One must wonder how much longer loss-making Beyond Meat can navigate the challenges posed by muted demand for plant-based proteins, especially as economic uncertainty in the U.S. represents yet another headwind.
“We saw a slowdown in consumption as the uncertain macroeconomic environment likely exacerbated category challenges,” president and CEO Ethan Brown commented yesterday (7 May). This factor was significant enough to warrant the scrapping of guidance during the first-quarter results announcement.
The prior guidance, issued in February, projected annual sales between $320-335m, with expectations for first-quarter net revenues to be comparable to the same period in 2024.
Reality, however, told a different story. Sales dropped 9.1% in the first three months of 2025, totaling $68.7m. Last year’s corresponding quarter reported an 18% decline to $75.6m. Another downturn is anticipated for the new quarter, with Brown estimating revenues of $80-85m, down from $93.2m in Q2 of 2024, where a decrease of 8.8% already occurred.
Alongside yesterday’s results announcement, Beyond Meat disclosed securing a $100m financing package from Unprocessed Foods, a subsidiary of the non-profit Ahimsa Foundation.
While this funding wasn’t entirely unexpected—Beyond Meat had previously indicated it was in talks to raise additional cash—the decision by Ahimsa to back a loss-making endeavor appears notable, particularly in light of shaky consumer demand for plant-based proteins.
This funding may explain a slight 0.8% increase in the share price yesterday, compounded by Unprocessed Foods possessing an option to acquire a 12.5% stake in Beyond Meat within 30 days from 8 May.
However, at $2.54 upon closing yesterday, the move by the Ahimsa-linked entity appears risky, especially since shares traded above $100 five years ago. The stock has dropped 34% this year alone, with a staggering 69% reduction over the past 12 months.
The option’s strike price is set between a minimum of $2 and a maximum of $3.75. The lower threshold seems increasingly probable, particularly given that Beyond Meat has reported another quarter of EBITDA and net losses.
“Beyond Meat is a category-leading business with exceptional products, a strong commitment to nutrition and ingredient integrity, and a globally recognized brand,” said Ahimsa president Shaleen Shah in a joint statement yesterday. “This reflects our expectation to invest in Beyond Meat’s growth and success for the long term.”
Yet, how long is “long” might be the ultimate question.
As Beyond Meat navigates away from equity dilution for now, concerns regarding business erosion are mounting. It’s increasingly difficult to foresee a forthcoming inflection, according to John Baumgartner, managing director at Japanese investment bank Mizuho Securities, who commented yesterday.
US Sales Pressure Intensifies
Amid a challenging macroeconomic backdrop, financially pressured consumers, and the implications of tariffs, U.S. food manufacturers have voiced concerns during the current earnings season. However, Beyond Meat appears particularly exposed due to its unique category dynamics.
“The company is experiencing an elevated level of uncertainty within its operating environment, which management believes could have unforeseen impacts on the company’s actual realized results,” noted Brown in his explanation of the guidance withdrawal.
This uncertainty manifested starkly in the U.S. market, Beyond Meat’s largest retail sector, where sales fell 15.4% in Q1 to $31.4m. Similarly, sales in the foodservice segment plummeted 23.5% to $9.4m.
International markets became Beyond Meat’s beacon of hope, where the company’s presence found solid footing among quick-service restaurants, particularly in Europe.
In this arena, foodservice sales experienced a 12.1% increase to $15.3m, while retail sales remained subdued, rising only 0.8% to $12.7m.
“Business erosion worsens,” was how Baumgartner characterized his research note—barring the exception of international out-of-home channels.
“Q1 featured a sizable revenue miss versus guidance provided at the end of February and EBITDA also missed by a large margin. Weakness reflected incremental category headwinds stemming from macro pressures, and revenue consistently underperformed our model in three of four segments,” he added.
Similar erosion was noted in China, a market from which Beyond Meat officially withdrew in February, incurring costs of $0.9m related to this withdrawal during the first quarter.
Beyond Meat attributed these costs, along with a non-cash charge of $4.3m for “specific strategic decisions to increase inventory provision for certain inventory items,” to their declines in gross profit and margins.
The gross profit dipped into the negative at $1.1m, contrasting with a positive $3.7m a year earlier, resulting in a negative margin of 1.5% compared to 4.9% previously.
Adjusted EBITDA losses widened to $42.3m, up from $32.9m. Beyond Meat’s net loss reported at $52.9m, a slight improvement from the $54.4m loss experienced in the same quarter of 2024.
“This facility provides us with additional liquidity as we advance our strategic priorities and invest opportunistically to help us drive our growth plans,” Brown stated in the financing announcement alongside Ahimsa’s Shah.
“We are pleased to welcome a new investor who deeply understands our industry and is mission-aligned with our plant-based ethos. In addition to securing access to this substantial financing, we continue to evaluate opportunities to further strengthen our balance sheet and best position our business for future success.”
However, what constitutes “substantial” when Beyond Meat is encumbered by $1.1bn in debt, particularly in light of potential reciprocal tariffs affecting its international markets?
Currently, Beyond Meat has $115.8m in cash and cash equivalents, although this sum includes unspecified “restricted cash.”
“In response to this interruption in our recovery, we are intensifying cost-savings initiatives to achieve run-rate EBITDA-positive operations by year-end 2026,” Brown remarked.
The market awaits.
