US plant-based meat group to reduce workforce by almost a fifth as consumers seek cheaper alternatives
Beyond Meat has slashed its sales forecast and revealed a plan to cut its workforce by almost a fifth, the latest company in the nascent plant-based meat sector to reveal a hit from inflation and rising competition.
The group said on Friday it now expected full-year revenue for 2022 in the range of $400 million to $425 million (€411m to €436m), down from a previous forecast of $470 million to $520 million and from reported 2021 revenues of $464.7 million.
Ethan Brown, chief executive, said the company would reduce staff numbers by about 200, representing about 19 percent of its global workforce. Beyond Meat said it expected to make operating savings of about $39 million over the next 12 months on its cost-reduction measures.
The company’s shares, which rose as high as $239 after it floated in 2019, eased 1 percent to $14.60 in early trading in New York.
Growth in plant-based meat sales has stuttered since a boom in 2020 as the cost-of-living crisis bites into consumer spending. The category is particularly vulnerable because its products are typically sold at a premium to the real meat, industry analysts say.
Even before this year’s rise in inflation stoked fears of a global recession the market had lost some of its momentum, with Canadian group Maple Leaf Foods announcing it was scaling back its plant-based meat operations earlier this year.
Brown said that while headwinds, including record inflation, would eventually pass, Beyond Meat was “significantly reducing expenses” to become cash flow positive in the second half of next year. “We believe our decision to reduce personnel and expenses throughout the company, including our leadership group, reflects an appropriate right-sizing of our organization given current economic conditions.”
Beyond Meat, which will release third-quarter results on November 9th, said it had been “negatively impacted by ongoing softness in the plant-based meat category overall, especially in the refrigerated sub-segment, and by the impact of increased competition”.
It added that inflation was exerting pressure on the category, with consumers trading down into “cheaper forms of protein, including animal meat”, while delayed and cancelled product promotions had also affected its revenue outlook.
Beyond Meat eliminated the job of chief supply chain officer after Bernie Adcock stepped down from the role in September.
The company also suspended chief operating officer Doug Ramsey after he was reportedly arrested and charged following a road-rage incident in which he was accused of biting a man’s nose. In an SEC filing Beyond Meat said that Friday was Ramsey’s last day of employment, and confirmed that Jonathan Nelson would oversee operations and the supply chain. – Copyright The Financial Times Limited 2022