Beyond Meat anticipates sales pressure as demand in US weakens
USA – Beyond Meat, a plant-based meat company, has foreseen continued sales challenges in the United States due to “weak” demand.
The company revealed that it has been grappling with financial difficulties and is taking additional measures to address these issues.
The report follows Beyond Meat’s introduction of the fourth generation of its Beyond Burger and Beyond beef patty, emphasizing superior health benefits and taste.
During the recent earnings call, Beyond Meat’s CEO, Ethan Brown, revealed plans to raise prices for the new burgers due to costlier ingredients, including a shift from canola to avocado oil.
Analysts noted the company’s progress in transitioning to a sustainable model but expressed concerns about its ability to pivot to growth and positive cash flow.
“In response to evolving consumer preferences for cleaner ingredient decks, Beyond Meat aims to refocus on the health benefits and positive environmental impact of its plant-based products,” they revealed.
“The company is particularly optimistic about healthy demand in the European market, especially in food service locations.”
To address financial challenges, Beyond Meat is implementing various initiatives, including reducing operating costs, streamlining production, and increasing prices to support margin expansion.
The company is set to exit certain markets and discontinue specific product lines in 2024. The plant-based beef jerky developed in collaboration with PepsiCo is among the products slated for discontinuation.
Despite facing a “going concern” risk last November, Beyond Meat has taken steps such as job cuts and market exits to stabilize its operations.
In the fourth quarter of 2023, Beyond Meat reported a 7.8% decrease in net revenue to US$73.7 million, contributing to an 18% decline for the year at US$343.4 million.
The company forecasts sales between US$315 million and US$345 million for the new financial year.
While the adjusted EBITDA and bottom-line losses widened over the quarter, margins remained in negative territory. Beyond Meat anticipates a positive gross margin in 2024, emphasizing list price increases to boost revenue.
The company’s operating environment is marked by uncertainty related to macroeconomic factors such as weakened demand in the plant-based meat category, inflation, higher interest rates, and concerns about a possible recession.
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