Beyond Meat Faces Challenges in Declining Plant-Based Market
Beyond Meat is navigating a tough period, with shares closing at 67 cents on Wednesday, a 14% decrease. The company reported a net loss of $29.2 million in its latest financial results. This comes as the broader U.S. plant-based meat and seafood industry experiences a downturn, with unit sales dropping 28% and revenue declining 18% too $1.17 billion over the past two years, according to a report by the good Food Institute. This decline extends to international markets as well.
Several factors are contributing to these challenges. inflation has made consumers more price-sensitive, leading to reduced purchases of premium-priced items like plant-based proteins. Some retailers have even moved these products from prominent refrigerated displays to less visible freezer sections.
Industry experts suggest that further investment and innovation are crucial for the success of plant-based companies. Emma Ignaszewski, associate vice president of corporate engagement at the Good Food Institute, emphasized the need to improve taste, price, and accessibility, noting that plant-based proteins often cost two to four times more than conventional meat and sometimes fall short of consumer expectations regarding flavor.
Beyond Meat is responding with cost-cutting measures, including a 6% reduction in its global workforce with the layoff of 44 employees in August, and the hiring of a chief transformation officer focused on efficiency.
A key component of the company’s strategy is new product progress, particularly in response to consumer concerns about processed foods – a perception fueled, according to Beyond meat’s CEO Ethan Brown, by a “headwind of misinformation” and campaigns financed by the meat industry. The company has recently launched updated versions of its products, including a Beyond Burger with reduced saturated fat and a Beyond Sun Sausage line featuring fewer and less-processed ingredients.
Beyond ground, a new product utilizing faba bean and potato protein, has shown promising results in initial testing on social media, and a steak filet is being tested in select restaurants. Beyond Meat is also working to lower prices and actively counter negative perceptions about its products, securing endorsements from the American Diabetes Assn., Good Housekeeping, and inclusion in recipes from the American Heart Assn.
Brown anticipates a moderation in the current preference for animal protein,potentially driven by factors like pricing pressures,droughts,and disease outbreaks.
(bloomberg News contributed to this report.)
