Beyond Meat revises its yearly revenue outlook, citing declining market demand for plant-based products.
- The company expects 2023 revenues between £283m and £299m, down from previous forecasts.
- Inflation is driving consumers towards cheaper animal proteins instead of plant-based alternatives.
- Second-quarter sales dropped by 31%, falling short of analysts’ projections.
- CEO Ethan Brown addresses changing consumer perceptions regarding plant-based meat benefits.
Beyond Meat has adjusted its revenue expectations for the fiscal year, projecting a range of £283 million to £299 million. This forecast marks a reduction from the initial estimates of £295 million to £326 million, reflecting a notable shift in market dynamics.
The slowdown in demand for plant-based meat products is attributed to inflationary pressures, which have led consumers to prioritise cost savings. As inflation persists, approximately 73% of vegan consumers are seeking out more affordable food options, including conventional meat products. This trend has influenced Beyond Meat’s revenue projections and underscores the competitive pressure faced by plant-based alternatives.
In the second quarter, Beyond Meat reported a substantial decline in net revenue, falling by 31% to $102.1 million. This figure was notably below analysts’ consensus estimate of $108.4 million, further compounding the company’s financial challenges. This performance has raised concerns about the timeline for achieving cash flow positive operations, a target initially set for the latter half of 2023.
Despite a strong start to the year, Arun Sundaram, CFRA research analyst, expressed disappointment in Beyond Meat’s guidance cut, highlighting issues of cash burn and capital needs. He stated, “We are now back to talking about cash burn and the need to raise capital… Something needs to change to prevent this ship from sinking.”
CEO Ethan Brown addressed the evolving perceptions of plant-based meats, noting that scepticism around health benefits is, in part, driven by interest groups promoting doubt about the ingredients used. In response, the company has experimented with price reductions, positioning its products competitively against traditional protein sources. Furthermore, Beyond Meat has expanded its product line with the introduction of new chicken-style offerings, such as the Beyond Burger chicken-style, Beyond fillet, and Beyond nuggets, introduced earlier this year.
The adjustments in Beyond Meat’s financial projections highlight the challenges facing the plant-based industry amid changing consumer priorities and economic conditions.
