Even after making more changes, the plant-based company Beyond Meat still can’t get it right no matter what. Cutting costs on a product that already had massive quality problems is never a good sign; doing so and remaining unprofitable is a disastrous indicator.
With their third-quarter reports coming out, the company declared a drop in revenue by 8.7% year over year, and only bringing in $75.3 million according to the company. This represented a net loss of $7.3 million, or a -9.6% margin loss. Compare that to a $14.8 million loss, or a -18% loss the year before, and they are turning the failure into slightly less of a failure.
Ethan Brown, president and CEO of Beyond Meat is not happy with the report. “We are disappointed by our overall results as we continue to experience worsening sector-specific and broader consumer headwinds. As we shared last week, we are conducting a review of our global operations for purposes of further and significantly reducing our operating expense base as we seek to accelerate our transition to a sustainable and, ultimately, profitable business.”
Still, the company calls the change toward profitability a positive move. Citing lower manufacturing costs, and inventory reserves per pound of product, the company was able to go from a net loss of $101.7 million at this time in 2022 to $70.5 million this year. A significant change, but it also begs the question of how much longer the company can hold a losing hand.
While Beyond Meat and their rival Impossible Foods soared to fame back in 2019, the pandemic helped cool down their sudden growth almost immediately. They both held on though, with Impossible Foods dropping 20% of their workforce in January 2022, and Beyond Meat following suit in October that same year.
A cutback like this for Beyond Meat was the result of a massive listeria outbreak. While not common in plants, it’s not common or easily found in prepackaged food like this. It sent a huge ripple through the industry in November 2022 when it was discovered. Seemingly like a piece of theater, it happened just as people we starting to forget the discovery of wood, plastic, metal, and even string in their product in December 2021.
No matter their excuses or misleading mindset, the plant-based meat company is failing for a reason. Simply put, they jumped themselves into the segment the wrong way. It’s easy to make a splash when you’re trying to make sensationalist claims. Much like instant coffee back in the 1990s, it’s easy to get attention when people are being told you taste like something you aren’t. Following in their footsteps, once the ruse was up, people simply stopped caring.
Now, instant coffee is for hurricane season and to take camping. If Beyond Meat doesn’t want to suffer the same fate, they’ll simply accept their fate for what it is. They are nothing more than a niche product. Picked up for a change on barbeque days, as a way to not embarrass your vegan friend, or to make a recipe for a mixed crowd at a potluck, Beyond Meat should have known its usefulness.
There’s nothing wrong with trying to push your product to the most people possible. Hell, it’s one of the most American and capitalistic decisions they could make. Just like electing to put your company on the stock exchange. While they soared to over $325 a share for a brief bit in 2019, the stock is now worth less than $10 a share.
A story of too much success too quickly, the company was not a long hold, and those that did are now stuck holding the bag for a company with leadership who can’t quite seem to nail it. Perhaps in the final quarter of 2023 and into 2024 they’ll hear the pop. Not of their meat-like packaging, but the pop of their head coming from their backsides. If they can market this product right, it could prove that the belly was only up for a rub.