Packs of Beyond Meat plant-based burger patties are displayed for sale.
Paul Yeung | Bloomberg via Getty Images
Beyond Meat has poached two industry veterans from Tyson Foods for executive positions as it prepares for high-profile launches next year.
Doug Ramsey will assume the role of chief operating officer. He spent three decades at Tyson, overseeing its poultry and McDonald’s businesses. His experience with the fast-food giant will be an asset for Beyond, which signed a three-year global deal with McDonald’s earlier this year. Beyond also has partnerships with Taco Bell owner Yum Brands and PepsiCo.
Beyond’s former COO, Sanjay Shah, left the company in September after less than two years in the role for a position with delivery service Gopuff. Shah’s resume included time at Tesla and Amazon but no food or beverage companies.
In addition to Shah’s successor, Bernie Adcock will join as chief supply chain officer, a new role for Beyond, and will report to Ramsey. He also worked at Tyson for more than 30 years, focusing on operations and supply chain management.
“[Ramsey and Adcock] understand better than almost anybody the large-scale production of protein at a cost structure that everyday consumers can afford,” Beyond Meat CEO Ethan Brown said in an interview.
‘Growth on the table’
“Everything we have going, whether it’s the partnership with McDonald’s, with Yum, with PepsiCo, there’s an enormous amount of growth on the table, and we need to make sure we have the very best in operational and supply chain capabilities available to us and our customers,” he added.
Tyson and Beyond have a history. Before Beyond’s initial public offering, Tyson was an investor in the company but sold its stake as it prepared to release its own line of meat alternatives.
Shares of Beyond closed Tuesday up nearly 6% at $71.25. The stock has fallen 43% so far this year, dragging its market value down to $4.5 billion.
Investors have punished the stock as slowing grocery demand has failed to offset the Covid pandemic’s damage to its food service business. Short interest has also doubled since July, according to FactSet data, with some 36% of shares sold short.
In its most recent quarter, the company also faced operational and supply chain issues that weakened its sales. U.S. revenue fell 13.9% to $67.5 million during those three months.
Brown is more optimistic about next year, but the company hasn’t provided a forecast yet for 2022. For the fourth quarter, Beyond is predicting net sales of $85 million to $100 million with the expectation that operational challenges will continue to weigh on its results.
“I think what we’re going to see next year gives us an opportunity to really speak to the consumer again, given the number of launches that we’re going to have and the potential to create excitement in the retail space because of those activities,” Brown said.
Launches with McDonald’s, PepsiCo ahead
McDonald’s is running an operational test of its McPlant burger made with Beyond’s beef substitute in a handful of U.S. restaurants and has begun selling the meat-free entree in several international markets. PepsiCo CEO Ramon Laguarta told CNBC in September that the company is hoping to release new plant-based food and beverages made through its joint venture with Beyond in early 2022.
A sign promoting McDonald’s “PLT” burger with a Beyond Meat plant-based patty at one of 28 test restaurant locations in London, Ontario, Canada October 2, 2019.
Moe Doiron | Reuters
As inflation concerns hit home for both companies and consumers, rising prices give Beyond more room to run with its price parity goals of underpricing its animal meat competitors in at least one type of meat by 2024, Brown said. Beef prices are surging while the company is looking to strip costs from its system, he said.
“Right now we have the opportunity to go back, particularly in the U.S. and create a much more efficient production system,” Brown said, adding, “Overall, the inflationary prices you’re seeing, pressures you’re seeing in the protein market, will favor us.”
And as the coronavirus omicron variant remains an unknown for the future, the company is prepared to face potential challenges and rely on maximizing existing product offerings, Brown said. The company has introduced more than a dozen retail and food service products in the U.S. and abroad over the last two years. The pandemic whipsawed its business, first boosting retail sales as consumers pantry-loaded, but then hurting its food service sales as restaurants shuttered.
“I think that what we’ll do [in the face of pandemic-related challenges] is emphasize the product we’ve already commercialized, because trying to scale during the pandemic and introduce new products can be challenging,” he said.