Beyond Meat, the El Segundo-based plant-based meat maker, reported better-than-expected fourth quarter sales on Thursday, despite flagging consumer demand and lower prices. According to the company, revenue fell by 21% to $80 million in the October-December period, but that still beat Wall Street’s expectations. Analysts had predicted revenue of $75.8 million, and Beyond Meat’s shares jumped 14% in after-hours trading.
Beyond Meat’s sales volumes have continued to decline despite price cuts in the U.S. and Europe, and the strong dollar has also hurt profits from abroad, the company reported. Despite this, the company’s net loss narrowed to $66.9 million for the quarter, or $1.05 per share, beating Wall Street’s forecast of a $1.18 per-share loss.
Beyond Meat President and CEO Ethan Brown said the company is making progress in its drive to cut costs and manufacturing complexity. The company cut 200 jobs or 19% of its workforce in October and has narrowed its North American contract manufacturers from eight to three, and reduced inventory.
Those savings, along with easing costs for raw ingredients, should help Beyond Meat tackle one of its most persistent problems: the high cost of its products relative to animal-based meat. One of the reasons for a broader slowdown in demand for fresh plant-based meats like burger patties and sausages last year was high prices, as shoppers faced overall inflation at the grocery. U.S. sales of fresh meat alternatives fell by 11% in 2022, wiping out the 11% gain they had seen in 2021, according to NielsenIQ.
Brown also said the company intends to do more marketing and outreach to consumers about the health benefits of a plant-based diet, including lower cholesterol, as the “drummed-up misperception” that plant-based meats are over-processed and unhealthy has also hurt sales. He added that Beyond Meat plans to release new products with improved taste this year, and the company got a boost when McDonald’s introduced plant-based McNuggets in Germany this month.
Beyond Meat said it expects net revenue in the range of $375 million to $415 million this year, which would be lower than the $418 million reported in 2022. The company said grocery price inflation and concerns about a recession could hurt sales in the first half, but it should see some improvement as the year progresses. Brown believes that the category will win over time on three things, which are taste, proper understanding of the health benefits provided by plant-based products, and price.
