Danny Goodman hasn’t eaten a Beyond Burger in three years. And he’s staying away from Beyond Meat Inc. stock despite the meatless mania that’s flowering on Wall Street.
It doesn’t matter that Goodman’s company used to make the vegan burgers for Beyond, which, in earlier days, helped attract investors like Bill Gates and Leonardo DiCaprio.
As Beyond Meat’s market value rocketed toward $3.8 billion on its first day of public trading Thursday, Goodman had a beef with the company. His family business, Don Lee Farms, says that after a bitter 2017 breakup, Beyond Meat stole the methods it had used to make patties from Beyond Meat’s pea-protein ingredients. Beyond Meat and Don Lee Farms are suing one another over, among other things, which of them was more nonchalant about food safety.
Beyond Meat has denied Don Lee Farms’s charges and Don Lee Farms has denied Beyond Meat’s. Investors don’t seem to care. The stock jumped 163 percent on Thursday, making it the most successful initial public offering since the 2008 financial crisis for IPOs valued at $200 million or more.
The legal squabble between the former partners shows how far the players in the $878 million-a-year-and-growing market for meat substitutes have traveled from the starry-eyed hippies who first set out to change the world with a vegetarian gospel. As the market gets more lucrative, it’s become increasingly cutthroat. And there’s more at stake. Companies like Beyond Meat, Impossible Foods Inc. and Goodman’s Don Lee Farms have grown to challenge the traditional meat industry — and now Wall Street is taking them seriously.
“I think less about the daily moves of the stock and really more about where we can take this company,” Beyond Chief Executive Officer Ethan Brown told Bloomberg TV on Thursday. “We’ve got a really exciting future ahead of us and I’m looking forward to executing.”
Goodman said being left out of the IPO was “unfortunate.” But he wished Beyond Meat luck.
“We want everybody to be successful, and we want everybody to do it the right way,” he said.
Among the legal disputes is who might have been responsible for alleged salmonella contamination.
In 2016, Don Lee said it found plastics, cardboard and even a metal nozzle in the ingredients that Beyond supplied, according to internal Don Lee documents viewed by Bloomberg News. A Beyond Meat truck showed up at a Don Lee processing facility with an unidentified white powder contaminating the load, Don Lee said.
Beyond Meat arranged for a food-safety audit in 2016, according to Don Lee’s lawsuit. It found that the systems in a Beyond facility were “more than adequate.” But Don Lee, in its lawsuit, said it had growing concerns about the safety of the product Beyond was providing.
The next year, Beyond dropped Don Lee as its manufacturing partner.
Don Lee sued, saying Beyond continued using procedures it had developed.
Beyond countersued with its own list of foreign objects it said Don Lee left in the burgers — a temperature stick and glove, wood fragments and parchment paper.
When the company complained to Don Lee and asked for a remedy plan, Beyond said its partner “did nothing to change.”
And when Beyond found salmonella in an unfinished batch of food, the company decided the plant was “unsuitable for food production.”
In the latest chapter of the legal saga, Don Lee’s lawyers said they found out that Beyond gave them what they called an altered copy of a food-safety audit of its manufacturing facilities. They added fraud to their complaint in March. Beyond is moving to dismiss the charges.
Goodman might be philosophical about Beyond’s IPO, but he said the next time he craves plant-based meat, he’ll opt for the Impossible Burger or his company’s chipotle black-bean burger.
The Beyond Burger, he said, isn’t “something that I would pick up at a market regardless of our current relationship.”
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