Beyond Meat Revenue Breakdown, Profitability And Margin

Grilling plant-based meat. Image source: Flickr Image.

The reason I am covering Beyond Meat (NASDAQ:BYND) in this article is that it is one of the most interesting companies in the world.

For readers who haven’t heard of Beyond Meat, it’s one of the fastest-growing companies in the United States and possibly in the world, offering a portfolio of revolutionary plant-based meat.

The company literally manufactures meat right out of its factories, but with plant-based protein instead of animal-based meat.

According to Beyond Meat, its technology has enabled consumers to experience the same taste, texture and other sensory attributes of animal-based meat products as the company’s plant-based meat products, but minus all the hormones and antibiotics that are typically found in animal-based products.

The success of Beyond Meat’s breakthrough innovation and the variety of products has positioned the company to directly compete in the $1.4 trillion global meat industry.

That said, this article explores Beyond Meat’s revenue and briefly looks into the company’s different business channels and their respective sales.

Also, we will look at the outlook of the company’s revenue and profitability based on the guidance provided by the company.

Other than revenue, this article also dives into the topics of revenue breakdown by channel and by region (country) as well as margins to see where Beyond Meat’s growth is headed in the United States as well as internationally.

Let’s read on!

Beyond Meat’s Net Revenue And 2023 Outlook

Beyond Meat Total Revenue And 2023 Outlook

Beyond Meat’s net revenues shown in the above chart is the aggregate of net sales generated from all of the company’s distributing channels and is net of all promotions, rebates, and discounts given to customers.

According to the chart, Beyond Meat’s net revenue has been on exponential growth from fiscal 2017 to 2021, recording year-over-year growth rates of 14%, 37%, and 239% for fiscal 2019, 2020, and 2021, respectively.

However, things took a beating in 2022 when net revenue dived 10% year on year.

Moreover, Beyond Meat guided for an even lower revenue for fiscal 2023, topping only $395 million on average and is roughly 6% lower over 2022.

Therefore, if revenue were to go lower in 2023, Beyond Meat will be having declining sales consecutively in 2 years since 2022, driven primarily by weak demand and the impact of high inflation which pushes consumers to trade down into cheaper forms of protein, including animal meat.

While Beyond Meat has suffered some serious setbacks in 2022 due to various issues, including the pandemic and supply chain disruptions, its opportunity ahead is still massive.

According to the data from Fitch Solutions‘ macro research, the meat industry is the largest category in the food sector, generating an estimated sales of approximately $270 billion in the U.S. or $1.4 trillion globally in 2017 alone.

With a total annual sales of only $400 million in 2022, Beyond Meat’s market share in the US and the global meat industry represents less than 1% of the total market share.

With this in context, Beyond Meat’s growth story may have just started.

The opportunities ahead are massive for the company considering that the world has become more health-conscious.

The growing awareness of the negativities associated with eating animal-based products, including climate change and diseases, will only help to bolster Beyond Meat’s expansion into the protein industry.

Beyond Meat’s Revenue By Segment

Beyond Meat Revenue By Segment

Beyond Meat operates in 2 separate segments and they are retail and foodservice.

As of Q4 2022, Beyond Meat’s plant-based products were available at approximately 190,000 retail and foodservice outlets in more than 80 countries worldwide.

Of the 190,000 retail and foodservice outlets, approximately 78,000 retail and 43,000 foodservice outlets, were located in the United States.

That leaves approximately 69,000 retail and foodservice outlets located outside of the U.S. or internationally.

From the perspective of revenue, Beyond Meat’s retail channel is much larger than the foodservice sector, having a revenue figure of more than twice the foodservice channel in 2022.

While Beyond Meat’s retail channel has experienced triple-digit revenue growth prior to 2022, its growth came to a complete stop as of 2022.

As seen, Beyond Meat’s revenue from the retail channel dived below $300 million for the first time since 2020.

Similarly, Beyond Meat’s foodservice channel also declined considerably in 2022 to only $123 million after topping nearly $140 million in 2021.

Beyond Meat’s Revenue By Segment Growth Rates

Beyond Meat Revenue By Segment Growth Rates

As shown, Beyond Meat’s revenue by segment growth was badly affected in 2022, with year-on-year growth rates tumbling to negative values for both distributing channels.

For example, the retail channel revenue growth reported a 9% decline in 2022 while that of the food service channel was a massive -12% compared to a growth of 32% in the prior year.

Prior to 2020, Beyond Meat’s revenue growth in both segments was in triple digits.

However, things changed drastically after 2020.

Since 2020, Beyond Meat’s revenue growth in both segments has significantly slowed.

This is the year when the COVID-19 pandemic started and a host of other issues such as supply chain disruptions and hyperinflation emerged thereafter.

Despite having multiple headwinds, Beyond Meat’s CEO, Ethan Brown remains optimistic about the company’s future and will continue to press forward in providing consumers with great-tasting plant-based meats, made without the use of GMOs, bioengineered ingredients, hormones, antibiotics, and cholesterol, according to its 4th Quarter Earnings Release.

From a comparison perspective, Beyond Meat’s retail channel looks much better than the foodservice channel as the average revenue growth rate came in at 36% between 2020 and 2022 while that of the foodservice channel was -4% for the same period.

