Corporate Media Analysis

Q2 – Falling short of expectations 

In Q2, Beyond Meat fell unexpectedly short and accounted for a gross profit of $2.3 million, which was a 4.2% decrease in net revenue compared to the previous year. Their total net revenue is $102.1 million, a decrease of 30.5% year-over-year. The decrease in revenue was primarily driven by changes to pricing and an increase in trade discounts. The company lowered their prices to appeal to consumers, however ended up losing more than earning profit. The company continues to have a high outstanding debt which amounted to 1.1 billion USD as of July 2023. Shares currently stand at $0.92 per share compared to $1.58 per share a year ago. The company’s operating environment continues to be heavily affected by macroeconomic implications, a decrease in demand for plant-based products, and high inflation rates caused by the recession. 

Throughout the first two quarters of 2023, 

• Decrease in demand: The company attributed a 24% drop in the volume of products sold and an 8.6% decrease in net revenue per pound. These numbers reflect the decrease in demand for plant-based products. Additionally, the increase in trade discounts and changes in product sales mix contributed to the decrease in the company’s overall net revenue. 
• Health Debate: There is ongoing confusion about the health benefits associated with plant-based meats. The debate primarily centers around whether plant-based meat is healthier than animal-based products. A few of the aspects of this debate are related to plant-based meat’s nutritional value, and protein source, along with its sustainability efforts. Chief Executive Officer Ethan Brown aims to position the company to play a leading role in reaching consumers on the health benefits of plant-based meats.  
• Product Distribution Expansion: The company is expanding its product presence into 5 major grocers (Costco, Kroger, Publix, Walmart, and Whole Foods) to get its products into areas that will generate more traffic. On a global scale, the company opened an additional 5,000 retail stores from Q1 of 2022 to Q3 of 2023. 
• Innovations: The company is also investing in R&D to bring new products into the market. In August of 2023, the company debuted its ‘Beyond Stack Burger,’ which was designed to have a similar taste and texture to a beef patty. Additionally, the company has plans to release a new plant-based chicken nugget, similar to Mcdonald’s chicken nugget to offer consumers a healthier alternative. 

The plant-based market is still fairly young with consumers slowly transitioning towards vegan or vegetarian-based diets. While meat manufacturers remain a dominant player in the market, Beyond Meat should educate and raise awareness about the health benefits associated with plant-based diets for their customers. For investors, the outlook on the company’s stock still seems to fluctuate heavily and lacks favor in the investing community, however, projected sales for 2023 and 2024 look promising. On a positive note, the popularity of vegan and vegetarian diets continues to climb. In 2022 alone, veganism rose 2% compared to 2020. Beyond Meat’s management operations continue to center its focus on achieving cash flow-positive operations, along with finding financial solutions to cut down on expenditures.