Beyond Meat Sees Q1 2025 Sales Decline Amid Market Challenges

Beyond Meat posted a 9.1% year-over-year (YoY) decrease in net sales to $68.7 million in the first quarter of 2025, a “clearly disappointing” backslide after two quarters of YoY growth, CEO Ethan Brown told analysts Wednesday afternoon.

The dip in financial performance has been attributed to several factors. Shifting consumer behavior, influenced by macroeconomic uncertainties, has led some shoppers to revert from plant-based meat alternatives to cheaper animal products. Additionally, significant U.S. food retailers have started relocating plant-based items from the chilled aisle to the frozen section, contributing to delays in product availability.

“As category and macroeconomic headwinds more generally slowed velocities toward the latter half of the quarter, it became harder to overcome the volume implications of these distribution gaps,” said Brown. Looking ahead, he remains optimistic, stating, “We expect to build back much, though not all, of this and other lost distribution.”

Consumer Sentiment and Perceptions

Brown emphasized that the most pressing challenge for the brand in the U.S. is the negative sentiment surrounding ‘ultra-processed’ food products. He stated, “The central issue impeding our return to sustained growth is perception, or more accurately, misperception.”

Despite being “a very clean source of protein,” Beyond Meat’s value proposition is often clouded by doubt and misinformation, Brown noted. To combat this, the company is prioritizing efforts to dispel misconceptions and educate consumers about their products. Recent initiatives include the release of a 10-minute video titled ‘Planting Change’, which has garnered over 2 million views on YouTube. “We’re seeing an intensification of interest in the U.S. consumer around protein,” said Brown, as he outlined plans for improving brand perception.

Macroeconomic Factors and Tariffs

Regarding the impact of macroeconomic factors and tariffs, CFO Lubi Kutua remarked, “There are no guarantees, but we think the direct impact on our business is relatively minimal.” However, he acknowledged that nervous consumer spending has negatively affected the entire category. Kutua recalled that during peak inflation in 2022, many consumers opted to shift from plant-based proteins to animal protein, emphasizing that the majority of their customers are flexitarians.

Financial Update

Beyond Meat, currently grappling with debts totaling $1.1 billion due to a convertible note offering made in March 2021, is actively exploring potential transactions to address these obligations before they mature in 2027. In a positive development, the company has recently secured a financing facility of up to $100 million from Unprocessed Foods, LLC., an affiliate of the non-profit Ahimsa Foundation.

Under this deal, Unprocessed Foods will receive warrants proportional to their funding, allowing them the option to purchase up to 12.5% of Beyond Meat’s outstanding shares, at an exercise price set at 115% of the average daily volume-weighted price over a 30-day period starting May 8, 2025, with minimum and maximum prices of $2.00 and $3.75, respectively.

Q1 2025 Financial Metrics

• Net revenue: -9.1% YoY to $68.7 million, volumes -11.2%
• Net loss: $52.9 million
• Gross margins: -1.5%
• US retail revenue: -15.4% YoY to $31.4 million; volumes -23.2%
• US foodservice revenue: -23.5% YoY to $9.4 million; volumes -22%
• International retail revenue: +0.8% YoY to $12.7 million; volumes -8.6%
• International foodservice revenue: +12.1% YoY to $15.3 million; volumes +13.5%
• Full year 2025 outlook: Not provided due to an “elevated level of uncertainty.”
• Balance sheet: As of March 29, 2025, Beyond Meat’s cash balance was $115.8 million, with total outstanding debt of $1.1 billion.

While the figures may paint a bleak picture, the company stresses the importance of distinguishing between regular operating expenses and extraordinary costs incurred during the quarter, which includes legal fees related to disputes and severance payments following staff cuts.