In the fourth quarter, ending Dec. 31, 2023, Beyond Meat’s net revenues came in at $73.7 million, decreasing 7.8% year-over-year. Gross profits also registered a loss of $83.9 million, declining 113.8% in gross margin, compared to a loss of $2.9 million and gross margin decline of 3.7% for the same period a year ago. Net loss was $155.1 million, or $2.40 per common share, compared to $66.9 million for the same period a year ago.
For the full year, Beyond Meat’s net revenue was $343.4 million, a decrease of 18% year-over-year, and gross profit was a loss of $82.7 million, compared to a loss of $23.7 million for the previous year. The company also saw slightly less net losses for the year, coming at $338.1 million, compared to $366.1 million for the previous year.
Beyond Meat also issued full-year guidance for 2024 and expects net revenues to come in between $315-345 million, and gross margin is expected to grow by mid-to-high teens. The company also expects the first quarter of 2024 net revenues to be between $70-75 million.
On the quarterly earnings investors’ call, CEO and President Ethan Brown outlined a multi-pronged approach to achieve those 2024 numbers, including changes to its product assortment and additional operational cost reductions beyond recent layoffs.
“Our 2024 plan includes taking steps to steeply reduce operating expense and cash use; pricing actions and the right-sizing of our production footprint, both in support of margin expansion; a years-in-the-making core platform renovation in Beyond IV that delivers superior health benefits and taste; and, following the announcement and initiation of our Global Operations Review, taking certain non-cash charges pertaining to inventory and assets that are no longer consistent with our path to profitability. We believe these sweeping changes, together with measures we plan to pursue this year to bolster our balance sheet, will strengthen our near-term operations as we pursue our vision of being the global protein company of the future,” Brown shared in a press release.
‘Iron sharpens iron:’ Beyond IV platform in, Beyond Jerky out
As part of its growth strategy, Beyond Meat is set to release the fourth generation of its Beyond Burger in March as part of what it calls the Beyond IV platform. The new product features avocado oil instead of coconut and canola oil, reduced sodium from 60% to 20%, and added an extra gram of protein through a combination of red lentil and fava bean proteins.
While it “is proud of the health benefits available through [its] current products,” Beyond Meat wanted to reinforce its nutritional proposition through the new burger at a time when the nutritional content of plant-based meat products have been questioned, Brown explained.
“We will be rolling out Beyond IV in US retail and view this renovation as an important and potentially transformative moment for our brand and category. Iron sharpens iron, and we’ve certainly experienced this ancient metaphor firsthand. Specifically, the current climate of misinformation and efforts by incumbents, including – sadly – pharmaceutical interests, to poison the plant based-meat well push us to accelerate gains in the health profile of our product platforms,” he said. “Our job is to deliver as much of the nutritional benefits of plant-based eating as we can in the familiar and satiating form and taste of meat.”
Among a series of cuts, Beyond Meat will also pare back its product portfolio by discontinuing its jerky product, which was a joint venture release with PepsiCo on what was supposed to be “the first of many plant-based protein innovations.”
“We are … discontinuing our Beyond Meat jerky product line, despite its number one position in the plant-based jerky category. These refinements allow focus and resources to be put against our latest product platform innovation Beyond IV and other SKUs, which we believe have higher profitable growth potential here in the US and are consistent with my intention to focus more resources against key markets and customers in Europe.”
Price increases do “not reflect an abandonment of our long-sought price parity goal”
Beyond Meat is also cutting ts budget to the tune of $70 million in 2024 to further improve margins, Brown said. Over the last years, the company has reduced its co-manufacturers from 13 to one in North America, he added.
Like other brands facing margin challenges, Beyond Meat will also implement a series of price increases across its portfolio, which will roll out this summer. Additionally, the Beyond IV product, which has “an enhanced value proposition,” will be charged at a premium compared to other branded products, Brown explained.
“We’re implementing changes to our US trade and pricing programs affected in early Q2, though varied across channels or product lines. We expect the overall impact of these pricing changes to meaningfully impact margin across the balance of the year. This change in strategy does not reflect an abandonment of our long-sought price parity goal, which we in fact, achieved in certain very specific offerings.”