The revenue forecast for Beyond Meat company has been lowered as the "bubble" in the artificial meat industry has burst; layoffs are planned.

Fake meat boom burst: Beyond Meat cuts revenue forecast, plans job cuts

Beyond Meat, Inc. announced on Thursday, November2nd, that it is lowering its revenue forecast for the second time in the last three months - a decrease of21 percent from2022. While the company is cutting operating expenses, it also plans to reduce65 jobs, which represents eight percent of its global workforce.

The plant-based meat production plant announced that it now expects annual revenue of $330-340 million, which is below the previous range of $360-380 million.

The cost-cutting program of Beyond Meat includes potential restructuring of operations in China, price changes, changes in production capacity and real estate, as well as possible discontinuation of some products..

In the third quarter, the company expects to generate free cash flow of about $7.6 million, but such a trend is not anticipated in the fourth quarter.

Bloomberg Intelligence analysts Jennifer Bartashus and Jibril Lavar wrote in their research note that consumers' "romantic relationship" with expensive meat substitutes from Beyond Meat is dwindling after an initial surge of interest when the company launched its flagship product, the Beyond Burger, designed to look, cook, and taste like a traditional beef burger - "burgers that seem to bleed" - as well as meatball and sausage imitations.

The increase in prices is forcing consumers to look for cheaper alternatives, while rising costs are eating into profits.

Analysts told Reuters that Beyond Meat is unable to raise prices on its plant-based meat products, as it is still trying to attract consumers to its plant protein.

Last year, Beyond Meat's sales in the UK fell by six percent. Earlier this year, administrators were called in by vegan specialists, including the Leeds-based company Meatless Farms and the Lincolnshire-based company Plant & Bean, which supplies companies like Quorn and Wicked Kitchen Tesco, as they struggled with weak sales and sharp increases in costs.

According to the research firm Mintel, sales of fake meat in the UK are expected to decline again or remain at the same level this year, as consumers have turned to cheaper sources of protein, including meat products and traditional vegetarian or vegan alternatives like beans, chickpeas, and lentils to save money.

Enthusiasm has also been dampened by recent studies on the health effects of highly processed nature of some fake meats.

“This change in perception is not without the encouragement of interesting groups that have managed to sow doubts and fears regarding the ingredients and processes used to create our and other plant-based meats,” said Beyond Meat CEO Ethan Brown.

Beyond Meat, which co-developed the vegan McPlant burger for McDonald's, stated that it has been affected by "lower demand in the plant-based meat category, high inflation, rising interest rates, and ongoing concerns about the possibility of a recession."

The trial launch of the McPlant burger in the US was canceled in August of last year, but it is still being sold in the UK and Ireland.

In the US, Business Insider reports that "sales of Beyond Meat products to restaurants, which account for 25.8 percent of fourth-quarter sales in the US, took the biggest hit - down 30 percent year-over-year for the fourth quarter."

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Sources:
Bloomberg.com
TheGuardian.com
BusinessInsider.com
Brighteon.com