Fake meat fails? Beyond Meat spins as sales slow, inventory drops and partnerships fail to materialize

Plant-based Beyond Meat is facing major headwinds – despite some people’s curiosity for a meat alternative amid meatpacking plant closures due to the Covid pandemic.

Several industry analysts are sounding the alarm of impending doom as the company posts a net loss of $100 million in May and sees multi-year partnerships with brands like McDonald’s and Taco Bell draw lackluster enthusiasm – its stock having fallen 74% last year.

of may report was just the latest admission that Beyond Meat was falling short of the lofty expectations it set just a few years ago. The company acknowledged that it had “a history of losses and that we may be unable to achieve or maintain profitability” for the foreseeable future in its latest report.

Several industry analysts are sounding the alarm of impending doom as the company posts a net loss of $100 million in May. Pictured above is the company’s share price over the past year

The bad vibes are also being felt within the company, as Bloomberg reported that CEO Ethan Brown told employees that 40 jobs had been cut as part of an attempt to cut costs.  A deal with McDonald's (above) hasn't helped the company

The bad vibes are also being felt within the company, as Bloomberg reported that CEO Ethan Brown told employees that 40 jobs had been cut as part of an attempt to cut costs. A deal with McDonald’s (above) hasn’t helped the company

All of this has resulted in a stomach ache for investors, with a huge bite out of Beyond Meat’s stock price, which peaked in July 2019 at over $234 per share, began to decline steadily there. a year and is now trading at around $32. . Overall, the stock has fallen 74% over the past year.

The bad vibes are also being felt within the company, as Bloomberg reported that CEO Ethan Brown told employees that 40 jobs had been cut as part of an attempt to cut costs.

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

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

But none of the tests resulted in long-term success, with many Beyond Meat partners not expanding their plant-based options to more restaurants or eliminating menu items altogether. Sales of the McDonald’s McPlant product were reportedly disappointing in many places, and some restaurants stopped serving it altogether.

The company acknowledged that it had

The company acknowledged that it had “a history of losses and that we may be unable to achieve or maintain profitability” for the foreseeable future in its latest report. Pictured above is the company’s share price over the past five years

“Beyond Meat needs to drastically cut costs and reduce cash burn or it will go bankrupt,” wrote New Constructs CEO David Trainer. Pictured above is Kim Kardashian, who was recently hired as a flavor consultant for the brand in online ads

The company formed a partnership this year with Kim Kardashian, in which it consumed some of its products for online advertisements.

As bad as things have been, the worst could be on the horizon. Market watch cited a recent analysis by independent equity research firm New Constructs in which Beyond Meat was listed as a “zombie stock” that could soon reach $0 per share.

“Beyond Meat needs to drastically cut costs and reduce cash burn or it will go bankrupt,” wrote New Constructs CEO David Trainer. “Companies with high cash burn and low cash on hand 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 1Q22, Beyond Meat’s cash balance could only sustain its cash burn for just 10 months after 1Q22. Raising additional capital to fund new cash burn would likely be expensive and bad news for existing and new shareholders alike.

The company is expected to release its latest quarterly report after markets close on Thursday. Its latest report, released in May, showed a company struggling with stagnant revenue and plummeting stock prices.

In this report, business leaders acknowledged the decline in revenue and listed several issues that could further harm the business. These include the launch of 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 to feel the effects of Covid and support public health measures in the future – in addition to inflation and chain setbacks. supply.

Partnerships with McDonald's, Taco Bell and KFC (see above) didn't pan out as the company had planned

Partnerships with McDonald’s, Taco Bell and KFC (see above) didn’t pan out as the company had planned