Beyond Meat revenue falls by 30% due to ‘softer demand’ for plant-based products
9th August 2023
Meat alternatives brand Beyond Meat has seen its sales decline by nearly a third in the second quarter of 2023, as consumers opt for more affordable animal protein and the health credentials of plant-based meat are called into question by many.
The company reported a total net revenue of $102.1 million for the three months to the end of June, down by 30.5% compared to the same period last year. The declining trend has continued from the first quarter of 2023, when profits were down 15.7% year-on-year.
Shares of the company also fell by nearly 12% and are currently worth $15 each, well below its initial $25 price.
In its most recent financial report, the company said its sales had been affected by ‘softer demand in the plant-based meat category, high inflation, rising interest rates, and ongoing concerns about the likelihood of a recession’.
Beyond Meat president and CEO Ethan Brown believes sales have also been impacted by increased concern from consumers over the health benefits of plant-based products.
“This change in perception is not without encouragement from interest groups who have succeeded in seeding doubt and fear around the ingredients and process used to create our and other plant-based meats,” he told investors in an earnings call.
In response, the company is ramping up its marketing strategy to highlight the health credentials of its plant-based products and change perceptions around the manufacturing process, which some consumers deem excessive.
Beyond Meat, which makes plant-based burgers, sausages and nuggets, has also been experimenting with price cuts to incentivise more shoppers to buy into its offering by lowering the price point of its core products to match their animal protein equivalents.
While the company reported lower materials and logistics costs this quarter, it said these were offset by higher manufacturing costs as the energy crisis continues. To make up for rapidly falling sales figures, the firm had cut almost a fifth of its workforce (nearly 200 jobs) last year, saving around $39m (£30.6m) in operating costs.
Other vegan food companies have encountered similar challenges and have had to let staff go in the past year, with Leeds-based supplier Meatless Farm stopping trading altogether and sausage producer Heck reducing its vegan range.
Earlier this year, popular smoothie brand innocent Drinks has also announced it was cancelling its vegan range of coconut, almond and hazelnut-flavoured drinks due to a continued lack of interest from customers.
Similar trends have been reported in the US plant-based meat sector, with major supplier Impossible Foods revealing plans to cut a fifth of its workforce at the start of this year, after slashing nearly 50 jobs in November 2022 as part of a restructuring exercise under new CEO Peter McGuinness.
Despite missing financial targets in the first half of 2023, Beyond Meat CEO Ethan Brown is expecting a steady return to year-on-year growth in the third and fourth quarters as the company moves to reduce its cash consumption and increase gross margins.
Annual revenue is now forecast to be in the range of $360m to $380m, down from previous estimates as high as $415m.
