Beyond Meat cutting 6% of workforce to reduce expenses

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Dive Brief:

• Beyond Meat is laying off 6% of its workforce, or about 44 employees, as the company aims to reduce costs.  
• The plant-based meat company also is suspending operations in China, which will eliminate about 20 jobs (95% of its local workforce) in the country.
• The move to cut expenses and improve Beyond Meat’s financial picture comes as the plant-based meat sector has seen demand slow, forcing companies to shrink their workforce and abandon the development of some products.

Dive Insight:

Beyond Meat’s decision to reduce its staff and halt operations in China marks the latest step by a plant-based company to bring expenses in line with slumping demand. 

Plant-based foods have been plagued by high prices compared to traditional meat, as well as concerns over its use of highly processed ingredients and critiques of unsatisfying taste and texture. 

Sales of meat alternatives fell 9% to $1.1 billion in 2023, marking the category’s third straight year of declines, according to a Circana report from last September. The data firm noted that meat alternatives have lost dollar share of the total meat department every year since 2020, with the space losing buyers faster than they are gaining new consumers. At the same time, existing shoppers are purchasing less.

Beyond Meat has moved aggressively to stabilize its business to generate growth despite these conditions. 

The company has had multiple rounds of job cuts, raised capital, increased prices due to higher ingredient costs, tweaked the formula of its hamburger-like product and focused on channels and geographies where it has the greatest opportunity for success. Beyond Meat has also overhauled its innovation efforts and pulled some products from the shelf — including its beef jerky developed through a joint venture with PepsiCo.

“We intend to strengthen our balance sheet to improve liquidity and optimize our capital structure,” Ethan Brown, Beyond Meat’s CEO, said in a statement on Wednesday. The company has “considerable confidence in the long-term growth of the global plant-based meat industry and our leadership position therein,” he said. 

During its most recent quarter, Beyond Meat said net revenues in 2024 fell 4.9% to $326.5 million.  The California-based company expects revenue this year to be in the range of $320 million to $335 million. 

There are signs, however, that the company’s efforts to shore up its operations are paying off. 

Net revenues rose 4% to $76.7 million during its fourth quarter as an increase in net revenue per pound offset a drop in the volume of products sold. It was the second consecutive quarter of year-over-year net revenue growth. Beyond Meat also improved its gross margins and cut its losses to $37.8 million from $160.8 million in the same quarter a year ago. 

Analysts expressed skepticism about Beyond Meat’s future following its earnings release. 

John Baumgartner, an analyst with Mizuho, said in a note that weak sales necessitate further downsizing and that Beyond Meat’s cash burn rate “remains concerning.” 

Peter Saleh, an analyst with BTIG, also pointed to struggles by Beyond Meat to turn trials at restaurants into permanent items. He also expressed doubt that the faux meat maker will see a turnaround in retail sales growth “anytime soon.”

“We view Beyond Meat shares with a balanced outlook as strong brand awareness and consumer adoption of plant-based proteins is offset by declining sales, category weakness in the U.S., deteriorating financials and likely capital needs,” he wrote.