Troubled Beyond Meat reduces 2023 outlook as revenues plummet by almost a third

Dive Brief:

Beyond Meat CEO Ethan Brown told analysts on Monday that there is a “considerable gap between the strong health credentials of our products and a broader color narrative that is now afoot, and this gap appears to have widened,” as the brand saw revenues plummet by almost a third in second quarter earnings results.
Revenues for the period ending July 1 were $102.1 million — 30.5% less than last year, while gross profit was $2.3, compared to a loss of $6.2 million last year, Brown also informed analysts that the company would reduce its revenue outlook between $360 million and $380 million for 2023, a decrease of about 9% to 14% compared to 2022.
The plant-based meat company is battling headwinds, including inflation, higher interest rates and the squeezing spending power of the consumer, but more importantly, shifting sentiments around plant-based meat.

Dive Insight:

Between job cuts last year, repeatedly disappointing earnings results and a reduced financial outlook, Beyond Meat is one of many plant-based meat companies struggling in the industry.

“In our opinion, this is less of a company issue and more of a category issue as plant-based meat in the U.S. struggles to bring new customers in,” according to an UBS Beyond Meat analyst report. “It will be increasingly hard for the company to invest the necessarily level to spur demand on their own and will thus need assistance from competitors.”

From 2020 to 2022, the percentage of U.S. consumers who believe plant-based meats are healthy dropped from 50% to 38%, according to the Food Marketing Institute.

“As a brand and category,” said Brown, “we have significantly more work to do to reach the consumer on the health benefits of Beyond Meat and plant-based meats, respectively.”

While the plant-based meat giant reported plummeting revenues by almost a third, Beyond Meat also said it was “positively impacted by lower materials costs, lower inventory reserves and lower logistics costs per pound.”

The El Segundo, California-based company is calling in third-party organizations to further inform their consumers on the health benefits of its products. Last week, Beyond Meat launched a campaign that seeks to bring its consumers closer to the ingredients used in the alternative protein products.

The campaign — There’s Goodness Here — “shares and celebrates the farming origins of our ingredients and describes our process for turning plants into plant-based meat,” said Brown.

Meanwhile, Beyond Meat is working with the American Heart Association for the first-ever certification of a plant-based meat as a heart-healthy food, while registered dietitians and nutritionists are also a part of the company’s plan to educate consumers.

Beyond Meat, as well as its competitors, have struggled recently with achieving price parity, as well as getting closer to a desirable taste and texture, factors that are pinching the category overall.

During the previous quarter’s earnings call, Brown told investors that the company was “turning a corner” as the gap between revenues and losses narrowed. That corner, however, may be longer than anticipated.

“Like many innovative disruptions throughout history, what we initially thought was going to be a quicker pace of mainstream adoption has proven to be slower,” Brown told investors.

Brown also shared plans that the company is working with retailers to focus on shelf availability and presentation as it looks to bring new renovations to market. The founder and CEO said a “reset and regrounding,” specifically with refrigerated meat, is overdue given high inflation and the exit of competitors.