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Beyond Meat CEO Ethan Brown has revealed he is confident that the company can overcome disappointing market performance in 2021. In a recent earnings conference call, he discussed factors that impacted revenue, including Covid-19 and said that a regression towards comfort food had been a stumbling block for brand adoption.
Looking ahead, Beyond has lowered its annual revenue forecast for 2022. Brown reassured stakeholders that the company will recover its growth trajectory in the 10 months ahead. The reopening of the foodservice industry, relaxation of Covid restrictions and new long-term strategic partnerships underpin Brown’s statement of confidence.
Beyond has revised its revenue projections, coming down from $637.3 million in 2022 to $560-620 million. The move comes after a challenging fourth quarter in 2021, which saw shares lose $1.27 in value and retailer sales drop by 19.5 percent.
Brown has been open about the issues facing the company and the reasons he has identified for them. Covid-19 has been cited across the board as having a serious impact on the brand. However, in an earnings conference call, he posed the question of whether the consequences will continue to be felt or represent a blip in the company’s history. He believes the latter. “As our 2022 guidance suggests, we believe last year’s growth rate to be temporary and that growth will build to higher levels this year,” he said.
2021 is largely being addressed as an anomaly, given the build-up in popularity of plant-based alternatives in 2020, which fell off quickly with the spread of Covid. 2020 consumer stockpiling has been cited as giving false sales impressions, which then created a significant deficit in 2021 when hoarding did not continue.
Increased competition compounded the company’s woes in 2021. Large names within the food industry have sought to capitalise on the vegan meat trend, launching products priced more competitively than Beyond. “Competitive activity in US retail intensified in 2021, marked by frequent aggressive discounting and new entrants to the category,” Brown said in the conference call. “We continue to believe that a competitive environment, featuring high-quality products and compelling marketing is a positive as it tends to grow the category. During the case of 2021, we experienced intense increased competition during the period when the size of the prize did not expand.”
The fight back
Brown remains buoyant and claims that Beyond will bounce back from the unprecedented difficulties it faced in 2021. He notes that the brand emerged from 2021 as the number one for refrigerated plant-based meats, in the U.S. and had retained the highest levels of brand awareness over all competitors. Further, he detailed how new strategic partnerships, new product launches and QSR food launches will regain ground. Developments with Pizza Hut, McDonald’s and KFC all helped to maintain consumer attention. Panda Express recently announced two new trial dishes, alongside A&W Canada launching its first Beyond-powered vegan burger.
Talk of long-term strategies was included to reassure stakeholders, as Brown reveals that the company chose to focus its energies on securing long-term reach into burgeoning markets, rather than chasing fast profits. “Throughout 2021, when faced with the decision to maximize short-term outcomes or pursue a longer-term strategy, we chose the latter and made significant investments in future growth here in the US, EU, and China,” Brown revealed.
A future product launch with PepsiCo has been floated as a potentially significant sales driver but no details are yet known about the development.
Competition hotting up
As the vegan meat sector continues to grow, a new sub-niche of clean labelling is beginning to emerge. Actual Veggies, a fellow U.S. brand, has recently announced a new distribution agreement that sees it merchandised alongside real meat burgers. The brand doesn’t attempt to recreate the look or taste of meat but focuses instead on vegetable-only ingredients and clean label production.
Over in Germany, Keen 4 Greens has revealed its mycelium-based clean vegan meat has secured €1.8 million in seed funding. Investment will be used to scale production and finalise new meat-alternative lines.
All photos by Beyond Meat.