Beyond Meat is undergoing a 19% reduction in its non-production workforce following a disappointing third quarter performance. The plant-based meat company has revealed plans to cut approximately 65 employees as part of a broader corporate review. Additionally, Beyond Meat is contemplating discontinuing certain product lines, revising pricing, altering its manufacturing processes, and restructuring its operations in China.
The CEO and President of Beyond Meat, Ethan Brown, expressed that they had expected a modest growth in the third quarter of 2023, which did not materialize. This comes amidst a decline in U.S. demand for plant-based meat, driven by a 21.5% drop in retail sales of fresh meat alternatives, and a 6% decline in frozen plant-based meat sales through October 8, as reported by Circana, a market research firm. The decline in plant-based meat sales has been attributed to factors such as high inflation, which led some consumers back to more affordable animal meats, as well as negative perceptions surrounding the healthiness and level of processing in plant-based products, exacerbated by ads from rival food companies.
Beyond Meat’s shares, however, experienced a 20% increase in afternoon trading following these announcements.
Beyond Meat is scheduled to release its third-quarter earnings on November 8 and anticipates revenue of $75 million for the July-September period, representing an 8.5% decrease compared to the same period in the previous year. The company now expects full-year net revenue to be in the range of $330 million to $340 million, which would be 19% to 21% lower than the previous year, falling short of Wall Street’s earlier expectations of $365 million in full-year sales, according to FactSet’s analysts.
This is not the first time Beyond Meat has resorted to layoffs; the company laid off approximately 240 employees in multiple rounds of cuts the previous year, citing inflation pressures and increased competition as contributing factors.
Despite these challenges in the U.S. market, Beyond Meat has found success in Europe, particularly with its products being featured on McDonald’s menus, although McDonald’s has not yet permanently added these products to its U.S. menu.