Beyond Meat Sees Bright Side Despite Net Revenue Dropping Over 20%
Beyond Meat's recent fourth-quarter revenues may have been down more than 20% from the same period the previous year, according to a recent earnings release, but the news isn't all bad. Although the company's calling card is sustainably created, plant-based meat alternatives, Beyond Meat is only now shifting into what its CEO, Ethan Brown, believes is a sustainable model for the business.
So what model has the company been in since its founding back in 2009? Beyond Meat has seen rapid expansion and growth through a series of high-profile partnerships with some of the world's biggest fast food franchises. Within its first 10 years in operation, for instance, Beyond Meat had collaborated on plant-based meat products with Dunkin', KFC, and Subway in the U.S., and McDonald's and Tim Horton's in Canada. Beyond Meat also announced a partnership with PepsiCo to develop plant-based food and beverage products in 2021.
Beyond Meat has likewise raised its public profile through the placement of its products in supermarkets nationwide. The company's latest product, Beyond Steak, is currently being sold at upwards of 5,000 groceries and supermarkets, including Walmart and Kroger stores. So despite a few hiccups along the way, including layoffs and a years-long lawsuit that Beyond Meat settled, the company has indeed seen rapid growth. The fourth quarter losses, come amid external factors affecting sales but are joined by what the company sees as positive signs.
Why the revenue loss isn't as bad as it sounds
Beyond Meat experienced a 20.6% dip in quarterly revenue compared to the previous year, and that could certainly seem bad. But according to Food Dive, the company actually achieved its overall revenue goals for 2022, bringing in $418.9 million dollars. The drop in quarterly revenues might seem somewhat deceiving, given that its actual losses were smaller this year ($66.9 million) than last ($80.4 million). But the decline represents net revenue, which takes expenses into account. And it came on the heels of a sharp downturn in grocery and food service sales. Slumping revenues over the course of 2022 contributed to the company's stocks plummeting 77% by the first week of December, per CNN. Among the contributing factors was that competing plant-based brands ate into a potentially shrinking customer base.
The fact that Beyond Meat met its revenue goals despite sagging sales, which CEO Ethan Brown noted was expected due to soaring food inflation and the higher cost of plant-based products relative to traditional meats, could be a sign of the company's new focus on sustainable growth. It offset sales losses with cost-cutting measures like layoffs, which helped the company meet year-long revenue goals, per Food Dive.
Brown affirmed in Beyond Meat's fourth-quarter earnings release that he believes the company is well-positioned to succeed in the lucrative trillion-dollar meat sector, and he saw recent product launches of Beyond Steak in supermarkets, and McDonald's McPlant Nuggets in Germany, as indicative of the company's sustainable approach.