Beyond Meat: How the plant-based CEO leads an uphill battle
Ethan Brown is one of the leaders taking on the meat industry, as Founder and CEO of Beyond Meat (BYND). Brown has managed to make deals with brands like Target (TGT) and Dunkin Donuts, and in May of 2019 he took the company public as part of the plant-based meat boom.
Brown invited Yahoo Finance Executive Editor Brian Sozzi to Beyond Meat headquarters in El Segundo, CA to share insights on what it takes to lead the company through the challenges of competing in the meat industry and the qualities that keep him going, like building a trustworthy team, focusing on the company’s true mission of changing how consumers consume meat, and embracing failure along the way.
“We have to figure out how to get people comfortable with quick iteration, quick failure, and then quick recovery,” says Brown. “It’s a big part of our culture.”
Beyond Meat is not the only brand in the plant-based meat space, with many competitors, including Nomad (NOMD) and Impossible Foods. Traditional meat companies, like Tyson (TSN) and Cargill, are also adding plant-based meat offerings. Brown is aware of this reality and leads to create a sense of urgency within the company.
“There's always somebody that's working really hard,” Brown says. “If it doesn't motivate you enough to just bring this goodness to the world, you know, competition can also motivate you.”
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Video Transcript
ETHAN BROWN: People can say what they want, but we just keep doing the work. You just keep repeating and envisioning that and helping the team to see that. You can get through almost anything.
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BRIAN SOZZI: Beyond Meat and its CEO Ethan Brown burst onto the scene with a sizzling IPO at the NASDAQ on May 2, 2019. The company's market valuation quickly surpassed $14 billion, as seemingly everyone was excited about the future of plant-based meat. There were deals with Target, Dunkin' Donuts, you name it, everyone wanted a piece of Beyond Meat.
ETHAN BROWN: Every reason that we started this company and every reason that the consumers are reaching for a product, strengthens every single day. It's hard not to be passionate about it because you can help so many people. We know that people love animal protein, right?
And so if we can create that directly from plants in a way that eliminates the animal, get the taste exactly right, make sure that people understand the health benefits, and the third is get the price to the point where it is at parity or below that of animal protein. This transition will occur, and it will start to occur more quickly.
BRIAN SOZZI: Brown's vision was dealt a serious setback during the COVID-19 pandemic. As a result, Beyond Meat's stock price took a big hit.
ETHAN BROWN: We expected it to be pushed back, but just seeing it happen and being on the receiving end of it has been eye-opening.
BRIAN SOZZI: Despite everything that has gone on with the company, how have you stayed centered?
ETHAN BROWN: I appreciate that question. One, I have a great core team of people around me. We're trying to do something that is not going to happen overnight, that has fits and starts. We're going to make this thing into the long-term success that we've been after. I would be dishonest if I said, it hasn't been difficult. There have been challenges. But there's been more reward than there have been challenges. There's been more opportunity to impact change than not. And if you look at this from a historical perspective, you should expect this.
BRIAN SOZZI: Why is it so hard to change consumer mindsets?
ETHAN BROWN: I think this is something that unlike, let's say, shifting from the fax machine to digital communication, to the landline, to the mobile phone, we're not trying to change something that has just been around for a couple hundred years.
Now, the way to think about it in my mind, though, is to not change it. Is to simply change the material, right? So provide the consumer with that delicious whole muscle steak, provide the consumer with the burger, provide the consumer with sausage, and it's just a different source of the protein. That's it.
BRIAN SOZZI: How have you dealt with some of those challenges from your perspective as a leader, not just as a CEO, as the founder?
ETHAN BROWN: I think it gets back to who you surround yourself with. And whether it's my team here or my board. My board has been incredibly supportive of this effort. They have a-- they're seasoned enough to have a long-term view.
I think the other piece is organizationally, I've gotten to really embrace the horizontal flow of value through an organization. If you think about the way we've set up businesses and we think of organizations in general, is always vertical. We've got the sales, marketing, operations, finance team, et cetera.
But that's not the way value flows. The value flows from product ideation all the way through to the consumer. So it's really horizontal. And so from a leadership perspective, it's really how do you teach people to think about the team as one single team and not as a department. This is really the lean style of management. And it's the lean management principles. And that is really the right way to run a business.
BRIAN SOZZI: In 2021, Beyond Meat opened a sprawling 288,000 square-foot headquarters in a former aircraft hangar in El Segundo, California. The location is outfitted with a state of the art test kitchen that may foster the next big thing in plant-based food.
Eating this stuff looks really good. I watched it being cooked. It grills like steak.
ETHAN BROWN: I love this product, and it really starts with what were talking about earlier about at the farmer level. So this is made from fava beans, which are being grown in North Dakota. Fava beans fixed nitrogen back into the soil, so the farmer is able to use less fertilizer, which means they're able to make more money with each acre, right? So there's no animal in this entire process.
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BRIAN SOZZI: Is your mindset still-- and I think we talked about this in the past-- to fail fast and fail often.
ETHAN BROWN: Absolutely. So our program, our innovation program-- the Beyond Meat rapid and relentless innovation program-- that's at the center, is that we're going to move more quickly than anybody else, and we're going to fail and recover more quickly, right?
And I think one of the challenges, of particularly young people have, is they're being dealt perhaps their first failure, right? And so many of the people that work here are coming out of really great academic backgrounds. And so it takes them a moment to realize that not delivering on something is not the end of the world, as long as they get back up and fix, right?
And so we have to figure out how to get people comfortable with quick iteration, quick failure, and then quick recovery. And so it's a big part of our culture.
BRIAN SOZZI: So, Ethan, as someone dealing with these big leadership challenges, tell us about your style. How do you rally the troops and how do you get out the message that you're trying to change a category that is well established? It's meat. You're going up against big meat.
ETHAN BROWN: Yeah. We talk about this every day. I mean, first and foremost, is the true north. And that's what most leaders will have the team focus on. And so if we stay true to that true north, which in our case is to provide a plant-based meat that is indistinguishable from animal protein, do that at a price that everyone can pay, you just keep repeating and envisioning that and helping the team to see that, you can get through almost anything.
BRIAN SOZZI: So, Ethan, you see this upstart industry-- lab-grown meat-- it's out there. It's taking form. As a founder and a leader who have a company that does it differently, does that change how you lead Beyond Meat?
ETHAN BROWN: The moment you walk in this building, you should feel a sense of urgency. Whether or not it's in-vitro meats or some other technology, you know, you're always going to be acting with a sense of urgency. In fact, I have--
BRIAN SOZZI: I wanted to ask you about that. It says, "Somewhere, someone is working harder on your idea than you are." Does that still power you today?
ETHAN BROWN: It just summed it up for me. Because whether you're an athlete or a professional, there's always somebody that's working really hard. And so you just have that competitive mindset, that if it doesn't motivate you enough to just bring this goodness to the world, you know, competition can also motivate you.
BRIAN SOZZI: Is it tough to turn it off?
ETHAN BROWN: Yeah. When your work is your mission, it's almost impossible.
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