The Rise Of Meatless Meat
When Beyond Meat went public in 2019, its stock surged 163% on the first day of trading. This had not happened to any stock on an opening day since 2000, amid the dot-com bubble. Like many stocks that collapsed 24 years ago, Beyond Meat quickly had a day of reckoning. In the last two years, the stock has been down 80%. It recovered some of that recently after posting good quarterly earnings.
Cattle Threat —Texas Fires
The meatless meat craze occurred because plant-based meat is supposed to be a healthy substitute for animal meat. That marketing message worked for several quarters. And, meatless meat was a fade like the hoola hoop. Meatless meat could also be expensive.
Beyond Meat shareholders recently got a reprieve, if only temporarily. Based on strong international sales and cost cuts, its stock doubled in a day. According to Bloomberg, “Chief Executive Officer Ethan Brown said the company would take a number of actions in 2024 to find a path to profitability, including reducing operating expenses, adjusting prices and releasing a new, healthier Beyond Burger.”
Shrinking Demand
The bad news for investors is that Beyond Meat continued to shrink in the final quarter of last year. Revenue dropped 8% to $73.7 million. (Beef cattle revenue in the US is $87 billion a year). Beyond Meat lost $155 million in the fourth quarter, compared to a loss of $67 million in the same quarter a year ago.
Cost-cutting is not a good way to turn around a business. Usually, it is effective once and perhaps twice. The key to success is growth at the top line, which indicates interest in the product. That has not happened for Beyond Meat.
