Last year, an announcement that the net revenue of US-based plant-based meat company Beyond Meat had fallen by 30.5% led to something of an existential crisis for the plant-based meat industry as a whole, with many questioning whether its meteoric rise had began to slow.
Now, Beyond Meat has seen a further decline in its Q1 2024 earnings statement. With an 18% decline in net revenue compared with Q1 last year, from $92.2m (€85.48m) then and $75.6 today, the company has fallen short of expectations.
Its further decline in this quarter is in part due to a continuing decrease in the demand for plant-based meat, as well as consumer fears around the potential for a recession. The decline was driven in part by a 16.1% decrease in volume of products sold.
Responding to its declining profits, Beyond Meat continues to aim to ‘get leaner’, scaling down operations and reducing costs.
The company also continues to invest heavily in Europe, where its success is better than the overall trends suggest.
Scaling down
The company reduced operating expenses; this year, they were $57.1m, compared to $63.9m in the year-ago period. This is the result, according to Beyond Meat, of a reduction in marketing expenses and non-production headcount expenses.
Loss from operations went from $53.5m this year, an operating margin of -70.7%, compared to $57.7m, an operating margin of -62.6%, in the year-ago period. The reduction of loss of operations, Beyond Meat claims, was also due to a reduction in operating costs.
According to Beyond Meat president and CEO Ethan Brown, the company has also brought production in-house to ‘reduce costs and improve quality.’
“The first quarter of 2024 provides a clear proof-point that our operations continue to get leaner and more efficient,” said Paul Sheppard, vice president at Beyond Meat.
Investing in Europe
Beyond Meat has pledged, in a conference call, to invest in its European market. As it has been in previous quarters, it is optimistic about the market. “We continue to make progress with our quick service restaurant business in Europe and the UK,” said Brown. Beyond Meat remains ‘very bullish’ about Europe.
This is in spite of some visible decline in some areas, such as plant-based chicken sales, in the EU. The overall year-on-year numbers in Europe, Beyond Meat suggested, were impacted by the lapping of product loading, meaning that the time period in which products were loaded negatively impacted their performance.
On the plus-side, Beyond Meat’s campaigns with McDonald’s are still active in Europe, with promotions in Germany and the expansion of its plant burger in McDonalds across Lithuania, Latvia and Estonia.
“In Europe, more broadly, we launched Beyond Steak for foodservice in the Netherlands and a retail in Belgium as well as expanded availability of the Beyond Burger at Co-op stores across the UK. Further, we are excited that we will soon be expanding our presence of retail in Germany given our recent satisfaction of local shelf life requirements and see continued opportunity for further distribution expansion in the EU and other international markets.”
In the UK, however, things aren’t as rosy. Consumers are feeling inflationary pressures, which means that they’re not buying as much Beyond Meat. “With regard to the UK, recessionary pressures appear to be dampening demand, both in our retail and food service channels, although we believe this could be a transitory effect,” said Lubi Kutua, Beyond Meat’s CFO. While the UK is ‘a good and healthy market for us from an overall demand perspective,’ recessionary factors remain in play.
Focus on health
Beyond Meat has attributed some of its loss of revenue to bad press around health. In order to counteract this, the company is emphasising health in its upcoming products, in particular the upcoming launch of Beyond Meat IV.
“In the Beyond IV platform, as discussed previously, we placed considerable emphasis on unlocking further health gains,” said Brown.
For example, Beyond Meat is, according to Brown, ‘the first plant-based meat brand to be recognised by the American Diabetes Association evidence-based nutritional guidelines for better choices for life programme.’