Reuters / Brendan McDermid
- Bunge Limited, a traditional agri-business company, reported a huge earnings beat Wednesday due to a boost from an early investment in Beyond Meat.
- Bunge owns 1.63% stake in the plant-based meat alternatives company which has gained more than 800% since its May IPO.
- The venture is an important vehicle for Bunge as consumer tastes change, the company said.
- Read more on Markets Insider.
Bunge Limited, a large agri-business company, reported second quarter earnings Wednesday that crushed analyst expectations for the period. It’s adjusted earnings per share for the quarter were $1.45 — analysts expected $0.34.
The cause of this huge beat? A boost by an early investment in Beyond Meat, the popular plant-based meat alternative company.
Bunge, a major soybean exporter also involved in food processing, grain trading, and fertilizer, invested in Beyond Meat prior to the company’s May IPO, Bloomberg reported. Since then, shares of Beyond Meat have surged more than 800%. That showed up in Bunge’s second-quarter results as a $135 million net unrealized gain, the company said in a press release.
That gain added $0.71 to the company’s adjusted earnings-per-share, according to analysis by Morgan Stanley and Citigroup. Earnings also benefitted from differences in soybean costs due to timing, which added $70 million to the quarter. It’s a big change from a year ago, when the company reported a quarterly loss per share of $0.15.
"The second quarter benefited from timing differences and the contribution from a venture investment," said Bunge CEO Greg Heckman. On a call with analysts, he said that the Beyond Meat venture was an important vehicle in the competitive landscape amidst changing consumer preferences.
Beyond Meat has charmed the market and consumers alike by offering plant-based meat alternatives that are marketed towards meat eaters, not as a niche product for vegetarians or vegans. Sales of the products have been consistently high, and show that consumers are willing to pay more for them. Traditional companies and restaurants that offer animal proteins such as beef and chicken have taken notice.
In April, just before Beyond Meat’s IPO, Tyson Foods sold off its 6.5% stake in the company. Tyson went on to directly compete with Beyond Meat in the plant-based alternative space, launching its own line of plant-based products that include "chicken" nuggets.
Other investors in Beyond Meat include Bill Gates and General Mills. Beyond Meat also has a number of high-profile partnerships with restaurants such as Dunkin’ Brands, Tim Hortons, and Del Taco.
NOW WATCH: 7 lesser-known benefits of Amazon Prime
- Here’s how the Fed sets interest rates and why it matters
- Inside one of the oldest and most expensive mansions in Charleston, which is selling for $15 million and was once owned by Abraham Lincoln’s granddaughter
- All eyes are on Starbucks’ earnings as multiple fast-food restaurants smash expectations