Beyond Meat to Cut 4% of its Global Workforce as Losses Rise and Sales Forecasts Cut | New

Beyond Meat lowered its sales forecast for the year, posted a bigger-than-expected loss for the second quarter and revealed plans to cut its global workforce by 4%, after the US group’s boss admitted that progress was taking longer than expected.

Net revenue in the three months to the end of June fell 1.6% to $147 million as consumers shunned its pricey line of plant-based meats in favor of cheaper house-brand alternatives or returned to other proteins such as beef and chicken.

The group said lower retail prices in Europe, along with increased trade discounts in the United States and the impact of disposing of excess inventory at low prices, were another factor in the drop in revenue.

However, despite the lower prices, Beyond Meat said it was still striving to achieve price parity for its products with traditional animal protein.

International retail channel sales fell 17% in the quarter to $23.7 million.

Beyond Meat’s net losses during the period widened to $97.1 million from $19.7 million a year ago.

The group listed a myriad of factors for the increased loss, including higher manufacturing costs, growth in non-production headcount spending, higher general and administrative expenses driven by ongoing consultancy deals. , greater investment in marketing activities, higher expenditure associated with production testing activities, and increased investment in innovation.

In a bid to save money, Beyond Meat said it would cut its global workforce of about 1,400 workers by 4%, which is expected to translate into annual savings of $8 million, at the end of the year. excluding a one-time hot of around $1 million in the third quarter. for “separation costs”.

Beyond Meat followed fellow plant giant Oatly in lowering its revenue forecast for 2022. It now expects sales of between $470 million and $520 million, down from $560 million and $620 million previously. His new total would represent a 1% to 12% increase on 2021 revenue, down from the previous forecast of a 21% to 33% rise.

The beleaguered company blamed inflation, rising interest rates, heightened worries about a recession, Covid and its potential impact on consumer behavior and demand levels, labor availability challenges labor and supply chain disruptions caused by the war in Ukraine.

CEO Ethan Brown said, “We recognize that progress is taking longer than expected, despite the growing urgency and importance of our opportunity.

“Our transition to mass consumption will occur as we realize our vision: to provide consumers with indistinguishable plant-based meats understood to be healthier and priced equal to their animal protein equivalents. With the recent and dramatic decline in consumer purchasing power, the importance of meeting our price parity targets is magnified.

“We take note of this powerful reminder and continue to advance and expand cost reduction activities in the service of achieving price parity.”

Shares of the California-based company closed down 7.8% at $31.39.

This is a dramatic drop from highs of $235 per share in July 2019, three months after its May IPO.

Brown added, “During the remainder of the year, we are closely focused on intensifying operating and manufacturing cost reductions, executing a series of planned market activities for our global strategic partners. and strengthening our retail business with grassroots support and introducing one of our best innovations to date. With these and other measures, we are confident that we will emerge from the current economic climate leaner and stronger, and well positioned for our next chapter of growth.