a copy the rules and procedures of conduct for the meeting on the web portal. To conduct an orderly meeting, we ask the participants abide by these rules. As stated in the rules, there was an opportunity to submit a question online.
We will conduct the business of the meeting first. Next, our Founder, President and CEO, Ethan Brown, will share some remarks regarding the business and then we will turn to your questions for the remaining time. Only validated stockholders may ask questions in the designated field on the web portal. Out of consideration for others, please limit yourself to one question. Please note that no one attending via the webcast is permitted to use any audio recording device.
Thank you for your cooperation. With that, we will now proceed with the formal business of the meeting as described in the notice of annual meeting and the proxy statement. I'll hand it over to Terri Whittemann, our General Counsel and Secretary, to review the legal documentation and presence of a quorum.
Thank you, Seth. I have the proof required by Delaware law and our bylaws that the notice of annual meeting, the proxy statement, the proxy card and the annual report for the fiscal year 2019, together with a letter from our Founder, President and CEO, were mailed to stockholders commencing on April 10, 2020. The Board established March 23, 2020 as the record date for entitlement to receive notice of and to vote at this meeting. As of the record date, there were 61,848,543 shares of common stock issued and outstanding. The list of registered holders of our common stock is available for inspection on the web portal.
Under the company's bylaws, a quorum is present when at least a majority of the voting power of the issued and outstanding shares of capital stock companies entitled to vote at the meeting is present in person represented by proxy at the meeting. The Inspector of Election has since sworn in and I have closed the office. The Inspector has informed me that a forum is present. I will now turn it back over to Seth for the items of business.
Thank you, Terry. With the confirmation that a quorum is present, we will proceed with the business of the meeting. First, we will address the items being presented to stockholders for a vote
at this
meeting. As described in the proxy materials, there are 2 proposals to be considered and the Board of Directors has recommended that stockholders vote in favor of all proposals. No other matters will be considered. Following the voting, I will report the preliminary voting results from the Inspector of Election and then the meeting will adjourn. The polls open today, May 21, 2020 at 9 am Pacific Time for voting on all matters before the meeting.
Many of you have already mailed or otherwise delivered your proxy card and therefore intend to have your shares voted by the proxies. If you have not already voted and wish to vote, the polls will remain open until we announce closing of the polls. If you have provided your proxy card, your shares will be voted in accordance with your instructions. Any stockholder who has not yet voted or wishes to change their vote may do so by clicking on the Vote Here button on the web portal and following the instructions there. Stockholders who have sent in proxies or voted via telephone, Internet or mobile device and do not want to change their vote do not need to take any further action.
The first matter is the nomination of candidates for election as directors. Pursuant to the company's certification of incorporation and bylaws, the company's Board of Directors is divided into 3 classes with each class of directors being elected over every 3 years. At this meeting, myself Seth Goldman, Christopher Isaac Biz Stone and Kathy Waller have been nominated as Class 1 Directors of the company to serve until the 2023 Annual Meeting of Stockholders and until their respective successors have been duly elected and qualified. The Board of Directors has unanimously recommended that the stockholders vote for each of Seth Goldman, Christopher Isaac Bizstone and Kathy Waller as Directors of the company to serve and hold office until the 2023 Annual Meeting of Stockholders and until their respective successors have been duly elected and qualified. The second matter presented for a vote is the proposal to ratify the appointment of Deloitte and Touche LLP as the company's independent registered public accounting firm for the 2020 fiscal year.
The Board of Directors had unanimously recommended that the stockholders vote for the ratification of the appointment of Deloitte and Touche LLP as the company's independent registered public accounting firm for the 2020 fiscal year. We will pause for another moment to allow for any votes to be completed online. Again, if you have provided your proxy card, your shares will be voted in accordance with your instructions. Any stockholder who has not yet voted or wishes to change their vote may do so by clicking on the Vote Here button on the web portal. The polls are now closed at 9:0:8 am Pacific Time, May 21, 2020 and the Inspector of Election will tabulate the votes.
