Beyond Meat Turns A Financial Corner, Promises Lower Prices and Healthier, Tastier Products in 2023
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Beyond Meat founder Ethan Brown spoke to analysts during an earnings call with confidence and optimism for 2023, promising to better market the health profile of its products, improve the taste of one of its “core platforms” and lower prices.
It’s hard to argue with the fact that the company had a rough 2022 but after releasing better-than-expected results thanks to improved gross margins, Beyond may be turning a corner.
“As we navigate current conditions, we remain intently focused on positioning Beyond Meat to capture the vast opportunity to be a major protein provider in the $1.4 trillion meat industry and play a leadership role in transitioning global consumers to delicious plant-based meats in support of critically important health, climate, environmental, and animal welfare objectives”, Brown said in a statement.
BYND performance in numbers
In its latest earning reports, Beyond shared that fourth-quarter revenues are down 20.6% year on year, with net revenues at $79.9 million. While revenues are down 9.8% at $418.9 million for the full year of 2022 aswell, with net losses at $366.1 million, annual performance met the earnings expectations range of $400 to $425 million set by the company last October.
The stock may still be a ways off its May 2019 IPO price of $25, the BYND stock has rallied of late, closing at $18.77 yesterday (February 27) from a low of $11.82 in November.
In a bid to strengthen the company’s position, Brown outlined a strategy that looks to reduce operational expenses and improve margins. The company reduced its headcount by close to 20% this past October, is decreasing some marketing efforts and focusing on more targeted campaigns for key demographics, is lowering the number of co-packers it works with in North America from 8 to 3 and says it is reducing its inventory by 17%.
From growth above all to long-term sustainability
Brown told analysts that he believes the changes the company has made to transition from an “operating model that prioritizes growth above all” to a “sustainable long-term growth” model are working. “We have confidence that the efforts properly done will over time generate outsized gains,” he said. “We are demonstrating clear and meaningful early progress.”
Brown spoke about the work the company continues to do to decrease product pricing: “As our volumes increase and we start to take advantage of some of the manufacturing improvements we’ve made and start to get to some of the lower-cost ingredients that we’ve been able to negotiate, you’ll start to see a more sustained, lower cost product.”
On the subject of cashflow CFO Lubi Kutua kept things open-ended, saying the company would go out for funding “if it makes sense for us to do some sort of a raise and put more of a buffer on the balance sheet” adding that the company says it plans to be cash flow positive by the second half of the year.
“Skeptics, rarely, if ever, make progress happen”
Concerns around the future of the US plant-based meat industry can feel like misinformed media hype, with Beyond competitor Impossible Foods experiencing strong growth and markets like Asia showing steady and long-term potential.
Seth Goldman, founder of Honest Tea and Chairman of the Board at Beyond shared his thoughts on the company’s evolution to date and commented on its naysayers in a social media post today, writing: “As with any disruptive idea, there will be skeptics. It’s easy to second-guess the innovator – and since most start-ups don’t work out, skeptics often get to claim they were right. But skeptics rarely, if ever, make progress happen, and we certainly can’t rely on them to reinvent our grossly distorted food system. As BYND continues to make advances, such as Beyond Steak, it becomes easier to envision a day when our grandchildren will find it hard to believe our diets were centered around a system that relied on the misery and slaughter of billions of sentient creatures – animals that have as much personality and desire to live as the dogs and cats we welcome into our homes.”