Executives from the El Segundo, California-based company said the percentage of people in the U.S. who believe plant-based meats are healthy is likely to have dropped further this year. Based on data from the Food Marketing Institute, it was 50 percent in 2020 and fell to 38 percent in 2022.
Beyond Meat's woes are exacerbated by a relentless weakness in demand for plant-based meats in the country. The company has taken to offering steeper discounts for its products as consumer sentiment about plant-based meat and its health benefits took a beating, according to the Epoch Times.
"Consumers in the U.S. haven't fully warmed up to plant-based protein alternatives like Beyond Meat, because the products don't live up to shoppers' standards for taste and flavor," said Insider Intelligence Senior Analyst Rachel Wolff.
This sentiment has translated to negative figures for Beyond Meat. Its net revenue for the third quarter of 2023 fell to $75.3 million – an 8.7 percent drop from analysts' estimates of $8.54 million based on London Stock Exchange Group Data. Beyond Meat also posted a loss of $1.09 per share, 20 cents bigger than market expectations of an 89 cents per share loss.
"We are disappointed by our overall results as we continue to experience worsening sector-specific and broader consumer headwinds," said Beyond Meat founder and CEO Ethan Brown.
Beyond Meat slashes annual revenue projections for the second time
Earlier in November, Beyond Meat trimmed its annual revenue forecast for the second time this year and announced fresh job cuts as part of a cost-reduction plan. A Nov. 2 article by Bloomberg elaborated on this development from the fake meat company.
From an initial projection of between $360 million and $380 million, Beyond Meat said on Nov. 2 that it now expects its full-year revenue to fall in the range between $330 million and $340 million – a decline of as much as 21 percent from its 2022 projection. It also announced the elimination of 65 jobs, amounting to eight percent of its global workforce, that would result in up to $10.5 million in savings. (Related: Fake meat food bubble is bursting: Beyond Meat slashes revenue outlook, plans to cut jobs.)
In a research note, Bloomberg Intelligence analysts Jennifer Barthasus and Jibril Lawal wrote that Beyond Meat's Nov. 2 announcement "underpins soft consumer demand for plant-based meat, which we expect will continue into 2024."
"Interest in meat-substitute products that mimic the taste and feel of beef and sausages has waned after an initial flurry of interest when they were introduced," the Bloomberg article pointed out. Sagging demand and promotions that didn't deliver also contributed heavy blows to Beyond Meat's tanking revenue.
Aside from these, weaker-than-expected sales of core products such as the Beyond Burger relative to other offerings such as Beyond Chicken Nuggets and Beyond Steak also played a huge role.
"The pricing review is most worrisome," Piper Sandler analyst Michael Lavery wrote in a note. According to him, consumers traded down to more affordable livestock and poultry as inflation stretched budgets. Lavery questioned whether Beyond Meat could raise prices without further damaging demand.
"We still believe improving taste and quality matter the most, and is far more important than consumer education," the analyst remarked, referencing plans by Beyond Meat to challenge "misinformation" about its products.
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