Beyond Meat Revenues Dip 30 Percent Due to Weak Demand for Vegan Food

Beyond Meat "Beyond Burger" patties sit on a shelf for sale in New York on Nov. 15, 2019. Angela Weiss/AFP via Getty Images

Plant-based meat company Beyond Meat saw revenues fall by almost a third in the second quarter of 2023, blaming the decline on weak demand, particularly from the United States.

Net revenues for Q2 came in at $102.1 million, which is a 30.5 percent drop year-over-year, according to an Aug. 7 press release. “The decrease in net revenues was driven by a 23.9 percent decrease in volume of products sold and an 8.6 percent decrease in net revenue per pound. The decrease in volume primarily reflected weak category demand, especially in the Company’s U.S. retail and U.S. foodservice channels, and the cycling of a particularly strong second quarter in 2022.”

In the United States, the company saw a 34.3 percent fall in volume of products sold, with “weak category demand” again a key issue.

During a Q2 earnings call, Ethan Brown, founder of Beyond Meat, blamed a decrease in perception regarding the health benefits of a plant-based diet for sales falling in the United States.

In the United States, demand for plant-based food is “more driven by health,” he noted. “And there’s been a decline in the health perception of our category.”

“There’s a food research institute or something … [that] noted 50 percent of consumers in 2020 thought that plant-based needs were healthy. And now, that number is down at 38 percent. That’s a clear outcome of some competitive marketing ... done against us, and they’ve done a really good job at it.”

“We’re now taking a step further and going to be much more aggressive in our marketing around the goodness within our products,” he said.

Beyond Meat’s earnings release showcased a negative outlook for 2023. The operating environment “continues to be affected by uncertainty related to macroeconomic issues, including softer demand in the plant-based meat category, high inflation, rising interest rates, and ongoing concerns about the likelihood of a recession.”

The company predicts full-year 2023 net revenue to be in a range of around $360 to $380 million, representing a 9–14 percent reduction compared to 2022.

“While we are reducing our full-year 2023 net revenues outlook, we nevertheless expect a modest return to year-over-year top-line growth in the third and fourth quarters of 2023, and, relative to the first half of 2023, a meaningful reduction in cash consumption and an increase in gross margin,” Mr. Brown said.

Shares of Beyond Meat crashed following the earnings release given the poor Q2 results and weak guidance.

On Aug. 7 shares of the company traded at $15.28, which fell by 15.64 percent to $12.89 as of 15:09 EDT on Aug. 8. Over the past year, Beyond Meat shares have declined by over 67 percent.

The company has struggled over the past two years, with falling sales forcing the firm to focus on cutting costs to remain profitable.

Low Appetite for Plant-Based Foods

Beyond Meat’s decline in revenues come as Americans seem unwilling to commit to a plant-based diet, according to a survey by Wakefield Research.

“Whether for personal health or planetary health reasons, many Americans are intent on eating more plant-based foods, but still struggle to commit to the lifestyle. In fact, more than 2 in 5 (42 percent) Americans previously made a New Year’s resolution to add more plant-based foods to their meals but did not stick to it,” said a Jan. 4 press release.

The study found that 32 percent have never tried plant-based foods. The top reason for this was found to be the assumption that such foods will taste bad, with 45 percent of survey respondents citing this reason. In addition, 23 percent were not convinced about the health benefits of plant-based diets.

A study published last month at PubMed found that when food items were stamped with “vegan” or “vegetarian” labels, people were “significantly less likely” to choose that item. In addition, male participants were found to have a significantly higher preference for food items containing meat.

Meat for Long Life

Though veganism is being promoted as a healthy choice by some interest groups, studies have contradicted such claims.

A study published in February 2022 analyzed 175 nations and territories across the world, comparing various metrics like life expectancy and the intake of carbs and meat. They found that meat intake was associated with longer life.

“This relationship remained significant when influences of caloric intake, urbanization, obesity, education, and carbohydrate crops were statistically controlled.”

Meanwhile, the consumption of carbohydrates was found to have a negative correlation with life expectancy, albeit a weak one.

Almost two decades ago, another study found something significant—meat consumption was linked to healthy development in kids.

In poverty-stricken Africa, adding just two ounces of meat to the diet of children was found to have improved their muscle development and mental skills.

Despite the benefits of meat, environmental, social, and governance (ESG) ideologies are focusing on promoting a plant-based lifestyle in the United States.

Last year, proxy holders of U.S. Climate Vegan ETF, an exchange-traded fund from the vegan investment firm Beyond Investing, sent shareholder proposals to major American healthcare companies asking that plant-based food options be included in hospitals and be served for every meal to patients.