“We returned to growth, continued our gross margin expansion and reducing operating expenses to their lowest level in four years as we drive the business toward cash flow and profitability objectives,” Ethan Brown, CEO, Beyond Meat, said during the investor call last week.
Beyond Meat’s Q3 net revenue grew 7.6% to $81 million compared to $75.3 million year-over-year. This boost was primarily due to a 15.8% increase in revenue per pound of product, as total volumes sold were down by 7.1%. The higher revenue per pound stemmed from fewer trade discount offerings, raising prices on some items and shifting product mix. However, this was slightly offset by “unfavorable” foreign exchange rates, according to the company.
US retail net revenues grew 14.6% to $30.5 million year-over-year due to a 22.6% increase in net revenue per pound. This was offset by a 6.6% dip in volume due to softer demand and price sensitivity among customers.
The company saw a gross profit of $14.3 million, or gross margin of 17.7%, a significant improvement from last year’s $7.3 million loss and a gross margin of -9.6%. This growth resulted from higher revenue per pound and lower costs per pound, despite a slight offset from lower sales volumes. The company reported cost savings from cutting down on inventory, logistics and material expenses.
Gross margin improvement was due to network consolidation, reduced logistics costs and improved overheard absorption, Ethan Brown, CEO, Beyond Meat, explained during the call.
Operating expenses dropped to $45.2 million from $62.4 million last year due to lower administrative costs, including a $2 million insurance recovery, fewer non-production salaries and reduced selling expenses. The company’s operational loss shrank to $30.9 million, compared to a $69.6 million loss last year, driven by higher gross profit and lower expenses.
2024 priorities focus on lean management, launching Beyond IV products
The company’s first objective “is getting leaner and more efficient” via “lean management practices and principles,” said Brown. This includes refining its product range, target markets and messaging to add higher value quickly.
Beyond Meat’s introduction of its fourth-generation Beyond IV products – Beyond Burger beef and Beyond dinner sausage – also are central to the company’s product lineup.
Beyond IV’s beef contains 2-grams of saturated fat and 21-grams of protein, featuring a blend made of yellow peas, brown rice, red lentils and fava beans with avocado oil. Similarly, Beyond IV sausage contains yellow peas and brown rice with avocado oil. Both products deliver 75% less saturated fat than equivalently sized conventional animal-based sausages and 80/20 beef burgers.
“These core platforms reflect years of research and development that successfully advanced both taste and nutrition,” with recognition from health organizations, including the American Diabetes Association’s Better Choices for Life and the American Heart Association’s Heart-Check Recipe Certification programs, Brown said.
