Why Beyond Meat Plans To Lay Off More Of Its Workforce
Beyond Meat, Inc., a leader in the plant-based protein market, just announced plans to lay off about 19% of its workforce (about 200 jobs, according to AP News). The announcement comes on the heels of the company's downward adjustment of its fiscal 2022 sales outlook, lowering it from an anticipated $470 million to $400–$425 million (via Food Business News). While Food Business News reports the layoffs will cost Beyond Meat $4 million in related charges, the company expects the move to save about $27 million in cash operating expenses. The news marks the second time Beyond Meat has lowered its earnings forecast this year. In August, the company decreased its forecast from $560–$620 million (via YouGov).
It's been a tough run for Beyond Meat. In September, the company's COO, Doug Ramsey, was arrested for allegedly biting a man's nose following a University of Arkansas football game. Ramsey joined Beyond Meat in December 2021 following a 30-year tenure at Tyson Foods, according to CNBC. At the time, Beyond Foods felt the effects of a stock spiral that saw share prices drop by 73%. Reuters reports Ramsey officially left Beyond Foods soon after the altercation, and CFO Philip Hardin stepped down earlier this week, according to CNBC.
Down, but not out
Following the announcement, Beyond Meat stock dropped significantly, according to CNBC. That's following 52 weeks of a $12.76 set earlier this week. It's a far cry from the heady days when shares were selling for $109 (via AFN). In a recent guest commentary for AFN, brand strategist Adam Hanft shared his outlook on the meatless meat market segment, including Beyond Meat. While he points to stale marketing efforts as the root cause of the market's stagnation, Hanft says it's still too early to sound the death knell.
"There is zero differentiation or branding in the space; all the players are stuck in Motorola Land, going no further than saying 'we are plant-based.' This is marketing malpractice — giving plant-forward consumers no reason to consume your soybeans over someone else's," Hanft wrote for AFN, citing promising data from 2020 that revealed 40% of people surveyed had tried plant-based meat and about 60% would eat it again. Hanft posits Beyond Meat and other faux meat brands dropped the ball by riding the wave of the new-product media buzz without considering a long-term plan for success.
Maybe Beyond Meat will take this initiative, including layoffs, to turn the tide. The company's president and CEO, Ethan Brown, stated, "While we believe the current headwinds facing our business and category — including record inflation — are transient, our mission, brand, and long-term opportunity endure" (via Food Business News).