Beyond Meat revenue plummets in the second quarter due to flagging US demand

Beyond Meat, the manufacturer of plant-based meat alternatives, reported a 30.5% drop in revenue for the second quarter, reflecting reduced consumer demand for its burgers, sausages, and other products, even with price reductions. The California-based company also cut its full-year revenue projection, now expecting revenue to be in the range of $360 million to $380 million, down from its previous estimate of $375 million to $415 million.

Following the announcement, Beyond Meat’s shares suffered a 10% drop in after-hours trading on Monday.

During a call with investors, CEO Ethan Brown acknowledged that the company had faced challenging comparisons to the second quarter of 2022, particularly because of the success of a new beef jerky product and the reopening of restaurants leading to large orders. He also cited the struggle to attract new customers, who perceive the products as unhealthy and overly processed.

To counter these perceptions, Brown announced that an advertising campaign launched the previous week aims to emphasize the “clean and simple” manufacturing process of Beyond Meat’s products and their health benefits. He also mentioned the company’s intention to be more aggressive in marketing and has even reached out to competitors to collaborate on advertisements to improve the image of the category.

Beyond Meat’s revenue for the April-June period was $102.1 million, falling short of Wall Street’s forecast of $108.7 million. U.S. revenue experienced a 40% drop as retail and food service sales declined, while international revenue went down by 8.7%.

While Beyond Meat produces plant-based burgers and nuggets in collaboration with McDonald’s in Europe, these products are not available in the U.S. However, Brown anticipates more U.S. fast-food chains will offer plant-based options soon.

Despite the negative figures, the company managed to narrow its net loss to $53.5 million or 83 cents per share, slightly outperforming analysts’ prediction of an 84-cent loss. Brown expressed optimism about the future, expecting modest revenue growth in the second half of the year with new product launches in the U.S. and expanded distribution overseas.

“We are very excited to be coming out of what we view as a trough in the category and resuming growth in the third and fourth quarter,” he concluded.

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