The next item on the agenda is the preliminary report of the Inspector of Election. Any votes cast before the polls close, but not reflected in the preliminary report will be reflected in the final report of the Inspector of Election, which will be affixed to the minutes of the meeting. The Inspector of Election will prepare the final report and certification of the Inspector of Election once all votes are tallied and the results will be detailed in our current report on Form 8 ks, which we will file with the Securities and Exchange Commission. Based on the preliminary report of the Inspector of Election, each of Seth Goldman, Christopher Isaac Bizstone and Kathy Waller are duly elected directors of the company to serve and hold office until the 2023 Annual Meeting of Stockholders and until their respective successors have been duly elected and qualified. The appointment of Deloitte and Touche LLP as the company's independent registered public accounting firm for the 2020 fiscal year has been approved and ratified.
That concludes the formal business to be brought before this meeting and the stockholders meeting is now adjourned. At this time, I would like to invite Ethan Brown, our Founder, President, CEO and member of the Board of Directors to make a few remarks regarding the company and our business.
Thank you, Seth. Welcome to Beyond Meat's 1st Annual Stockholders Meeting. Roughly 3 weeks ago, we completed our 1st year as public company, and I'm pleased to be able to share with you the progress we've made as well as provide perspective on the exciting path ahead. Before I get into our recent performance, for the benefit of those who may be newer to our story, I'd like to briefly explain who we are as a company and how we think about our long term mission and opportunity. I want to remind everyone that during my remarks, I may make forward looking statements within the meaning of federal security laws.
These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ from those described in these forward looking statements. Please refer to the company's annual report on Form 10 ks for the year ended December 31, 2019, filed with the SEC on March 19, 2020, the company's quarterly report on Form 10Q for the quarter ended March 28, 2020 filed with the SEC on May 12, 2020 and other filings with the SEC for a detailed discussion of the risks could cause actual results to differ from those expressed or implied in any forward looking statements made today. I may also reference certain non GAAP financial measures. Please refer to our recent SEC filings for a reconciliation of such non GAAP metrics to the most directly comparable GAAP measures. We started Beyond Meat in 2,009 with a simple observation that you can understand meat both in terms of its animal origin its composition.
By focusing on the latter, the composition of meat versus insisting that meat must come from an animal, we open wide swaths of innovation through which we believe we can summon the future of protein. Here's why. It turns out that meat at a very high level is an assembly of amino acids, lipids, trace minerals, vitamins and water. We've developed a scientific and technological understanding as well as infrastructure over the past decade to assemble these core components into the architecture of meat, drawing directly from plant based sources and bypassing the animal. We do this with strict guardrails in terms of the ingredients we use and with humility that recognizes that we have miles left to travel before building meat directly from plants perfectly.
Among other guardrails, we do not allow the use of genetically modified organisms or GMOs nor any artificial ingredients. And though we are extremely proud of our products, we realize that our innovation programs countless iterations are ultimately part of a longer year over year march toward providing products across beef, pork and poultry that are indistinguishable from their animal protein equivalents. As we continue along our path, we remain highly motivated by what we consider to be unique 1 to 4 ratio. Specifically, by applying a singular focus on changing the source of meat at the center of our plates from animals to plants, we can be of service to human health, climate change mitigation, natural resource conservation and animal welfare. We believe that a growing number of consumers are making distinctions across protein choices that touch on 1, some or all of these considerations.
In this context, we see our work as enabling consumers to eat what you love, that is to enjoy continuing the experience of delicious and satiating center of the plate protein, but to do so with plant versus animal based meats. We call our innovation center the Manhattan Beach Project. This name was chosen to evoke the spirit of the Manhattan Project during the 2nd World War, which brought together the best and brightest scientists and engineers along with managers, aligning them around a clear and compelling goal and appropriately resourcing them to deliver significant innovation under tight deadlines. In this vein, we view Beyond Meat as an innovation engine at its core with innovation serving as a key differentiator and competitive advantage for our company. Our internal Beyond Meat Rapid and Relentless Innovation program is intended to intensely drive innovation with a sense of urgency and investment that's commensurate with the global economic opportunity and societal challenges that we are chasing.
