CEO Ethan Brown blames inflation but a certain negative perception of the product is now also having an impact.
It's an increasingly crisis for Beyond Meat. The Californian giant of the fake hamburger (made with vegetable meat substitutes) recorded a negative second quarter: while waiting to announce the profits for July-September 2023, for this period, the company expects a turnover of 75 million dollars and a contraction of 8.9% compared to the same quarter of 2023. Again on an annual basis, net revenues are estimated between -19% and -21%.
In light of these poor performances, Beyond Meat will cut its staff by 19%, for a total of 65 employees. Already last year, the Californian company had had to lay off 240 workers, driven by inflation and competition. Other measures that the multinational is about to adopt are the suppression of some product lines, the remodulation of prices, the reallocation of production, the restructuring of activities in China.
In afternoon trading last Thursday, Beyond Meat shares rose 20%. “We had forecast a modest return to growth in the third quarter of 2023 that did not materialize,” Beyond Meat President and CEO Ethan Brown had to admit in a statement.
The Beyond Meat crisis is not an isolated or contingent phenomenon but must be seen in the context of the vertical collapse in demand for "veg" products in the USA. Year-to-date through Oct. 8, dollar retail sales of fresh meat alternatives, such as sausages and burgers, fell 21.5 percent, according to market research firm Circana. Frozen plant-based meat sales fell 6%.
According to Brown, sales of "plant-based meat" have been hurt by high inflation, which has pushed consumers to reposition themselves towards purchasing cheaper natural meats. However, the perception of having to deal with overly processed and less healthy foods than the producers would have you believe is also having an impact on the phenomenon.
Beyond Meat's crisis is found in all commercial channels, from retail to restaurants. The company tried to respond with an advertising campaign aimed at diluting negative perceptions. Things are a little better in Europe where, unlike North America, some Beyond Meat products have been included in McDonald's menus.