plant-based food

Beyond Meat: Cost Cuts Working, Communicating Product Benefits A Longer Haul


Once inflation cools off and people are educated about the dietary benefits of Beyond Meat’s plant-based products and their positive impact on the environment, the company could be in good shape.

Until then, Beyond Meat is slashing production and other operating expenses and testing retail pricing initiatives as it contemplates new marketing messaging about health and sustainability.

Company executives touched on those themes last week while announcing a net loss of $366.1 million in 2022—twice that of 2021’s $182.1 million.

On the positive side, Beyond Meat reduced its operating expenses last year from $97.8 million in Q1 to $62.8 million in Q4.

Most of the reduction was achieved by trimming its external manufacturing partners from eight to three, resetting its deal with PepsiCo Inc. for plant-based jerky and cutting 19% of its workforce last October.



Concerned about Beyond Meat jerky’s profit profile, the company said it has saved $3.6 million in costs by restructuring “certain contracts and operating activities” related to its partnership with PepsiCo.

Getting more consumers to buy Beyond Meat products is a longer proposition. In the meantime, the investment community is concerned.

"We continue to believe the company has ample cash to sustain operations through 2023 and into early 2024 and the cash burn outlook actually improved modestly this quarter,” BTIG analyst Peter Saleh wrote following the earnings release.

“However, we believe the timeframe beyond that—and indeed much of the company's future—is contingent on management achieving positive operating cash flow at some point later this year."

Beyond Meat founder, president and CEO Ethan Brown spent much of last week’s earnings call addressing the impact of inflation on consumer spending and the health benefits of the company’s plant-based offerings.

“It seems reasonable that consumers may retreat from protein that can be 2x the price of its animal-based equivalent during periods of intense inflation and reduced buying power,” said Brown.

To counteract that trend, Beyond Meat has designed "time-bound trials and pricing programs" that have led to increased unit sales and  “takeaway dollar growth as well.””

He also cited ongoing research in a partnership with the Stanford University School of Medicine that found a significant drop in LDL cholesterol and a decline in TMAO—a stomach compound associated with heart disease and certain cancers—among people who ate Beyond Meat products two or more times a day for eight weeks.

However, it will be a while before the company can make a substantial commitment to communicating those health benefits to the public.

Brown said that in the first half of 2023, marketing spending will be allocated to “various launches that we’re doing and things of that nature.”

He questioned whether Beyond Meat can “spend efficiently” to communicate health benefits while also reaching “younger people who are focused on climate and the environment.

“So we’re doing a lot deeper dives in those type of areas to understand how to maximize each dollar we’re spending.” 


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