The plant-based meat industry is in trouble: U.S. sales slumped last year as pandemic-era enthusiasm for vegan burgers and sausages continued to wane. Beyond Meat, once a darling of the plant-based craze and the first of its kind to go public in 2019, has become a warning example of the tough road ahead for similar companies.
Beyond Meat released its second-quarter 2024 financial results. Revenue was down 8.8% compared to the second quarter of 2023, and sales volumes were down 14%, but the profit margins the company earned on each of its products increased.
“We are encouraged by many of the results this quarter, which demonstrate clear progress against our 2024 plan and goal of long-term profitable operations,” Beyond Meat CEO Ethan Brown told investors during the earnings call on Wednesday.
For 2023, Beyond's revenue fell 18% to $343.4 million, beating market expectations of lower revenues. However, the company also reported a loss of $82.7 million. In the United States, sales fell 32.3%. So far, the company has not recovered, continuing to be affected by weak demand from the United States, reporting a weak first quarter in which revenue again fell 18% to $75.6 million.
Europe has been one of Beyond's bright spots over the past few years: The company's sales abroad grew in 2023, but sales in the U.S. fell sharply. In the U.K., McDonald's has been selling the McPlant Burger, which uses a Beyond Meat patty, since fall 2021, but a similar partnership in the U.S. never advanced beyond the testing phase.
Beyond has also reported declining sales abroad, but in its most recent earnings call, Chief Financial Officer Ruby Couture said the company is focused on expanding distribution in Europe. “We're starting with a very small footprint in the EU,” Couture said. “We don't have a large presence in Europe at this point.”
As Beyond faces tough decisions on its path to profitability, one investor predicted on the company's February earnings call that the company's “center of gravity” of its business will likely shift to international markets. Brown didn't address that directly on the February call, but acknowledged that in his opinion, the debate about plant-based meat in the U.S. has been “politicized” and “clouded by misinformation.” In the U.S. culture wars, plant-based meat has been pitted against animal-based meat.
The entire plant-based food industry has been affected by fickle customer bases: Rival Impossible Foods decided to restructure its brand to better appeal to meat eaters after raising capital in a “liquidity event” that could lead to an IPO or a sale to another company, while other vegan brands like Now A Days, Meatless Farm and V-Bites have filed for bankruptcy.
Plant-based meat shouldn't be written off entirely, said Chris Dubois, vice president at analyst firm Circana: “It's still a billion-dollar category and makes a lot of sense.”
