Beyond Meat, Inc. announced on Thursday, Nov. 2., that it is slashing its revenue forecast for the second time in three months – a decline of as much as 21 percent from 2022. As it reduces operating expenses, the company also plans to eliminate 65 jobs, representing eight percent of its global workforce.
The plant-based meat factory said it now expects full-year revenue of $330 million to $340 million – down from its prior range of $360 million to $380 million. It estimates that its planned staff cutbacks, including some executive-level positions, will result in up to $10.5 million in savings.
Beyond Meat's money-saving program includes a potential restructuring of its operations in China, pricing changes, shifts in manufacturing capacity and real estate and the possible discontinuation of some products.
In the third quarter, the company expects to generate a free cash flow of about $7.6 million, but that trend is not expected to persist into the fourth
The fad wanes – people are eating less fake meat
In a research note, Bloomberg intelligence analysts Jennifer Bartashus and Jibril Lawar wrote that the "love affair" of consumers with Beyond Meat's pricey meat substitutes is waning after an initial surge of interest when introduced to the company's flagship Beyond Burger, designed to look, cook and taste like a traditional beef burger – "burgers that appear to bleed" and imitations of meatballs and sausages.
Rising prices are pushing consumers to look for cheaper alternatives while higher costs are eating away at profits.
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Analysts told Reuters that Beyond Meat does not have the room to raise the prices of its faux meat products as it is still trying to win consumers to its plant-based protein.
Last year, Beyond Meat sales slid six percent in the United Kingdom. Earlier this year, administrators were called in by vegan specialists, including Meatless Farms of Leeds and Lincolnshire-based Plant & Bean, which supplies companies including Quorn and Tesco's Wicked Kitchen, as they battled lackluster sales and steep cost increases.
According to market research firm Mintel, the sales of fake meats in the U.K. are expected to fall or flatline again this year as shoppers have turned to cheaper proteins, including processed meat and traditional vegan or vegetarian options, such as beans, chickpeas and lentils, to save them money. (Related: Fake meat companies are failing as consumers abandon processed plant-based alternatives to real meat.)
Enthusiasm has also been dampened by recent investigations into the health impacts of the highly processed nature of some fake meats.
"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," said Beyond Meat CEO Ethan Brown
Beyond Meat, which has co-developed McDonald’s McPlant vegan burger, said it had been hit by "softer demand in the plant-based meat category, high inflation, rising interest rates and ongoing concerns about the likelihood of a recession." The U.S. trial run of the McPlant burger was canceled last August, but it is still on sale in the U.K. and Ireland.
In the US, Business Insider reported that "sales of Beyond Meat products to restaurants, which make up 25.8 percent of its U.S. fourth-quarter sales, took the biggest hit – falling 30 percent year-over-year for the fourth quarter.
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