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Beyond Meat sales under threat as plant-based boom withers

Stock Markets Aug 03, 2022 02:35PM ET
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© Reuters. FILE PHOTO: A Beyond Meat Burger is seen on display at a store in Port Washington, New York, U.S., June 3, 2019. Picture taken June 3, 2019. REUTERS/Shannon Stapleton/File Photo

By Praveen Paramasivam

(Reuters) - Beyond Meat (NASDAQ:BYND) Inc is headed for an unappetizing second quarter as the plant-based food craze withers in the face of several weak product tests at restaurants and mediocre reviews.

Analysts have slashed forecasts for Beyond Meat's sales on supply-chain concerns and waning demand that pulled down shares of the plant-based meat maker and peer Oatly Group (NASDAQ:OTLY) AB from their lofty market debut levels.

"Part of the issue with the adoption of the category for new consumers is that you're not going to change cultural tastes overnight," Mizuho analyst John Baumgartner said. "Recruiting your next phase of consumers requires more innovation and better tasting products."

Estimates for Beyond Meat's second-quarter revenue have fallen by 10% over the last three months, according to Refinitiv IBES data.

Wall Street estimates for Beyond Meat's revenue slides: https://fingfx.thomsonreuters.com/gfx/buzz/lbvgnanbrpq/MicrosoftTeams-image%20(23).png

CONTEXT

McDonald's Corp (NYSE:MCD) last week became the latest chain to not go through with an immediate broader launch of Beyond Meat products, after concluding its U.S. test of a burger made with the plant-based meat without confirming future plans.

Tests at Panda Express and Yum Brands Inc's KFC, Pizza Hut and Taco Bell have also yet to lead to a permanent or U.S.-wide launch, while Dunkin, Hardee's and A&W have discontinued products after launching, according to brokerage Piper Sandler.

Reviews for Beyond Meat's plant-based jerky also indicate skepticism about the taste of the product, stoking concerns about the sustainability of its sales momentum, Piper Sandler analyst Michael Lavery wrote in a note on Friday.

The company has had to discount more to encourage inflation-hit consumers to pick up its products over those of competitors at grocers, leading analysts to say its expectation for average revenue growth of 27% for 2022 now appears steep.

FUNDAMENTALS

* Beyond Meat is expected to post a marginal increase in revenue for the second quarter, when it reports on Thursday, with loss per share widening to $1.18.

* Wall Street expects Beyond Meat to lose $4.48 per share for 2022, much bigger than the $2.88 it expected on April 27, when the company reported results for the first quarter.

Plant-based food maker's shares: https://graphics.reuters.com/BEYONDMEAT-RESULTS/zdpxozongvx/chart.png

Beyond Meat sales under threat as plant-based boom withers
 

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Comments (1)
Remco Ba
Remco Ba Aug 03, 2022 2:40PM ET
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Beyond Meat stuff is just gross, it's not a replacement for meat, it's hunger games
Vishnujana Dasa
Vishnujana Dasa Aug 03, 2022 2:40PM ET
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It isn’t true that plant-based meat can’t mimic perfectly meat. Plant-based fried chicken already won first place at the national fried chicken competition ( ATLAS MONROE | Award Winning Vegan Fried Chicken Delivery Nationwide ). All food is simply amino acids anyway. Meat is still ghastly.All flavors come from plants that’s why people use so many condiments. No one eats a freshly dead animal as is. Imagine throwing a fresh dead deer on the diner table. Your tongue isn’t so sophisticated that it can tell the difference anyway. That is why the names of animals are changed to ham, veal, bacon, burgers, pork, sausage, hotdog, nuggets, steak, or ‘Happy Meal’, whimsical names to hide the violence.* We pay people to do what we would never do to animals. They have the capacity to fear, to be happy, express contentment, to seek to fulfill the needs of life such as shelter, warmth, a family life. They bleed just like you and me. They suffer just like we do. Meat-eating is completely
 
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