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Losses of Beyond Meat Increase in the Third Quarter of 2022

Industry: Meat Substitutes
Current: Company Performance

Beyond Meat recorded a larger loss than anticipated as demand for its meat alternatives declined
The company recorded a net loss of $101.7 million, while revenue stood at $82.5 million in the third quarter of 2022
In October 2022, the company announced that it would lay off 200 workers, or 20% of its workforce

Beyond Meat's Losses Increase Amid Rising Costs and Falling Demand for Meat Alternatives

Beyond Meat reported a decline in sales and a larger-than-anticipated quarterly loss as increased freight and raw material costs reduced its profit margins. The maker of plant-based meats added that it anticipates a further slowdown in the market for its products. The company recorded a net loss of $101.7 million, while revenue stood at $82.5 million in the third quarter of 2022.

The company's U.S. food service was the only segment to show quarterly revenue growth rather than decline. During the quarter, US grocery sales decreased by 11.8%, entirely due to declining demand. Sales dropped even more significantly outside of the US, partly as a result of unfavorable currency exchange rates. While food service revenue fell 42%, international grocery sales plunged 53%.

The company's profits have been impacted by the ongoing Russia-Ukraine conflict, industry-wide supply chain challenges, and rising inflation. In addition to weaker-than-anticipated demand, the company's price cuts to increase sales during a period of significant food price inflation have resulted in a decline in revenue. Consumers, affected by decades of high inflation, have reduced spending on discretionary items such as more expensive plant-based meat products in favor of more affordable animal meat.

The company cut its full-year sales forecast for the second time in October 2022 due to weaker demand, particularly in its refrigerated sub-segment, Beyond has projected that its full-year revenue will shrink by roughly 9% to 14% to between $400 million and $425 million and announced that it will lay off 200 people globally, or nearly 20% of its workforce, in order to decrease costs. According to GlobalData, the US meat substitutes sector grew from $0.8 billion in 2017 to $1.7 billion in 2021, registering a CAGR of 15.6%. The sector is expected to reach $3.3 billion by 2026, growing at a CAGR of 14% during 2021–2026.

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