Beyond Meat’s Revenue By Region

Beyond Meat Revenue By Region

Beyond Meat breaks down its revenue into 2 regions, namely the U.S. and International.

The International region includes Canada.

As seen, Beyond Meat’s U.S. revenue was nearly 3X higher compared to that of the International region.

For example, Beyond Meat’s U.S. revenue came in at $304 million in 2022 while that of the International region totaled only $115 million.

Therefore, the U.S. has been Beyond Meat’s largest market all these years.

While Beyond Meat’s U.S. revenue experienced incredible growth between 2018 and 2020, it began to slow after topping $325 million in 2020 and reached only $304 million as of 2022.

While U.S. revenue has plummeted in recent years, Beyond Meat’s International revenue rose significantly in 2021 to $146 million, nearly twice the number reported in 2020 despite the COVID-19 headwinds.

In 2022, Beyond Meat’s International revenue tumbled to $115 million compared to the $145 million reported in 2021.

While International revenue growth had significantly slowed in 2022, it was still up 40% from that of 2020, indicating that the headwind may not look as bad as it seems.

Beyond Meat’s Revenue By Region Growth Rates

Beyond Meat Revenue By Region Growth Rates

Prior to 2020, Beyond Meat’s revenue experienced triple digits growth rates in all regions.

However, things changed considerably since 2020.

As seen, Beyond Meat’s revenue growth in the U.S. has considerably slowed and even turned negative consecutively in 2 years since 2020.

On the other hand, the International region looked quite optimistic in 2021 when the revenue growth came in at 77% compared to the negative growth rate of -17% reported in 2020.

The recovery in the International region seen in 2021 did not happen again in 2022 when revenue dived 21% in the same year.

From a comparison perspective, Beyond Meat’s U.S. looks slightly better than the International region as the average revenue growth rate came in at 19% since 2020 while that of the International region was slightly lower at 13% for the same period.

Beyond Meat’s Profitability

Beyond Meat Profitability

Beyond Meat’s profitability took a beating in 2022 when gross profit turned negative for the first time in the last 6 years.

As seen, Beyond Meat’s gross profit totaled -$24 million in 2022 while operating profit and adjusted EBITDA came in at -$343 million and -$278 million, respectively, in the same fiscal year.

Also worth mentioning is Beyond Meat’s worsening losses since 2020 and the results reported in 2022 were probably the worst since 2017.

However, Beyond Meat guided for a positive gross profit for fiscal 2023, illustrating that a looming recovery might be in store for the company in 2023.

While Beyond Meat is expecting a return to profitability in 2023 in terms of gross profit, the operating profit is still expected to be negative at -$210 million.

Therefore, there is a big possibility that Beyond Meat will still be having an operating loss in 2023, but at a lower loss compared to that of 2022.

In short, Beyond Meat was an unprofitable company in 2022 and is anticipated to be so in 2023.

Beyond Meat’s Margins

Beyond Meat Margins

In terms of margins, Beyond Meat’s figures dived significantly in 2022.

For example, Beyond Meat’s gross margin clocked at -6% in 2022, the first negative value reported since 2017.

While operating and EBITDA margins have always been negative, their numbers became worse in 2022, tumbling to record lows of -82% and -66%, respectively.

The worst was probably over for Beyond Meat when the company guided for a positive gross margin in 2023 which is expected to be in the low single digits.

However, the operating margin is anticipated to come in at -53% in 2023, illustrating the huge operating loss that the company is expected to incur in 2023.

Conclusion

While Beyond Meat’s growth had been phenomenal in both the U.S. and the international markets in the past, the company was having a serious setback as of 2022.

This scenario also applies to Beyond Meat’s retail and foodservice channels whose revenue also declined considerably in 2022.

On a consolidated basis, Beyond Meat’s total revenue in 2022 dived significantly and is expected to go even lower in 2023.

Moreover, Beyond Meat’s profitability and margin were at record lows too in 2022.

The good news is that the company expects a positive gross margin in 2023 while operating loss is slightly lower in the same fiscal year.

Therefore, there is a possibility of a recovery in 2023 in terms of profitability and margins for the company.

Despite the setback, Beyond Meat has continued to invest and expand for the long term, according to its CEO.

For Beyond Meat, the company just needs to do what it has been doing while bringing out more product varieties and keeping the world known for its innovative mission of making the world a more livable place.

References and Credits

1. All financial figures in this article were obtained and referenced from Beyond Meat’s financial reports which are available in Beyond Meat SEC filings.

2. Featured images in this article are used under creative commons licenses and sourced from the following websites: Helen Alfvegren and Christoph Scholz.

Beyond Meat vs Impossible Buger

Plant-based meats are all the rage at the moment, with seemingly every restaurant offering either the Beyond or Impossible burger. There’s been a lot of discussion about how the two of them stack up against the real thing.

If you are a big fan of both the Beyond and Impossible burgers and wanted to see how they compared to beef burgers when it came to taste, health, and environmental impact (as well as a variety of other categories) …

Please head out to In-depth Guide to Plant-Based Meats.

Disclosure

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