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Vegan burger maker Beyond Meat said its sales collapsed by nearly a third as cash-strapped shoppers turned to cheaper options.
The plant-based food manufacturer, which supplies McDonald’s for its McPlant burger, suffered a 30.5pc slump in revenues in the second quarter of the year.
The vegan venture capitalist darling suffered a 12pc decline in its share price in after-hours trading as it lowered its revenue forecast for the year.
Its shares are on target to open below $13 in New York, having been valued at $234 in 2019.
The company said it had been affected by “softer demand in the plant-based meat category, high inflation, rising interest rates, and ongoing concerns about the likelihood of a recession”.
A study by Which? last year found that plant-based alternatives to sausages were regularly double the price of animal meat.
Beyond Meat president and chief executive Ethan Brown also admitted that the company is struggling to appeal to new customers because of perceptions that its products are unhealthy and overly processed.
He said an advertising campaign launched last week will better explain its “clean and simple” manufacturing process and highlight the products’ health credentials.
He said: “It is an education issue. The facts are there. The health benefits of our products are very strong.”
In a conference call with investors, Beyond Meat president and chief executive Ethan Brown said the company had reached out to some of its competitors to discuss working together on ads that would help change perceptions about the category. He said:
The main issue with the category is that it is not bringing in enough new consumers.
The overall pie is not growing and that’s what we need to fix together with other companies.
Beyond Meat reported revenue of $102.1m in the three months to June, which was lower than the $108.7m Wall Street forecast, according to analysts polled by FactSet.
US revenue dropped 40pc as both retail and food service sales weakened. International revenue was down 8.7pc. International food service demand was flat compared to the same period last year, but retail sales were down nearly 16pc.
Beyond Meat makes plant-based burgers and nuggets in a partnership with McDonald’s in Europe, but those products are not offered in the US. Mr Brown said he expects more US fast food restaurants to add plant-based options in the near future.