Beyond’s self-inflicted wounds

With all the chatter about Beyond Meat (or is it just Beyond now?) maybe/probably filing for Chapter 11 bankruptcy, political and dietary carnivores are licking their chops waiting for their chance to pile on the company. The meat industry uses Beyond as a proxy for the alt-meat sector as a whole and points to Beyond as an example of how alt-meats are failing and will soon disappear.

This is misplaced blame on the meat companies’ part. Beyond’s problem isn’t its products. It’s the executives’ complete mucking up of the company’s finances.

In general, Beyond’s plant-based isolates and extracts probably appeal to consumers in about the same proportion as any other faux meat brand. We all experience taste and texture differently; there are Beyond fans who swear by it above all others. Alt-meat food scientists already have made incremental improvements over the years, and will continue to do so until somebody hits on a formulation that appeals to a critical mass of consumers — which I predict they will.

But for most consumers, so far, the verdict clearly is that plant-based meat substitutes overall don’t make the grade. Even Beyond’s nearly 20% year-over-year nosedive in top-line sales in the second quarter, I think, doesn’t mean consumers hate it any more than they harbor feelings about other alt-meat brands.

But Beyond set itself up as a punching bag for the entire industry when it went public in 2019, and has consistently shown up for punishment ever since with its steady drip-drip-drip of bad financial news.

I’ve been writing about companies for decades, and those that run aground do so for the same reasons their predecessors did years ago: They prioritized growth over business fundamentals and believed that their company was destined to ride the hockey stick of sales and profits up and to the right forever. Beyond invested in shiny things like a new headquarters in California and production facilities in China instead of ensuring quality control when It came to the product and maintaining financial discipline. How else to explain signing for over $1 billion in debt financing that comes due all at once, except that they clearly were breathing in their own rarified exhalations?

Unfortunately for Ethan Brown and Beyond, that 2019 IPO means the drama plays out on a world stage with millions watching.

There are plenty of reasons to beat up on Beyond, but its products aren’t among them.