Shares in Beyond Meat tumbled after the maker of plant-based burgers revealed it was to slash nearly one-fifth of its workers, thanks to a decision by cash-strapped consumers to switch to animal meat.
The California-based group – which uses pea, rather than animal, protein to make vegan versions of the likes of meatballs and sausages – announced that it was “significantly reducing expenses”, in the face of “headwinds” which had undermined its sales prospects.
Beyond Meat said it had been “negatively impacted” in part by enhanced competition, but also by “ongoing softness” in the plant-based meat sector, particularly in demand for refrigerated products, as mounting cost-of-living pressures force consumers to switch to cheaper foods.
“Inflation is believed to be an underlying factor exerting pressure on the [plant-based meat] category as consumers trade down into cheaper forms of protein, including animal meat,” the company said.
Shares in the group slumped by 7.9% to $13.61 in afternoon deals in New York.
The shares floated in May 2019 at $25, and reached a high of $239.71 two months later, amid a boom in interest on plant-based meat alternatives to animal protein.
Indeed, the group said that the “global climate crisis underway dictates greater, not less, urgency in the adoption of all solutions”, including its products, which avoid the emissions and feed conversion issues surrounding livestock sectors.
“Our mission, brand and long-term opportunity endure,” said Ethan Brown, the Beyond Meat chief executive.
The group said it had cut to $400m-425m, from $470m-520m, its forecast for its 2022 revenues – ditching hopes of an increase from last year, when revenues totalled $464.7m.
The downgrade implied weaker profits expectations too, with Beyond Meat saying that it “expects gross margin to be negatively impacted as a result of the reduced revenue outlook”.
It announced that it was to axe about 200 employees, equivalent to 19% of its global workforce, with reductions made “throughout the company, including our leadership group.
“We believe our decision to reduce personnel and expenses throughout the company… reflects an appropriate right-sizing of our organization given current economic conditions,” Mr Brown said.