Meatless burger patty and sausage pioneer Beyond Meat has reported less-than-bullish revenues during its Q4 2021 review with the company expecting to “substantially moderate” the growth of its operating expenses in 2022.
While net revenues closed at US$100.7 million – a decrease of 1.2% year-over-year – the alt-protein player recorded a net loss of US$80.4 million for the fiscal year ended December 31, 2021.
Last year, the company made significant headway in foodservice, with the launch of KFC Beyond Fried Chicken and an expanded pilot for McDonald’s McPlant burger, made with the Beyond Burger plant-based patty.
However, despite these promising developments and plans to issue cuts on spending, the company’s stock fell 11% in extended trading as its 2022 revenue outlook dropped.
Fourth quarter performance
Beyond Meat’s net revenues decreased 1.2% to US$100.7 million in the fourth quarter of 2021, compared to US$101.9 million in the year-ago period.
The company’s fourth-quarter net loss of US$80.37 million equates US$1.27 per share, which is larger than its loss of US$25.08 million, or US$0.40 per share, a year earlier.
The company’s executive leadership commented that these higher costs resulted from the business’ decision to leverage more expensive co-manufacturing facilities instead of its own manufacturing plants for production.
While this ultimately led to higher costs, this pivot also meant the company had to fork out over higher transportation and logistics fees.
“This allocation was the right decision, given the long-term importance of the supported projects,” Brown comments, adding that the company expects to “substantially moderate” the growth of its operating expenses in 2022, which could help steer it back to profitability.
Foodservice gains dampened by retail disruption
It has reached out to the company for further comment on the outlook.
“In 2021 we saw strong growth in our international channel net revenues, as well as sporadic yet promising signs of a resumption of growth in US foodservice channel net revenues as COVID-19 variants peaked and declined,” remarks Beyond Meat president and CEO, Ethan Brown.
“These gains, however, were dampened by what we believe to be a temporary disruption in US retail growth, for our brand and the broader category,” he concedes.
“Despite the variability and challenges of the year, we did not deviate from building the foundation for our long-term growth. The investments we made in our team, infrastructure, and capabilities across the US, EU and China, as well as extensive product scaling activities for key strategic partners, weighed heavily on operating expenses and gross margin during a fourth quarter and year that were already impacted by lower than expected volumes.”
Brown believes these investments will be “instrumental” in driving Beyond Meat’s long-term growth.
Beyond Meat’s reported increases in US foodservice and international channel net revenues were primarily attributable to higher demand from existing outlets, new product introductions and expansion of distribution, partially offset by increased trade discounts.
But these wins were “more than offset” by reduced US retail channel net revenues, which decreased by 19.5% compared to the year-ago period, the company reports.
The decrease in US retail channel net revenues primarily reflected softer demand, five fewer shipping days in the fourth quarter of 2021 compared to the year-ago period, increased trade discounts, and, to a lesser extent, loss of market share.
In aggregate, net revenue per pound of US$5.19 during the fourth quarter of 2021 decreased approximately 7% compared to the year-ago period.
