Despite the closure of its largest customers, Beyond Meat's quarterly sales grew by no less than 141 % to 97 million dollars (90 million euros). This summer, the producer of meat substitutes plans an aggressive growth strategy.
Growth in supermarkets
Beyond Meat, known for its "almost real" vegetarian burgers, reported quarterly results that were better than expected: overall net sales increased by 141.4 % to 97.1 million dollars. Although it was the lowest growth in at least five quarters, the 'fake meat' producer significantly exceeded the 88.3 million dollars (82 million euros) expected by analysts.
The closure of restaurants in March, including those of regular partners such as McDonald's and Starbucks, has had a significant impact on sales: CEO Ethan Brown said that food service sales in March were about 23 % lower than the company had expected, and that effects will continue to be felt in the second quarter.
Meat production flat in the US
Strikingly, retail sales increased by 12 %. "Like most food businesses, we have felt the impact, but by no means is it destabilizing the business", Brown refers to the corona crisis. An explanation may be to be found in the increasing shortage of meat in the United States, which makes people more likely to discover vegetarian substitutes.
A company like Tyson Foods, one of the United States' largest meat producers, closed several factories after workers became ill, and slaughterhouses were also temporarily closed. Nearly a third of pork processing capacity in the US is currently down and Tyson warns that "millions of pounds of meat are disappearing from the supply chain." As a result, wholesale prices rose by nearly 30 % last week, while beef prices reached record highs.
The industry's moment
Beyond Meat is determined to respond and win hearts with its healthier and more sustainable meat alternatives. "This is the industry's moment", Brown told Yahoo Finance: "We must make sure we are part of a solution", referring to the cause of the spread of the coronavirus: the consumption of and trade in contaminated meat on the fresh market in Wuhan, China.
"We are going to use the summer as an opportunity to bring new consumers into our brand, increase the overall consumer base, so you will see us be aggressive in stores with longer discounting than we've done in the past. Deeper with the discounts as well, as well as special promotions with our quick-service restaurant partners. We want to use this opportunity to introduce people to plant-based meat and hopefully get them to stick with it", Brown said.
Partly because of this, the producer is postponing its forecast for 2020. In the first quarter, Beyond Meat posted a net profit of 1.8 million dollar (1.7 million euros), compared to a net loss of 6.6 million dollar a year earlier. Analysts had again expected a loss.