Plant-based meat substitute maker Beyond Meat said its revenue plunged 30.5% in the second quarter as consumer demand for its burgers, sausages and other products fell despite price cuts.
The El Segundo, California-based company lowered its full-year revenue forecast as a result. Beyond Meat now expects revenue between $360 million and $380 million for the year. That’s down from the $375 million to $415 million it forecast at the end of the first quarter.
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Beyond Meat's shares fell 10% in after-hours trading Monday.
In a conference call with investors, Beyond Meat President and CEO Ethan Brown said the company faced tough comparisons to the second quarter of 2022, when a new beef jerky product generated sales and restaurants were reopening and placing big orders.
But Brown said the company is also struggling to appeal to new customers because of perceptions that its products are unhealthy and overly processed. Brown said an ad campaign launched last week will better explain its “clean and simple" manufacturing process and highlight the products' health credentials.
“We’re going to be much more aggressive in our marketing,” Brown said. “It is an education issue. The facts are there. The health benefits of our products are very strong.”
Brown said Beyond Meat has also reached out to some of its competitors to discuss working together on ads that would help change perceptions about the category.
For the April-June period, Beyond Meat reported revenue of $102.1 million. That was lower than the $108.7 million Wall Street forecast, according to analysts polled by FactSet.
U.S. revenue dropped 40% as both retail and food service sales weakened. International revenue was down 8.7%. International food service demand was flat compared to the same period last year, but retail sales were down nearly 16%.
Beyond Meat makes plant-based burgers and nuggets in a partnership with McDonald's in Europe, but those products aren't offered in the U.S. Brown said he expects more U.S. fast food restaurants to add plant-based options in the near future.
Beyond Meat said its net loss narrowed to $53.5 million, or 83 cents per share, as it reined in logistics and manufacturing costs. That was slightly better than the 84-cent loss analysts had forecast.
Brown expressed confidence that revenue will grow modestly in the second half of this year as new products hit the U.S. market and distribution grows abroad.
“We are very excited to be coming out of what we view as a trough in the category and resuming growth in the third and fourth quarter,” Brown said.