One has to wonder how much longer loss-making Beyond Meat can weather the storm of muted demand for plant-based proteins as economic uncertainty in the US now presents yet another headwind.
“We saw a slowdown in consumption as the uncertain macroeconomic environment likely exacerbated category challenges,” president and CEO Ethan Brown said yesterday (7 May), a factor sufficient enough for guidance to be scrapped in the first-quarter results announcement.
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That guidance, presented in February, was for annual sales of $320-335m, “with first-quarter net revenues expected to be comparable” to the corresponding period in 2024.
The fact is, they weren’t. Sales fell 9.1% in the opening three months of 2025 to $68.7m. In the same quarter of last year, they dropped 18% to $75.6m. Another decline is now expected in the new quarter, with Brown pointing to $80-85m, compared to $93.2m in Q2 of 2024, when they fell 8.8%.
Alongside yesterday’s results announcement, Beyond Meat revealed it had secured a $100m financing package from Unprocessed Foods, a unit of the non-profit Ahimsa Foundation.
While the funding was not a surprise in itself, as Beyond Meat had flagged in February it was in talks to raise additional cash, the fact Ahimsa is willing to take a punt on the loss-making business perhaps was, especially with consumer demand for plant-based proteins on a shaky path.
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By GlobalDataPerhaps the funding was behind a 0.8% move higher in the share price yesterday, and the fact Unprocessed Foods has an option to take a 12.5% interest in Beyond Meat 30-days from 8 May.
But at $2.54 at the close yesterday, the move by the Ahimsa-linked firm appears risky, when you consider the shares were trading north of $100 five years ago. They have lost 34% this year alone, with the decline even larger over the last 12 months at 69%.
The strike price for the option has been set at a minimum of $2 and a maximum of $3.75. The lower threshold certainly looks in sight, especially given Beyond Meat reported another quarter of EBITDA and net losses.
“Beyond Meat is a category-leading business with exceptional products, a strong commitment to nutrition and ingredient integrity, and a globally recognised brand,” Ahimsa president Shaleen Shah said in a joint statement yesterday. “This reflects our expectation to be invested in Beyond Meat’s growth and success for the long term.”
How long is long might be the ultimate question.
As Beyond Meat “sidesteps equity dilution for now, business erosion is increasingly concerning, and it’s hard to see a forthcoming inflection”, John Baumgartner, a managing director at Japanese investment bank Mizuho Securities, wrote yesterday.
US sales pressured
While the uncertain macroeconomic backdrop, financially pressured consumers and the implications of tariffs have been common themes expressed by US food manufacturers during the current earnings season, Beyond Meat seems more exposed given its category dynamics.
“The company is experiencing an elevated level of uncertainty within its operating environment, which management believes could have unforeseen impacts on the company’s actual realised results,” Brown said as he explained the reasons for the guidance withdrawal.
That was evident in the US market, Beyond Meat’s largest when it comes to retail. Those sales fell 15.4% in the first quarter to $31.4m. And similarly in foodservice, sales dropped 23.5% to $9.4m.
International was Beyond Meat’s saviour, where the company has a more solidified presence in the out-of-home channel with quick-service restaurants, especially in Europe.
Those foodservice sales were up 12.1% at $15.3m, while retails sales were more subdued, up only 0.8% at $12.7m.
“Business erosion worsens,” was how Baumgartner headed up his research note, with the exception of international out-of-home.
“Q1 featured a sizable revenue miss versus guidance provided at the end of February and EBITDA also missed by a large margin. Weakness reflected incremental category headwinds from macro pressures and revenue missed our model in three of four segments,” he added.
That same erosion had been seen in China, a market from which Beyond Meat officially withdrew in February, and consequently incurred costs in the first quarter of $0.9m related to that withdrawal.
Beyond Meat cited those costs, along with a non-cash charge of $4.3m related to “specific strategic decisions to increase inventory provision for certain inventory items”, for the losses in gross profit and margins.
Gross profit dipped into the red to the tune of $1.1m compared to a positive $3.7m a year earlier. The margin was a negative 1.5% versus plus 4.9%.
Losses in adjusted EBITDA widened to $42.3m from $32.9m. Beyond Meat’s net loss was $52.9m, a slight improvement from the $54.4m loss in the same quarter of 2024.
“This facility provides us with additional liquidity as we advance our strategic priorities and invest opportunistically to help us drive our growth plans,” Brown said in the financing statement alongside Ahimsa’s Shah.
“We are pleased to welcome a new investor who deeply understands our industry and is mission-aligned with our plant-based ethos. In addition to securing access to this substantial new financing, we are continuing to evaluate opportunities to further strengthen our balance sheet and best position our business for the future.”
However, what is substantial when Beyond Meat is saddled with $1.1bn in debt, overshadowed by the big what if should reciprocal tariffs ensue in the company’s international markets?
It does have $115.8m in hand of cash and cash equivalents but that includes unspecified “restricted cash”.
“In response to this interruption in our recovery, we are doubling down on cost-savings initiatives in support of our goal of achieving run-rate EBITDA-positive operations by year-end 2026,” Brown said.
The market awaits.
