Beyond Meat has revised its annual revenue forecast due to declining demand for plant-based products.
- Consumers are opting for cheaper animal proteins amidst inflationary pressures.
- Beyond Meat’s latest quarterly revenue fell short of analysts’ expectations.
- The company struggles to achieve cash flow positive operations by mid-2023.
- Efforts to boost demand include price cuts and expanding product ranges.
Beyond Meat is navigating a challenging market environment, adjusting its revenue expectations for 2023. The company now anticipates revenue between £283 million and £299 million, a decrease from previous forecasts ranging from £295 million to £326 million. This revision highlights the impact of slowing demand on the financial outlook of one of the leading names in plant-based protein innovations.
With rising inflation, consumers increasingly choose cost-effective animal protein over plant-based alternatives. A significant portion of vegan shoppers, approximately 73%, are actively seeking to reduce their grocery expenses, creating a ripple effect that adversely impacts sales of plant-based products. Beyond Meat reported a 31% drop in its quarterly net revenue to $102.1 million, falling short of the $108.4 million projection set by analysts.
As the company grapples with these financial setbacks, the target of reaching cash flow positive operations within the second half of 2023 seems challenging. This financial strain is compounded by the need for strategic realignment, with analysts highlighting the necessity for change. CFRA research analyst Arun Sundaram remarked that, “The guidance cut is disappointing, especially considering the decent start to the year,” underscoring the urgent need for Beyond Meat to pivot its operational strategy.
In response to declining demand, Beyond Meat is testing strategic price reductions, aligning some of its core product prices with or below their animal protein equivalents. This pricing experiment aims to increase consumer interest and counteract negative sales trends. Additionally, the company has introduced new chicken-style products, such as Beyond Burger chicken-style, Beyond fillet, and Beyond nuggets, in a bid to diversify its offerings and capture a broader market segment.
CEO Ethan Brown has addressed concerns regarding consumer perception, noting that interest groups are partly responsible for the scepticism surrounding plant-based meat products. Such perceptions are shaping consumer choices and influencing sales, forming part of the broader challenge Beyond Meat faces in maintaining its market position.
Beyond Meat must adapt effectively to the shifting consumer landscape to sustain its market share.
