Beyond Meat has added to the fervour around slowing plant-based sales growth in the US by slashing its outlook by as much as US$95m and cutting hundreds of jobs.
The California-based maker of the Beyond range of products has lowered its sales guidance for the second time in its fiscal year ahead of the third-quarter results on 9 November, the latest in a spate of negative announcements for the alternative-meat category.
Nasdaq-listed Beyond Meat said today (14 October) it had eliminated 200 jobs, with president and CEO Ethan Brown citing “current economic conditions” for the lay-offs.
Third-quarter sales are expected to be down 23% on last year at $82m. For fiscal 2022 as a whole, revenue will likely be 9-14% lower after Beyond Meat cut its forecasted sales to $400-425m.
In August, when the company revealed a separate, unspecified number of job losses from its more than 1,000-strong global workforce, the outlook was $470-520m, a cut in itself from a previous estimate of $560-620m.
Brown explained: “We continue to make strong progress against the levers of mainstream adoption – taste, health and price – and are steadfastly advancing key strategic partnerships. The global climate crisis underway dictates greater, not less, urgency in the adoption of all solutions of which ours is among the most immediate and powerful.”
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He added: “We believe our decision to reduce personnel and expenses throughout the company, including our leadership group, reflects an appropriate right-sizing of our organisation given current economic conditions. We remain confident in our ability to deliver on the long-term growth and impact expected from our global brand.”
Last week, privately-owned Impossible Foods, confirmed “fewer than 50” staff had been let go as part of a restructuring exercise under new CEO Peter McGuinness. However, the Impossible Burger maker was more sanguine over its own growth prospects.
“Contrary to reports about the performance of the plant-based meat category and a number of companies within it, we’re seeing hyper-growth, with over 60% year-over-year sales growth in retail alone,” Impossible Foods said in a statement confirming the job cuts.
In the wider US alternative-protein market, staff are also destined for the chopping block at Planterra Foods’ Denver factory as JBS, the Brazilian real meat major behind the plant-based business, said it was pulling the plug on the venture just two years after launch.
While the sense of cooling category growth has stretched into Canada – with consumer demand warnings from Maple Leaf Foods and The Very Good Food Company going up for sale – the US remains the centre of attention.
Brown, meanwhile, also blamed “changes” in customers’ inventory levels, along with “postponed or cancelled promotions” for the downbeat sales forecast.
The CEO added: “While the company continues to review the drivers behind recent performance, the company believes it has been negatively impacted by ongoing softness in the plant-based meat category overall, especially in the refrigerated sub-segment, and by the impact of increased competition.
“Inflation is believed to be an underlying factor exerting pressure on the category as consumers trade down into cheaper forms of protein, including animal meat.”
Beyond Meat has been plagued by losses on its bottom line and the company grabbed further attention in September when COO Douglas Ramsey was suspended following a fracas at a US football game. Today, Beyond Meat confirmed he had left the business. Meanwhile, Bernie Adock as the chief supply chain officer quit to pursue other opportunities.
In the first half to 2 July, the Beyond Burger maker’s sales dropped 0.4% to $256.5m, with second-quarter revenue down 1.6%. Net losses widened to $97.1m in that quarter from $19.7m, bringing the first-half loss to $197.5m versus a negative print of $46.9m a year earlier.
At 18:11 BST, Beyond Meat shares stood at $13.94, down 5.68% on the day. Year-to-date, they were 78.51% lower.
Beyond Meat headed up today’s statement by saying the business is “making a strategic shift in pursuit of a more sustainable growth model that emphasises the achievement of cash-flow-positive operations”.
Brown added: “While we believe the current headwinds facing our business and category – including record inflation – are transient, our mission, brand, and long-term opportunity endure. To manage through the current environment and realise the opportunity ahead, we are significantly reducing expenses and sharpening our focus on a set of key growth priorities.”