As Beyond Meat navigates a challenging market, the company is doubling down on long-term growth through a strategic recapitalization, investments in automation and initiatives to strengthen consumer trust.
With a fresh infusion of capital through an at-the-market (ATM) offering where the company sold shares of its stock, Beyond Meat aims to boost operational efficiency and reinforce its brand credibility through certifications like the American Heart Association’s Heart-Check mark.
The company’s ATM program helped it raise $46.7 million by selling 9.75 million shares of common stock in Q4 2024 to invest in key areas for the company, including automation and optimized operations and production, according to Lubi Kutua, chief financial officer and treasurer, Beyond Meat during the company’s earnings call yesterday.
The company is exploring various recapitalization options, such as equity raises, debt restructuring, or attracting new investors amid rumors fueled by efforts to secure capital that have raised concerns about its financial stability.
“We continue to evaluate alternatives to improve our liquidity and address our capital structure to achieve our growth plans. We will provide further updates if and when appropriate, but do not plan to comment on this further,” said Kutua.
Cutting costs across production and operations
The company reported two consecutive quarters of year-over-year net revenue growth after nine quarters of decline, with Q4 2024 net revenues up 4% to $76.7 million.
Brown and Kutua attributed Beyond Meat’s growth to operational efficiencies, strong performance in foodservice, new product launches and international expansion in Europe and the Middle East.
Beyond Meat will build on these trends by continuing to streamline its production network and improving operations with goals to increase gross margins by 20% in 2025 compared to 2024. To do this, the company will tap additional funding from the ATM program. For example, the company reduced its co-packers from 13 to one internal manufacturing site and one co-packer, which CEO Ethan Brown described as “repairing the bicycle while you’re riding it.”
The company will make “incremental investments” across its facilities to increase automation and equipment, in addition to developing an RFP (request for proposal) for materials and ingredients, Brown said.
Additionally, Beyond Meat laid off employees to cut costs and suspended operations in China, which should give the company a leg up for the “eventual upturn of the sector,” Kutua said.
Brown noted that Beyond Meat lost some distribution due to the switch from fresh to frozen “in a major customer,” which impacted its Q1 numbers, but said the company aims to regain momentum through the second quarter.
Plant-based proteins are climbing up the ‘slope of enlightenment’
Beyond Meat continues to address the decline in consumer perception of plant-based foods through certifications to bolster credibility and consumer education.
Last month, Beyond Meat announced its line expansion for its Beyond Steak products in pre-seasoned flavors include chimichurri and Korean BBQ-style. Each serving contains 20 grams of protein, 1 gram of saturated fat and certified by several health associations like American Heart Association’s Heart-Check program, American Diabetes Association’s Better Choices for Life program and verified by Non-GMO Project.
The company also is pushing back against narratives that plant-based products are overly processed with Brown expressing frustration over the politicization of the category.
“It is extraordinarily important to me that this product furthers human health. And so it is with much frustration that I hear these industry lobbyists,” disparage Beyond Meat’s efforts, Brown said.
Despite category declines, Brown maintains that “the catalyst for the growth of this category is the truth.”
Along with Beyond Meat’s certifications, the company’s product “is simple” and despite the noise around the plant-based meat category, the industry is headed out of the “trough” and into the “slope of enlightenment,” Brown explained.
“What will bring the consumer back is a fundamental understanding that this is a very simple and clean product that tastes great and it’s really good for you,” he added.