We consider innovation broadly. In our products, we seek to constantly close the gap between our plant based meats and their animal protein equivalent. In our technology platforms, we are not dogmatic about a given approach. We actively search for that which will carry us faster toward a perfect build of meat and plants. More generally, we expect to continue to invest disproportionately more than our food industry peers in innovation as a percent of net revenue to us continue to stretch our lead within the global movement toward plant based foods.
Now turning to our recent performance. In 2019, we continue to build a strong foundation for future growth through investments in aforementioned innovation, as well as production and market share initiatives, while generating record net revenues of 298,000,000 dollars an increase of 2 39% compared to 2018. We maintained solid momentum to 2020 with Q1 net revenues up 141% year over year despite an increasingly challenging environment in the latter portion of the quarter stemming from the COVID-nineteen global health crisis. Our performance continues to be driven by strong distribution growth both domestically and abroad. As I've said previously, within the halls of Beyond Meat, there is a palpable sense that we're only just getting started toward the global opportunity to reshape a $1,400,000,000,000 industry.
One way to look at this is to consider our household penetration in the United States. Despite the strong traction we are experiencing, as of the beginning of the year, we stood at only 3.6% total household penetration in the U. S. Globally, we are just scratching the surface of the economies that we have entered. And what is a meaningful and rare trend as our household penetration to number increase, we are also seeing an increase in something called the buyer rate.
That is each of the households are on average also buying more Beyond Meat products. More generally and reflecting this convergence of favorable trends, even as we are growing market share, our velocity or sales per point of distribution in retail stores continues to increase. This momentum inspires us to work even harder to deliver to consumers through our rapid and relentless innovation program, delicious and satiating center of the plate protein that enables them to eat what you love while accessing the benefits of plant based foods. Taking a closer look at the drivers of our recent performance, we are pleased with the strength both broad based across our domestic retail and foodservice businesses as well as our international business. While our foodservice partners both in the U.
S. Abroad have experienced a recent deterioration due to COVID-nineteen, we see this as a temporary rather than structural disruption and our dual pronged approach of expanding availability of Beyond Meat Products to both retail and foodservice outlets has served us well as increasing demand has partially offset recent weakness in foodservice. Along these lines, as we shared, as the COVID-nineteen pandemic took hold, we implemented a series of offensive measures designed to reroute to the consumer as well as repurpose certain assets to adapt to their new buying patterns as consumers increased reliance on retail and food delivery versus frequenting restaurants. We also reached out to each of our major quick serve restaurant partners and asked a simple but important question, how can we help? The list of brands we've been fortunate to partner with in just the past year and a half, including among others, A and W, Carl's Jr, Denny's, Dunkin', Del Taco, Hardee's, KFC, McDonald's, Starbucks, Subway, Sheetz and TGI Fridays serves as a testament to the broad and mainstream nature of the plant based movement and the leadership role of Beyond Meat within it.
We cherish these in all of our foodservice relationships and are willing to invest in them today to demonstrate our commitment to being of service to our partners over the long run through thick and thin. Other notable highlights that speak to the meaningful momentum we've built since our recent IPO include the commercialization of new and enhanced product offerings, on boarding of our first two co manufacturing partners outside of the United States, and most recently our first foray into Mainland China through our partnership with Starbucks. April 22 launch of Beyond beef items at Starbucks throughout China represents an important milestone for Beyond Meat. It has long been our aspiration to be a global protein company and being of service to the growing demand for high quality protein in China is a key part of this strategy. To emphasize our commitment to the Chinese market, we also finalized a distribution agreement with Synodis, a leading local distributor in China to unlock a network of distribution opportunities across retail and food service.
In addition, we've established a Chinese website as well as branded Weibo and WeChat accounts in order to engage with the Chinese consumer and support the brand's introduction in this important market. Finally, we remain committed to our goal of establishing a production footprint in Asia before the end of 2020, pending further developments with the COVID-nineteen pandemic. Before I wrap up, I want to briefly comment on some key financial achievements that highlight the strength of our business model. Q1 2020, in addition to reporting a 141% year over year increase in net revenues, we also achieved our best ever quarterly cost of goods sold per pound at $3.57 As I mentioned earlier, a key part of our long term strategy is to underprice animal protein in 1 or more of our segments of beef, pork and poultry in the next 4 years. And This continued progress on our unit production cost bodes well for our timely attainment of this critically important goal.
