Beyond Meat, a leading plant-based meat maker, has signed multi-year supply deals with McDonald’s and Taco Bell owner Yum! Brands as it reported losing money for the second quarter in a row.
The Los Angeles-based company, founded by Ethan Brown in 2009, reported its fiscal fourth-quarter net loss of US$25.1 million, widening its annual net loss to US$52.8 million. It has not made an annual profit since its initial public offering in 2019.
Beyond is facing intense competition from Impossible Foods, which earlier this month announced its third double-digit price cut in less than a year — 20 per cent off patties and 12-ounce packages in thousands of stores across the US, including Walmart, Kroger, Publix Super Markets, Safeway, Sprouts Farmers Market, Target and Trader Joe’s.
“I am proud of our 2020 achievements in light of the significant challenges we faced, primarily in our foodservice channel, as a result of the COVID-19 pandemic. For the full year, we grew total net revenues 37 per cent, with sales to retail customers more than doubling versus the prior year,” said Brown, Beyond Meat President and CEO.
“Although weakened foodservice demand resulting from the global pandemic has impacted our near-term profitability, we continue to press forward with strategic investments in service of our future growth, including the build out of our production facilities in China and Europe, bolstering our research and development capabilities, amplifying our marketing voice, upgrading our IT infrastructure, and, importantly, continuing to build out talented teams across the globe to bring our ambitious goals to fruition.
“Given our view that we are at a pivotal juncture, where we have an opportunity to transition from niche market to mainstream stature with bold, strategic actions, we will continue to invest aggressively in 2021 to accelerate our path towards this objective. I truly believe that plant-based meat has reached a tipping point in terms of its cultural relevance and, critically, the fundamentals underpinning Beyond Meat’s long-term prospects remain robust, with important brand metrics such as household penetration, buyer rates, purchase frequency and repeat rates all registering another quarter of uninterrupted growth.
“My optimism about Beyond Meat’s future therefore remains as solid as ever. As we stay true to our guiding principle of providing consumers with great-tasting plant-based meats, made without the use of GMOs, bioengineered ingredients, hormones, antibiotics or cholesterol, we believe we are on a path to building an enduring global protein company that advances a more sustainable meat supply chain, consumer health and the health of our planet.”
In tempering the losses, Beyond Meat said in a release its three-year global deal with McDonald’s would make it the world’s biggest restaurant chain’s “preferred” supplier for the patty in its new McPlant burger. The two companies will also develop other menu items like plant-based chicken, pork and eggs.
“Our new McPlant platform is all about giving customers more choices when they visit McDonald’s,” said Francesca DeBiase, McDonald’s Executive Vice President and Chief Supply Chain Officer. “We’re excited to work with Beyond Meat to drive innovation in this space, and entering into this strategic agreement is an important step on our journey to bring delicious, high quality, plant-based menu items to our customers.”
Beyond Meat also announced a global strategic partnership with Yum! Brands to “co-create and offer craveable and innovative plant-based protein menu items that can only be found at KFC, Pizza Hut and Taco Bell over the next several years.”
The maker of the Beyond Burger also supplies Starbucks, Denny’s and Dunkin’ Brands.
Beyond Meat reported an increase in net sales of 3.5 per cent to US$101.9 million in the period ended 31 December; however, it had to write off US$3.7 million of inventory associated with food service products that did not sell.