Plant-based meat company Beyond Meat has this week announced plans to significantly reduce operating expenses, including a 19% reduction in its global non-production workforce.
The alternative meat company announced the measures in a statement published yesterday (2 November) in which it revealed that it would be cutting back its annual revenue outlook for the second time in 2023 ahead of its third-quarter earnings conference call scheduled for 8 November.
As a result of ‘softer than expected’ third-quarter results, the company is now expecting net revenues to be in the range of $330 million to $340 million, representing a decrease of approximately 21% to 19% compared to 2022.
In addition to the staff cuts, described by CEO and president Ethan Brown as an immediate step in the company’s broader programme to reduce expenses, Beyond Meat will also initiate a global operations review, narrowing its commercial focus and ‘accelerating activities that prioritise gross margin expansion and cash generation’.
These efforts include the potential exit of select product lines, changes to the company’s pricing architecture within certain channels, accelerated cash-accretive inventory reduction initiatives and further optimisation of its manufacturing capacity and real estate footprint. It will also conduct a review and potential restructuring of its operations in China.
Approximately 65 employees will be affected by the staff cuts, representing approximately 19% of its non-production workforce and 8% of its overall global workforce.
Brown commented: “We anticipated a modest return to growth in the third quarter of 2023 that did not occur, reflecting further sector-specific and consumer headwinds. Even as we implement measures to address those headwinds that are within our sphere of influence, we intend to pursue a further, sizable reduction of operating expenses to improve our cost structure.”
Beyond Meat said it believes net revenues in the quarter were primarily impacted by weaker than expected sales volumes in US retail and foodservice channels, lower than anticipated promotional effectiveness and ‘unfavourable’ changes in product sales mix, reflecting weaker than expected sales of its core products including Beyond Burger, Beyond Beef and Beyond Sausage, relative to certain non-core products including Beyond Steak, Beyond Chicken Tenders, Beyond Popcorn Chicken and Beyond Chicken Nuggets.
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