Specifically, we are highly focused on weighing cost out of our production processes, maturing our supply chain, realizing operating leverage as we scale and otherwise costing down products so that we can offer an important trinity of benefits to the consumer, specifically plant based meat that is indistinguishable from its animal protein equivalent in taste, texture and appearance that delivers nutritional wins in protein and other nutrients, while eliminating or reducing that which is a concern in animal protein. And 3, that is less expensive than animal protein. We believe that delivering these three benefits, taste, nutrition and over time lower price will significantly quicken our penetration of the $1,400,000,000,000 global meat industry. This summer, you will see us lean into aggressive pricing in the form of new value packs of 10 burgers, the intention of which is to drive trial during periods of shortages in the meat industry and higher than normal pricing, specifically in animal based beef. As the slide indicates, we are pleased to share that we continue to grow our revenues across all portions of our business, including our U.
S. International, retail and foodservice businesses. This balanced approach has also helped us to react to and navigate the COVID-nineteen disruption to our business, taking early measures to reroute distribution and repurpose production equipment in an effort to meet the consumer where they are during this period. And we are highly encouraged by the continued operating expense leverage we've been able to achieve despite expanding our organization to seed and support growth as well as handle new requirements associated with being a public company. More generally, we believe that the combination of strong year over year growth coupled with cost down efforts and overall leverage as we scale should drive considerable value for our shareholders, while positioning us to advance the 1 to 4 ratio that is the cornerstone of our business, delivering to the consumer, center of the plate protein that advances human health, climate, natural resource and animal welfare objectives.
At this time, will now answer questions from stockholders. We can begin with those questions that were received in advance of today's meetings. We will then take shareholders' questions that are being entered today on the web portal as time permits. Please note that we will attempt to answer as many questions as time allows, but only questions that are remaining to the meeting and submitted in accordance with the rules and procedures of the conduct of the meeting should be addressed. Louie, can you please read the first question?
Sure. Thanks Ethan. We received a number of questions from shareholders related to COVID-nineteen. So maybe we can start with the following questions. First, what has the company done so far in response to COVID-nineteen?
And second, what actions are we taking to mitigate risk further or to take advantage of potential opportunities that have arisen as a result of this situation?
Sure. That's a great question. So as I've spoken about in other settings, we have taken enormous efforts within the company to protect our workforce and all of our employees throughout the company and in our co manufacturing facilities as well. I'd like to call out the work of 2 women on our leadership team, Carrie So to, who is our Chief People Officer and Kelly Wilson, who is our Senior Vice President of Quality. These women have been remarkable in getting ahead of COVID-nineteen very early in its occurrence, setting up a task force to navigate safely and steward us safely through this issue.
We have not had any COVID-nineteen related interruptions in our own production facilities. And so we began this process with the task force that we have brought in a faculty member from UCLA who is an expert in disease, infectious disease and began putting together a series of steps to guard against the pandemic. We closed our headquarters. We began having employees work remotely. For any essential activities, our Manhattan Beach Project Laboratory, we strictly limited the number of employees that were allowed to enter the building, began prohibiting outside visitors and we suspended travel.
We also implemented strict physical distancing protocols and implemented comprehensive preventative hygienic measures throughout all of our facilities including production in Columbia, Missouri. We also modified our PTO requirements temporarily so that employees did not have to deduct sick time for their PTO if they're feeling unwell. As you look to the business risk mitigation, we feel comfortable around the number of suppliers that we have from parts of the world. So we don't see interruption occurring based on that. We also took efforts to shore up our balance sheet and continue to strengthen that as the credit facility suggests.
But we also looked at this as how do we reroute and repurpose to the consumer. This was something that was really important to me. I didn't want this to, as any business would, impact our upward growth trajectory. So we took very swift measures to be able to reroute to the consumer and repurpose our equipment to make it as relevant as possible for the marketplace. So we began switching foodservice production lines over to retail.
