Entertainment · August 5, 2022

Fake meat failing? Beyond Meat is reeling as sales are slow, inventories are falling, and partnerships aren’t working

Plant-based Beyond Meat is facing a major headwind – despite the curiosity of some people looking for a meat alternative amid the Covid pandemic meatpacking shutdowns.

Several industry analysts are ringing warning bells of impending disaster as the company posts a $100 million net loss in May and sees multi-year partnerships with brands like McDonald’s and Taco Bell spur lackluster enthusiasm — as its shares have fallen 74 percent in the last year .

May’s report was just the latest admission that Beyond Meat hasn’t lived up to the high expectations it set a few years ago. The company acknowledged in its latest report that it “has suffered losses in the past and we may not be able to achieve or sustain profitability for the foreseeable future.”

Several industry analysts are ringing warning bells of impending disaster as the company posts a $100 million net loss in May. Shown above, the company’s share price over the past year

The bad mood is also being felt within the company, as Bloomberg reported that CEO Ethan Brown told employees 40 jobs had been cut in a bid to cut costs.  An agreement with McDonald's (above) did not help the company

The bad mood is also being felt within the company, as Bloomberg reported that CEO Ethan Brown told employees 40 jobs had been cut in a bid to cut costs. An agreement with McDonald’s (above) did not help the company

All of this has caused some investor upset stomachs as Beyond Meat stock prices, which peaked at over $234 per share in July 2019, started falling steadily a year ago and are now trading at around $32. Overall, the stock is down 74% over the past year.

The bad mood is also being felt within the company, as Bloomberg reported that CEO Ethan Brown told employees 40 jobs had been cut in a bid to cut costs.

“While this decision is difficult, it is part of our broader strategy to reduce operating costs and support sustainable growth,” Brown wrote.

Beyond Meat seemed poised to dominate the artificial meat market after announcing a three-year partnership with McDonald’s in early 2021, as well as deals with big fast-food companies like KFC, Dunkin’ Donuts, and Subway.

But none of the trials have resulted in long-term success, as many Beyond Meat partners have either not expanded their plant-based options to more restaurants, or eliminated menu items altogether. Sales of McDonald’s McPlant products have reportedly been disappointing in many places, and some restaurants have halted sales altogether.

The company acknowledged in its latest report that it

The company acknowledged in its latest report that it “has suffered losses in the past and we may not be able to achieve or sustain profitability for the foreseeable future.” Shown above, the company’s share price over the past five years

“Beyond Meat needs to drastically reduce its costs and reduce its cash burn or it will go bankrupt,” wrote David Trainer, CEO of New Constructs. Pictured above is Kim Kardashian, who was recently hired as the brand’s taste consultant in online advertising

The company partnered with Kim Kardashian earlier this year, in which she ate some of his products to advertise online.

As bad as things were, worse could be on the horizon. Market Watch cited a recent analysis by independent equity research firm New Constructs that listed Beyond Meat as a “zombie stock” that could soon reach $0 per share.

“Beyond Meat needs to drastically reduce its costs and reduce its cash burn or it will go bankrupt,” wrote David Trainer, CEO of New Constructs. “Companies with high cash burn and little cash are risky in any market, but especially now.”

“With only $548 million in cash and cash equivalents on the balance sheet at the end of Q1’22, Beyond Meat’s treasury on hand was able to sustain its cash burn just 10 months into Q1’22. Raising additional capital to fund additional cash would likely be expensive and bad news for existing and new shareholders.

The company will release its latest earnings report after the market close on Thursday. The latest report, released in May, showed a company struggling with flat earnings and a falling share price.

In that report, company executives acknowledged falling revenue and listed several issues that could further affect the business. This includes launching new products, namely Beyond Meat Jerky, with lower profit margins than previous products and weak retail demand.

Company officials also said they expect to continue feeling the impact of Covid and the accompanying public health measures going forward – in addition to inflation and supply chain setbacks.

Partnerships with McDonald's, Taco Bell, and KFC (see above) have not panned out the way the company predicted

Partnerships with McDonald’s, Taco Bell, and KFC (see above) have not panned out the way the company predicted