The vegan food manufacturer Beyond Meat, which was once funded by Bill Gates, reported a drop of a 30.5% in profits in the second quarter of this year. The fake meat producer also presented a 12% plunge in its shares in the stock market.
One of the reasons for the drop in its revenues is consumers' refusal to consume synthetic meat. According to a release from the company, this was evidenced by "a 23.9% decrease in volume of products sold" which in turn reflected "weak category demand."
The Company's 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, among other things, all of which have had and could continue to have unforeseen impacts on the Company’s actual realized results
Due to the slump, the company was forced to lower its economic outlook for the end of this year. In the update, it forecasts revenues of $360 million to $380 million (down from the $375 million to $415 million range it forecast in the first quarter). In addition, the new figures show a 14% to 9% drop in revenues compared to 2022:
Net revenues are expected to be in the range of approximately $360 million to $380 million, representing a decrease of approximately 14% to 9% compared to 2022.
To reduce its costs, the company will lay off about 200 workers. This will save it $39 million over a one-year period.
Citizens do not want a meatless future
The company claims on its website that its mission and goals include making "a great impact on our world."
By shifting from animal to plant-based meat, we can positively affect the planet, the environment, the climate and even ourselves. After all, the positive choices we make every day – no matter how small – can have a great impact on our world.
Despite the poor financial results, the company's Chairman and CEO Ethan Brown noted that this is part of "strong progress toward our goal of sustainable long-term growth" and assured that the company remains "steadfast in our belief that plant-based meat, and Beyond Meat specifically, will play an important part of the global response to a climate crisis ... while also delivering health benefits to the individual consumer":
Ongoing category headwinds compressed net revenues, which in turn impacted product sales mix and gross margin, overshadowing significant strides in operational efficiency, including meaningful year-over-year reductions in operating expenses ... and overall cash consumption.
However, many consumers do not agree with Brown and choose to continue to consume conventional meat. The data from the United Nations' Food and Agriculture Organization (FAO) showed last year that world meat production has increased fivefold since the 1960s.