Beyond Meat reduces 2022 revenue outlook, plans to cut 19% of workforce

Beyond Meat is axing its current COO Doug Ramsey, reducing its 2022 revenue outlook, and planning to cut 19% of its global workforce.

Video Transcript

JULIE HYMAN: We got some other movers we got to talk about here this morning. Beyond Meat is one of them. Well, the stock's only down 8/10 of 1% now. I'm a little surprised about that, following in the announcement that Chief Operating Officer Doug Ramsey will leave the company. Remember, he's the guy who got arrested for allegedly biting a man's nose at a-- what was it-- football game, I believe.

It doesn't end there, though. Beyond Meat, it's also reducing-- actually that's probably not the most important thing-- it's reducing its 2022 revenue outlook. That's probably a little more important when we talk about the stock. It's announcing it's going to cut 19% of its workforce. The company had previously talked about cutting some workers.

This is a much bigger number, though, of its workers than it's going to be cutting here. The company overall has just over 1,100 full-time employees, 311 full-time contract workers, as of last December. And it previously had said it was only going to cut 4% of those employees. So obviously, Soz, 19% is a lot more.

BRIAN SOZZI: Yeah, and to be full disclosure, I need to think a little more deeper on what's going on here, beyond now. I'm in these stores, I'm a consumer of this product. I have seen prices under pressure notably in whole foods. I saw their two-package hamburgers selling for $6, and this used to be an almost $9 product about a year ago.

So the discounting has picked up, not just for Beyond, but also rival, Impossible Foods here. This is a complete reset of the cost structure of this company. And you don't get any indication that growth will really accelerate in the fourth quarter, and perhaps into the first half of next year.

It's unclear is this just economically-related, where inflation is so high, people are trading down, this is more expensive product, or is there something deeper going on here, where consumers no longer view this as a true healthy alternative. I'm very unclear on it. But again, this is a complete resetting of the Beyond Meat business model here too. And if they're making this move, best believe Impossible Foods is probably doing the same thing.

BRAD SMITH: Well, I think, here's the thing too. You're seeing at least deceleration and the number of businesses on the food service front, that are adding them to menus. There's been this resetting post-pandemic of what actual menu innovation at some of the food services looks like.

And do they need to partner with Beyond Meat, or is there another strategic play that they do have in order to find a partner that's still offers them a more healthy alternative? Or is it something that they can source and home grow internally, instead of having to go to Beyond Meat? Because it is a more expensive product.

I remember pre-pandemic, when this was the largest growing segment of their business, was the food service. And then they had to shift over quickly into retail service to make sure that they were getting into fridges and freezers. And so now, with that back out-of-food service, that creates another big headwind when it comes to how they're going to grow out from here, going forward, and getting back onto menus, where customers are already trying to figure out, all right, well, do we still need to go out and eat. And if we do go out and eat, are we paying up to get a Beyond Meat burger, or we're just getting something else that's on the menu that still fulfills the experience that we're--

JULIE HYMAN: Yeah, a couple of things I want to say here. First of all, Impossible Foods is laying off employees, reportedly. So it's not something that is limited to Beyond Meat.

Secondly, Beyond Meat isn't just cutting workers, and it's not just CEO Doug Ramsey who's leaving the company, the CFO is leaving the company, the Vice President for Financial Planning and Analysis and Investor Relations, and the President of North America and the Global Chief Growth Officer, all of those folks are gone from the company as of this morning, and that announcement. So that's something to mention. And I think something else that you said is important, the home grown aspect. I think there's a lot of competition here, both from new entrants into the market, and by food service companies, other big food companies that are just making their own version of this stuff, despite the proprietary edge that initially Beyond Meat and Impossible had. That seems to have gone away.