(Reuters) - Vegan burger maker Beyond Meat Inc said on Tuesday it would begin making its plant-based meats in Europe next year, in an effort to expand production outside the United States.
Shares of the Los Angeles-based company, which has actor Leonardo DiCaprio and Microsoft founder Bill Gates among its investors, rose more than 7% after J.P. Morgan called the company's potential for growth "extraordinary".
The growth opportunities for Beyond Meat come from younger, health-conscious consumers choosing vegan or vegetarian diets, resulting in a surge in popularity for plant-based meat substitutes from companies like Beyond Meat and its main rival Impossible Foods.
The two companies are competing to get their versions of vegan burgers in North American fast food chains, with Beyond Meat supplying Tim Hortons and Carl Jr., while Burger King sells Impossible Food's patty in its Whopper sandwich.
Beyond Meat's new production facility in the Netherlands, set up by meat distributor Zandbergen, will give it an edge over its competitors in Europe where the market for vegan "meats" is even younger than the United States.
"Localized production is expected to reduce the brand's transportation footprint, while increasing the speed in which Beyond Meat can get products to customers across Europe," the company said.
J.P. Morgan analyst Ken Goldman estimated the total addressable market for plant-based meat to be worth $100 billion in 15 years, with Beyond Meat taking a 5% share.
Goldman said Beyond Meat's annual sales could ultimately exceed $5 billion, compared with $88 million last year, and expects the company to partner with at least one more major fast-food chain by the end of 2019.
Beyond Meat, whose shares have now risen 85% since their market debut earlier this month, partnered with Zandbergen to distribute its products in restaurants and retailers across Europe last year.
(Reporting by Uday Sampath in Bengaluru; Editing by James Emmanuel)