Beyond Meat slashed its annual forecast for the year as its revenues plummeted 30 per cent in the second quarter due to customers becoming more reluctant to buy into pricey fake meat alternatives amid the cost of living crisis.
The US company, which supplies its vegan plant based burger patties to the likes of McDonald’s, said net revenues for the year are now expected to be in the range of approximately $360m to $380m.
The firm reported gross profits of $2.3m (£1.81m) compared to a loss of $6.2m (£4.8m) last year in its second quarter results.
Beyond Meat blamed “softer demand” in the vegan plant-based meat category, high inflation, rising interest rates, and ongoing concerns about the likelihood of a recession for the drop in sales.
Shares plummeted over 20 per cent after the update.
Alternative meat options can sometimes be more costly than the actual meat it is imitating. At Sainsbury’s two beef patties retail for £1.75, while Beyond Meat Burgers cost £4.50.
Earlier this year, rival brand Meatless Farm was rescued from collapse by vegan food maker VFC, after the company was plunged into administration due to a lack of demand.
“Question marks over the health credentials of its product and how processed it is are also a problem given a key driver for the increased adoption of vegan diets in recent years has been people looking to get healthier,” Russ Mould investment director at AJ Bell said.
“Larger diversified food producers are also eating Beyond Meat’s lunch, launching their own plant-based products which, thanks to their scale, they can sell at more attractive price points.”
He added: “In its current state Beyond Meat looks an easier to swallow morsel for one of these competitors who may see continuing value in a brand which, after all, has an attractive supply agreement with fast food giant McDonald’s.”