Beyond Meat (BYND) founder and CEO Ethan Brown isn't letting challenging industry conditions distract him from his mission to expand the plant-based meat market.
"I think we feel really good about where we are. We've been now public for over five years, and there was this tremendous growth in the category and then a contraction, and Beyond Meat continues to lead. And we think we're going to lead the next phase of growth for the category and for Beyond Meat," Brown said in a live interview on Yahoo Finance following a breakfast meeting inside Nasdaq's headquarters on Wednesday.
The challenges Beyond Meat faces continue to be formidable.
Second quarter sales fell 8.8% from the prior year to $93.2 million, led by an 18.9% drop among food service partners in the US. Sales at US retail locations dropped 7.5% year over year. The company lost $23 million on an adjusted operating income basis.
For the six months ended June 24, Beyond's cash pile fell 24.4% to $144.8 million as the company battles to win market share from traditional meat.
To right the ship, Beyond Meat has overhauled its product line and plans to market aggressively on the health benefits of its offerings.
In late February, Beyond Meat shifted to avocado oil in its signature burger and beef — a move that cut the saturated fat count by 60% compared to the previous version. Prior iterations used a combination of canola oil and refined coconut oil. The company has since made the same switch for its sausages.
Other new ingredients include red lentil and faba bean protein. Previously, the company used a mixture of pea and rice proteins. Overall, Beyond Meat said it reduced the number of ingredients for the products.
The company was also able to secure a label from the American Heart Association that marks the product as a "heart-healthy recipe."
Beyond Meat also showed off a whole muscle steak product to Yahoo Finance that will be packaged to look like filet mignon and priced at a premium.
No launch date was provided.
"Innovation and marketing have laid the foundation for a sales recovery [for Beyond Meat], but it is early. Guidance didn't change, suggesting things are progressing but may take time. The category needs a reputational rebuild. Until then, margin progress is welcome. However, liquidity concerns and a forthcoming balance sheet restructuring keep visibility into the direction of travel limited," said Jefferies analyst Kaumil Gajrawala in a client note.
Gajrawala maintained a Hold rating on Beyond Meat shares, which are down 50% over the past year.
Now, the Street is switching part of its attention to how Beyond Meat restructures its debt pile amid a stretch of losses that has eaten into cash flow.
Beyond Meat has $1.1 billion in convertible debt coming due in 2027.
Said Brown, "The debt, there are restrictions that I have that I can't talk about it, but it's not something that keeps me up. What I'm focused on is continuing to grow the fundamentals of the business. I've become a lean [management] convert."
"The promise that we made when we went into the market is the promise we're going to fulfill, which is there'll be a day when you can have Beyond Meat at a price that is under that of animal protein."
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In the Opening Bid episode below, Impossible Foods CEO Peter McGuinness shares his plans to revive Beyond Meat's plant-based rival.
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email [email protected].