Dive Brief:
- Beyond Meat's restaurant and foodservice revenue spiked 486% to $53.8 million in first half of 2019, compared to $9.2 million in the year-ago period, according to a company release. The company's Q2 earnings were mixed overall, however, sparking a dip in stock prices.
- Beyond's restaurant and foodservice division now rakes in roughly half of the plant-based meat company's revenue, with retail driving $53.7 million.
- The company forecasts Q3 performance to be even stronger thanks to grilling season, but CEO Ethan Brown still warned investors that supply could be an issue with possible "very short-lived outages" on certain products.
Dive Insight:
Beyond Meat CFO Mark Nelson said on an earnings call that robust sales of the brand's signature Beyond Burger, along with growing demand from existing customers and new restaurant deals, powered revenue growth for the quarter.
And despite the threat of supply shortages outlined in Beyond Meat's IPO, the company's streak of major restaurant deals hasn't slowed — perhaps because its supply hiccups pale in comparison to the struggles of rival Impossible Foods. Dunkin', for example, is now offering Beyond Sausage breakfast sandwiches at select Manhattan stores, and plans to take the item nationwide in the future. Tim Hortons is also selling a similar product, though sales from these items aren't yet included in the company's 2019 forecast since they are still in trial stage.
Traction in the breakfast daypart signals future opportunity for Beyond Meat, which so far has staked its claim in lunch and dinner with its Beyond Burger and meat crumbles. Del Taco, which sold 2 million Beyond Tacos in less than two months, announced Monday that its Beyond Tacos helped bolster same-store sales following the launch three months ago. The restaurant also expanded its menu to include two Beyond Burritos. Its Beyond products made up over 7% of sales during Q2. The company expects sustained demand for these products given the strong sales metrics it has seen so far.
But the company still has obstacles ahead. Chipotle CEO Brian Niccol told Bloomberg that Beyond's products don't fit its "food with integrity" standards because they're too processed. Other major players, including McDonald's and Taco Bell, have also balked at plant-based meat. It's possible that these players are waiting to see if the plant-based craze has staying power, and Beyond's growing revenue — which beat Wall Street expectations of $52.7 million at $67.3 million — could help bolster confidence in the category.
Still, some analysts feel that the hype around the company's potential is overblown. Beyond has also yet to turn a profit, and its nagging production issues could prove to be a stumbling block.
