Beyond Meat says plant-based meat sales are slowing as consumers opt for lower-priced protein

As grocery shoppers’ wallets continue to be pinched, they’re swapping out premium plant-based proteins for something a little less pricey, according to Beyond Meat.

The plant-based meat maker reported another quarter of lackluster earnings last week, with net revenue down 1.6% YoY and $97.1 million in net loss, dropping its full-year outlook from the range of $560 million–$620 million to $470 million–$520 million.

• It also laid off 40 employees (4% of its workforce) to cut costs.

Where’s the beef? Its products’ premium pricing was largely to blame, Beyond Meat founder, president and CEO Ethan Brown said, as the decrease in volume for Beyond Meat’s US biz was due to consumers’ shifts to animal protein and private-label products. (Target’s Good & Gather, Kroger’s Simple Truth, and Amazon’s Fresh have also introduced plant-based meat products over the past two years.)

• Beyond Meat ground beef sells for $8.35 per pound, while standard ground beef is $4.90 per pound on average, Brown noted.
• He pointed to the recent success of Hormel Foods’ Spam, which marked its seventh year of consecutive growth in December and has historically sold well during times of recession.

“That is a very difficult proposition when consumers have very high levels of inflation going on and their buying power in grocery is declining,” he said. “There are a number of confounding factors. We went from a pandemic into record inflation, highest in 40 years. And for a sector that is still gathering its feet and is still in sort of the first set of downs, that’s a very difficult set of conditions to navigate.”

• Beyond layoffs, Beyond Meat is reducing operating, marketing, and commercialization expenses to lower its internal costs.

“We have to get through this period to see a resumption of growth,” Brown said.

Cut your losses: Beyond Meat isn’t alone: The plant-based meat sector as a whole had a tough quarter, seeing its first dip in household penetration in four years, Brown noted.

Last week, meat company Maple Leaf Foods also reported underwhelming results for its plant protein subsidiary, Greenleaf Foods. Sales sank 18.4% YoY due to low retail volume amid rising prices, its CFO Geer Verellen said. CEO Michael McCain said that while the company once believed in a “transformational category outcome,” for plant protein, it “no longer believes that it will materialize,” so it’s reducing its investment in the sector to focus on profitability.—EC