Beyond Meat Inc is headed for an unappetizing second quarter as the plant-based food craze withers in the face of several weak product tests at restaurants and mediocre reviews.
Analysts have slashed forecasts for Beyond Meat’s sales on supply-chain concerns and waning demand that pulled down shares of the plant-based meat maker and peer Oatly Group from their lofty market debut levels.
“Part of the issue with the adoption of the category for new consumers is that you’re not going to change cultural tastes overnight,” Mizuho analyst John Baumgartner said.
“Recruiting your next phase of consumers requires more innovation and better tasting products.”
Estimates for Beyond Meat’s second-quarter revenue has fallen by 10% over the last three months, according to Refinitiv IBES data.
McDonald’s Corp last week became the latest chain not to go through with an immediate broader launch of Beyond Meat products, after concluding its US test of a burger made with the plant-based meat without confirming future plans.
Tests at Panda Express and Yum Brands Inc’s KFC, Pizza Hut and Taco Bell have also yet to lead to a permanent or US-wide launch, while Dunkin, Hardee’s and A&W have discontinued products after launching, according to brokerage Piper Sandler.
Reviews for Beyond Meat’s plant-based jerky also indicates skepticism about the taste of the product, stoking concerns about the sustainability of its sales momentum, Piper Sandler analyst Michael Lavery wrote in a note on Friday.
The company has had to discount more to encourage inflation-hit consumers to pick up its products over those of competitors at grocers, leading analysts to say its expectation for average revenue growth of 27% for 2022 now appears steep.
News by Reutersedited by Donna Ahern, Checkout. For more A-brands stories, click here. Click subscribe to sign up for the Checkout print edition.