Beyond Meat, a well-known producer of plant-based meat alternatives, has reported a significant 30.5 percent drop in revenue during the second quarter due to weakened consumer demand for its products, including burgers and sausages, despite implementing price reductions.
The company, headquartered in El Segundo, California, has consequently revised its full-year revenue projection to a range of $360 million to $380 million, down from the previous forecast of $375 million to $415 million at the close of the first quarter.
The decline in revenue led to a 10 percent decrease in Beyond Meat’s shares during after-hours trading on Monday.
CEO Ethan Brown addressed the challenges during an investor conference call, explaining that tough comparisons with the previous year and consumer perceptions about their products’ healthiness have contributed to the difficulties.
To counter these issues, Beyond Meat is initiating an aggressive marketing campaign to elucidate its “clean and simple” production methods and emphasize the nutritional value of its offerings.
Maybe they’ll also find a way to cut the extreme sodium levels in their products?
But, this is where the company may be onto something. Although Beyond Meat has been a generally friendlier food company than other competitors (we’re looking at you, Impossible), Brown indicated that he has reached out to competitors for potential collaborations on advertising efforts.
With consideration to better marketing, a recent BCG analysis found that plant-based companies that chose to limit “vegan” language while naming the product’s protein source(s) and highlighting the product’s sensory appeal and health benefits grew six times faster than competitors that didn’t.
Beyond Meat isn’t the only plant-based meat company facing challenges. Major competitor Impossible Foods‘ CEO Peter McGuinness has expressed his concerns about the state of the plant-based meat category. Earlier this year, McGuinness took out a full-page advertisement in The New York Times in response to an article in Bloomberg stating that fake meat was “just another fad.”
“We’re not a fad. We’re not a flop. We’re just getting started — as is the category. Ninety percent of the people that eat our products eat animal meat,” McGuinness told Fox Business earlier this year.
While proponents of traditional meat may perk their ears at these declining plant-based meat stats, conventional meat sales are also down — just more conservatively. Dollar sales of conventional refrigerated meat fell by 2.7 percent year-on-year by July, according to consumer-behavior firm Circana.
Beyond Meat’s plant-based product consumption is declining beyond the U.S., but it’s not as drastic elsewhere. Beyond Meat indicated that while U.S. revenue dropped 40 percent, internationally, things were somewhat flatter. International revenue decreased by 8.7 percent, while retail sales decreased by 16 percent.
So, what does the future hold for Beyond Meat? A new Beyond Meat chicken nugget launched at 1,400 European McDonald’s restaurants earlier this year, and Brown plans to add plant-based options to U.S. fast-food locations in the near future.
While the plant-based meat sector has slowed growth, experts suggest it’s too early to write off the industry. Recent data indicates that while growth rates have slowed, the industry has substantially progressed over the past few years — though much of that was during the pandemic, when supply chains and availability of various products changed drastically, upending consumer choice and preference. Still, Jennifer Bartashus, an analyst with Bloomberg Intelligence, forecasts a modest 1 to 2 percent growth in plant-based meat sales during the second half of 2023.
The plant-based meat industry’s trajectory likely lies somewhere between its initial meteoric rise and a more steady growth pattern. Beyond Meat and similar companies say they are actively adapting to these challenges, aiming to continue adapting to an evolving landscape.
»Related: Lawsuit accuses Beyond Meat of false protein claims
