Investment Opportunity: Why Cava Group Is a Better Bet Than Beyond Meat

Why I do not recommend Beyond Meat

Like many companies before it, Beyond Meat became the beneficiary and victim of consumer trends. It initially rose following its 2019 initial public offering. With so many consumers looking for a meat alternative, a product created from plants but tasting like meat initially took off, and the food stock briefly crossed $220 per share at its peak.

Nonetheless, sales eventually waned as demand from U.S. consumers fell. Moreover, researchers began to question the health benefits of plant-based meat as the product's highly processed nature became clear. Consequently, revenue fell 18% in 2023.

The stock investors should buy instead

Fortunately, some food-related stocks hold the potential for gains, and investors could have a better investment option in Cava Group (NYSE: CAVA). This restaurant chain is on a path toward nationwide expansion, and it looks increasingly like the Chipotle Mexican Grill of Mediterranean cuisine.

The company is also expanding rapidly, having increased its store count by 30% to 309 in 2023. This puts it well on the way to its goal of 1,000 restaurants by 2032.

Consider Cava stock

The differences in the product offerings of Beyond Meat and Cava Group remind shareholders of an important lesson. Investing in trends like plant-based meat often becomes a short-term phenomenon that does not bring long-term gains.

If Cava can capitalize on the demand for more natural food, the recent rise in its stock price could be just the beginning for its investors.