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Beyond Meat has revealed plans to cut 19% of its non-production workforce following a weaker-than-expected third quarter. The company's decision to reduce approximately 65 employees is part of a broader corporate review to address the challenges it currently faces.
Moreover, Beyond Meat is contemplating the possibility of exiting certain product lines, adjusting pricing structures, reshaping its manufacturing processes, and restructuring its operations in China.
During early trading, Beyond Meat's shares rose 6% as it projected approximately $9.5 million to $10.5 million in cash operating savings for 2024, primarily due to workforce reduction, as per Reuters.
Impact of Declining Demand for Beyond Meat
Yahoo reported that the announcement of Beyond Meat's workforce reduction comes amid a significant decline in U.S. demand for plant-based meat this year.
Circana, a market research firm, reported a staggering 21.5% decrease in U.S. retail dollar sales of fresh meat alternatives, including sausages and burgers, until October 8th. Similarly, frozen plant-based meat sales, encompassing items like tenders and nuggets, experienced a decline of 6%.
Beyond Meat has experienced a more favorable reception for its products in Europe. Its burgers and chicken nuggets have become featured items on McDonald's menus across the continent. While McDonald's has tested Beyond Meat's offerings in the U.S., they have not been permanently added to the menu as of yet.
Market Challenges for Plant-Based Meat
Beyond Meat CEO Ethan Brown attributed the sales decline to various factors. Firstly, high inflation rates prompted some consumers to revert to more affordable animal meats. Additionally, negative perceptions surrounding plant-based meat, fueled partly by advertisements released by rival food companies, have led consumers to question its healthiness.
In response, the company has implemented counteractive measures such as launching U.S.-focused advertisements to combat negative perceptions of plant-based meat.
Shift in Revenue Expectations and Earnings Announcement
While awaiting the release of third-quarter earnings on November 8th, Beyond Meat estimates revenue of $75 million for the July-September period, lagging behind the figures from a year ago by 8.5%.
Furthermore, the company anticipates full-year net revenue to fall between $330 million and $340 million, reflecting a decline of 19% to 21% compared to the previous year. Wall Street analysts have initially predicted full-year sales of $365 million.
Photo: Beyond Meat Newsroom