We developed value packs for retailers to take advantage of the fact that this summer we're going to see meat shortages as well as very high pricing and to make sure that we're providing high quality protein percent of the plate for not only families here in the United States, but also in Europe at a time when people are going to be under particular pricing pressure. We also launched something that I think is really important in terms of our brand ethos, which is the Feed a 1,000,000 campaign. This allowed us to communicate our brand ethics throughout this crisis. We gave over well over a 1000000 products away and worked with a wonderful family of celebrity and athletes, ambassadors that we have, both investors and friends, and just very touched by their willingness to lean in. And that I think communicated who we are as a brand throughout this difficult period.
I think that's about it.
Thanks. Sticking with the topic of COVID-nineteen, another question is, does the company have enough capacity to meet increased demand during this period when the animal protein supply chain is experiencing major disruptions and shortages?
We do. On recent earnings calls, we did share we have about $700,000,000 in gross revenue capacity already in place, and we've had a goal for the year of we would have $1,000,000,000 in gross revenue capacity in place by the end of the year, and we'll get that. We feel very comfortable about that. We're also repurposing lines, as I mentioned, from foodservice to retail. And that's been paying.
It will be very interesting this summer to see the consumer reaction to lower pricing from us in the form of this retail pack. It's my hope that we can get that product on as many tables as possible throughout the United States and then ultimately in Europe and begin to lean in and kind of hold our breath toward this goal of being able to be price competitive with animal protein.
So we also received several questions related to our marketing strategy and specific marketing initiatives we're pursuing. First question along that line is, does the company have marketing or educational campaigns focusing on the need to reduce or eliminate animal factory farming potentially as a measure to reduce pandemic risk going forward?
I've read a lot about this subject and I'm very personally interested in it. But I think our approach in all of these matters is to stick to what we do best, which is to make really high quality plant based beef for the center of the plate. I think others can call attention to the issues around production processes and which ones are more favorable for the spread of infectious disease and which ones aren't. But it's really not our place to comment on that or use that in any way. We feel for the companies that are going through, employees that are going through some of these sicknesses.
And for us, the most important thing is continue to provide really high quality, great tasting plant based meat for the tender plate.
Thanks. And in a similar vein, the next question is, is the company doing anything in terms of political engagements to advocate for agricultural reforms such as subsidy restructuring? And related to that, has the company considered marketing to farming associations that might benefit from converting animal agriculture to non animal farming?
I love the second part of that question. The first part, we have a great relationship with the consumer and as much as I'd love to see an even playing field, we're not spending a lot of time on that, but we engage the consumer and the extent that the government can create a level playing field, that's great, but we're not going to wait around for it. With respect to the farmer, you guys know how passionate I am about this subject. I believe that the technology that we have and the approach we have, which is to build a piece of meat directly from plants is one of the biggest technological advances that we can bring to American agriculture and agriculture around the world that will allow farmers to make more rather than less money. And overall, I think this will be a massive win for farmers.
There will be winners and losers, but anyone who has land that can grow crops will be can benefit from this trend. And so you're seeing that occur in the United States and it gives me a lot of hope where folks are planting more legumes. They're converting some feed crop land over into growing protein directly for human consumption, which I think is really the right thing to do for the planet and for so many reasons. And so I think that over time you'll see this story unfold and you've heard me speak about it before. The digital economy did a lot for urban centers, created enormous wealth over the last 30 years that didn't help that much in the agricultural communities.
And so many of those communities are struggling. I think this is an opportunity to bring equivalent technological change into those communities and help them make more money and strengthen the fabric of their communities. So I'm excited to try to do that in the next several years.
Thank you.
Switching gears to the topic of sustainability, a shareholder asks, how are you planning to become more socially and environmentally sustainable? Do you have an office of environmental sustainability? And have you considered recruiting someone from the environmental community to serve on the Board?
That's a great question. We have a lot of environmentally minded folks in the company and on the Board who I think joined me in wanting our company to be a leader in not only the products that we produce, right, but how we produce them and the footprint that we have. And so first, our mission is so vital in this regard. If you look at what we did with the University of Michigan, when we compare the production process for the Beyond Burger to that of a typical beef burger from an animal. And we're using 99% less water, we're using 93% less land, emitting 90% fewer greenhouse gas emissions and using about half the energy.
So on a product basis, we feel very good about that, but there are a lot of things that we can do better and you'll see us do that over the next several years. Our packaging continues to be something that we need to improve. We recently made some changes in our burger packaging to a translucent form of plastic that is much more widely accepted in recycling. So I was happy to see that. We're also looking very hard at greenhouse gas emission analysis for the company more broadly and implementing ways to reduce our own greenhouse gas emission across the company.
So it's something we have to lead in given the ethos of our company and who we are and we have to get better at and we will do that. But I think right now we're doing pretty well.
Thanks. So we received a few questions from shareholders wanting to know how we think about executive compensation and other governance questions in general. So in particular, someone asked why executives paid so much when the company is not profitable?
Yes. So this is a this gets back to the discussions that we had around the Manhattan Beach project and why do we call it that. And you need to attract the very best and very brightest people if you're going to lead a movement like this and if you're going to attack a global problem like this, right. And so bringing together the best in class team at every level of the company has been a goal that I've had for a very long time. And so you have to be competitive in the market to do that, and we've done that, and I'm okay with it.
It's something that will allow us to achieve the goals that we have to achieve. If you look at what we're trying to solve for around making food an answer for climate and human health and natural resources and welfare, those are big, big problems. And so why would you want to cut costs on the people that you're bringing in to try to solve those problems? They're big enough to care and to give the right amount of compensation for.
Thanks. And a similarly vein, can you confirm that you are committed to offering generous living wages to all of your workers?
Yes. A lot of them have been with us for a long time. So we absolutely do feel really comfortable about that and we'll continue to look at that and continue to make adjustments so that we are competitive in that regard. Where our facilities are, there are other food manufacturing facilities around. And so we always need to be competitive.
But even if they weren't, we would be. That's part of who we are.
Thanks. What actions has the company taken and what policies are in place to support a more diverse workforce and board, including minority representation?
No, that's a great question as well. I think we do have a diverse workforce today. It's something that we're always focused on. If you look at the composition of our Board and our executive team, it's something that we do place a priority on. And so we will always continue to do that and including how we recruit and the recruiters that we use.
Thanks. And lastly on corporate governance, is there a plan to recruit more women to the Board?
We have no immediate plans to expand the size of our Board. But as you can tell from its composition, it's an important element that we have diversity on our Board. And so as we consider each new position on the Board as folks cycle off, that is a major point of focus for us.
Thanks, Ethan. So switching gears, there were some questions around our expansion plans in Asia. Specifically, one question is what progress has been made in terms of the company's planned expansion in Asia and in China in particular?
I could not be more excited about this part of the world, and I'd be there right now if it weren't for this COVID-nineteen issue. I can't wait to get over there. We are very focused on it, had some terrific support throughout the company in terms of getting up and running there with Starbucks. It's a big win for us, but much more to follow. We're committed to continuing to try to do everything we can in the situation with COVID to get our facilities up and running there by the end of the year.
And we've hired a GM there, which has been she's just been terrific. I have a great senior advisor who's been working with us for some time now to set up the proper infrastructure there. So we have invested a lot and we'll continue to invest a lot in China in terms of energy and focus and then ultimately resources.
Thank you. Another question, why don't you have products made with organic pea protein?
Yes. So I think and I've said this for many years, you can't serve too many masters. And our goal has been to within the guardrails we've established, which is to use nothing artificial, to use no GMOs, to provide all natural plant based meats to the consumer at a price point that's relevant. And I'm so focused on getting this product to be relevant to all members of our society at all income levels I think that burdening that right now would be a restriction that has to be organic would take us take our eye off the ball. So over time, I could see absolutely us offering a higher end organic version of our product.
But today, we've got a really big goal ahead of us that we're trying to satisfy, which is mainstream adoption and distribution of this product. So we're going to stay where we are.
Thank you. Next question, what is the latest update with McDonald's?
So just like a favorite question of analysts and my answer is unfortunately always the same. The cadence and outcome in each of these large as McDonald's, KFC, etcetera is really something they're going to determine. And for me to comment on it further, it would just complicate our relationship. So I'll just leave it at that.
Is there a plan to sell and distribute Beyond Meat products in Mexico?
Yes, absolutely. I mean, our plan is to be relevant to any economy that wants us. And certainly, we do get interest from Mexico. So see us over time have a presence there and look forward to that.
Next question, have you considered selling product at cost to hospitals or military locations where debt is needed and might be in shortage at this time? What we
have done is given away product through the Feed a 1000000 campaign and so we'll continue to be of service community in ways like that. We haven't considered selling at cost, but I think this charitable campaign we have speaks to our interest in that area.
Thank you. We have a question asking for an update on the lawsuit.
Yes. So I think what's right now what we can say is that there's no active litigation, but we do this is something that we can't comment on because of the active litigation, but we do intend to defend vigorously against it. And given the other kind of guardrails on that, that's about all I should say.
Will shareholder commitment be recognized with a more favorable dividend?
Yes, not at this time, no.
Next question, why haven't I seen any advertising of Beyond Meat on YouTube or Connected TV during the pandemic when consumers' watch time is presumably up?
I think that was a judgment call on our part. We really focused on the Skeet A 1000000 campaign, and there's been really good media coverage of that. I for one feel that there's something else the American consumer needed and the global consumer needed which was to not be marketed to during this period. And I think we stayed true to that. We did what we thought was right at the time.
We out to all of our quick serve restaurant partners and asked them how we can help. We mobilized our family of ambassadors and they mobilized us. Frankly, they got so engaged in this. It was terrific. We felt that was the right tenor to strike during the darkest days of this pandemic versus any direct marketing and advertising.
Have the company considered marketing to university and other school systems? What about hotels?
Yes, Stahl. We actually do actively work with universities and school systems to great way to get early traction and get a lot of interest from universities and university students. So yes, that's a big, big part of our program and hotels as well. We do have product currently in hotels, Hyatt and others, and we'll continue to do that.
Thanks, Ethan. So we'll switch to some questions that we received live. So first question is how will fried chicken roll out on the international versus the U. S?
Yes. I'm as eager as you are for that. I had some the other day and it was just absolutely outstanding, delicious. And I can't comment further on it.
Okay. What is your most important international market? Where do we have subsidiaries?
Yes. So I think the most important ones are the ones we've heard you speak about quite a bit, EU and Asia. And we currently have subsidiaries in the Netherlands and China, but you'll see us continue to grow our global footprint.
Thank you. Next question, is Beyond Meat offering COVID-nineteen testing for employees?
So at our facilities, we do a lot of monitoring of things like temperature and things of that nature. We because we're working remotely for any non essential on-site tasks. We haven't implemented that, but we are very, very careful. As I mentioned, working with this epidemiologist from UCLA, implementing extremely aggressive measures, and we're very proud of the fact that there's been no COVID related interruptions at our production facilities.
Okay. Next question, are there any issues using the term meat in your products?
We do get challenges at the state legislature level and there's issues around some federal work in that area. But I think it's a thing that we're willing to fall on our sword for. It's really important to us. It gets back to the fundamental belief system within the company that meat is a known entity. It's a material.
It doesn't have to come from an animal. We understand the composition. And again, if you think about what's happening, the animal is consuming a lot of plant material and a lot of water and they're using an digestive system, their skeletal muscular system to form muscle which is then harvested as meat. But those amino acids, those fats, etcetera, those are all present in plants and we're taking those and we're organizing them against literally effort to try to restrict us from calling that, it will only help us because people don't want to be told how to refer to products and people are really, I think, getting behind the notion that you can build meat from something other than an animal.
Thanks.
Why did we discontinue beyond Chicken Strip?
Yes, so there are a lot of reasons behind that around production and streamlining our production process. But I think the one that probably rings the most substantial for me is around the idea that we're constantly improving our products and because we lean so heavily into beef and pork after initially launching our chicken product, we felt that we hadn't done the improvement we wanted to do on our chicken products. We took it off the market to be able to improve it, but it was a combination of production factors and needing to streamline and then desire to take that back into the Manhattan Beach project, improve it and bring it back out. And we're really excited to bring it back out.
Next question. When will Beyond Bacon launch?
On a zeker as you, but we can't share that date. It's something that's continuing to evolve as we make iterations toward the final product.
Next question is around our taste test program. What happened to it?
Yes. I mean we're always doing a ton of tasting and efforts to get consumers and others to give us feedback. We do CLTs, which are basically controlled tastings done by external groups. But we've come a long way. I can tell you our first tasting ever in the company.
We blindfolded an electrician in our first factory and had him taste our chicken versus I think it was Foster Farms. And when he said he couldn't tell the difference, we launched the product. We're much more sophisticated today and we've got a lot more taste test. But yes, so we continue to do that.
How can we lower sodium and eliminate potassium chloride from our product?
That's just part of an overall commitment to continue to get better. We are constantly seeking to simplify our ingredients and keep what we think is great nutrients in and strip out those things that are in animal protein that aren't helpful for the human body. But we don't have any particular insights we can share today. I mean the sodium issue, I think is also about education. If you look at the amount of sodium in our product, it's 16%, I think, in the Beyond Burger roughly, not 61%, right, 16%.
There's so many things like a half a cup of marinara sauce as that. It's something that I think the incumbent industry is using to maybe position against us. But if you think about it, what's being done is people comparing 16% of daily value of the sodium in the Beyond Burger against an unseasoned beef burger, right? But that's not really a fair comparison, it's not apples to apples, right? People season their burgers, right?
And so we compare favorably when you compare a seasoned burger versus ours because ours is already seasoned.
When will chicken launch in retail?
So we can't give you a firm date, but it's coming, it's coming. And I'm very excited about it, it's a good product.
Thanks. What is your policy towards hiring people with disabilities?
Yes, we're interested in diversity across our entire workforce. And so we certainly are aggressive in terms of trying to have a population that's representative of the population in the countries and communities that we're working in. So I'd say it's much like the diversity we seek in other aspects. It's something we do seek out and feel strongly about. Thanks.
Can the company vertical farm its ingredients?
That's really a supply chain question, and I think I don't see it being cost effective.
What other forms of meat is the company considering?
I think right now, we're highly focused on that core beef, pork and poultry. It's such a massive opportunity for us, and we have so much research that's been done over the last 11 years and we're continuing to do that. That's a pretty good right now point of focus for us.
When and where can Canadians get beyond sausage?
Yes, we're just launching and so it's exciting. It's up there now. So I would check your favorite retailers, Sobeys, etcetera.
Okay. And lastly, how will Beyond Meat remain competitive against new plant based competitors?
I mean, this is one of my favorite subjects. We have a lot of competition that's come in. We've been warned for years now that these big incumbents are going to come in our lunch. And what we do is we work extremely fast to iterate and to get better and better. And there's intellectual property, there's patents you can hide behind, there's trade secrets, but none of that is as important as the ethos that you have around constantly improving.
And so this is not a place that rests on any one product. There's nobody in the world that wants to replace the products on the shelf that have Beyond Meat's name on them more than we do. We want to replace them with better versions because we have them in our research facilities today. So we put some guardrails on, as I mentioned in the past. We use only natural ingredients.
We use nothing artificial, no GMOs. That does make a job harder. But I think the rate at which we're improving speaks itself. And for competitors out there that want to take some of our market share, we feel really comfortable about where we are. Our goal is really around that $1,400,000,000,000 beat industry and focus on how much of that market we can capture.
Great. Thank you. We see no further questions at this time. So that will conclude our question and answer session. Thank you for your participation.
I'll turn the meeting back over to Ethan for closing remarks.
Thanks, Louie. So as noted in my remarks, our brand commitments, eat what you love, represents a strong belief that by eating our plant based meats, consumers can enjoy more, not less of their favorite meals. And by doing so, they can help address concerns related to human health, climate change, resource conservation and animal welfare. We believe this is an opportunity and time for us now to be aggressive in offering the consumer expanded protein options, and we remain steadfastly committed to constructing the building blocks today that are necessary to become the global plant based protein company we envision for tomorrow. Thank you all for attending our 2020 Annual Meeting of Stockholders and thank you for your continued interest and support of our brand.
Thank you all for attending our 2020 Annual Meeting of Stockholmes and thank you for your continued interest and commitment to our brand. This concludes today's call.