Beyond Meat (Nasdaq: BYND) fell on Thursday after Chick-fil-A announced that it is testing its first plant-based product on its own, without the firm’s faux meat. The new product, a breaded cauliflower sandwich, is slated to be tested in Denver, Colorado; Charleston, South Carolina; and Greensboro, North Carolina on February 13.
The Los Angeles–based producer’s shares slumped by as much as 8%, erasing some $120 million from its market cap within the day.
Chick-fil-A’s culinary team spent four years designing the sandwich after guests told the company they wanted to eat more vegetables. The restaurant chain tried mushrooms, chickpeas, and chopped vegetables molded into patties but kept coming back to cauliflower because of its mild flavor.
“We explored every corner of the plant-based space in search of the perfect centerpiece for our plant-forward entree,” noted Chick-fil-A exec Stuart Tracy.
Recently, Beyond Meat is apparently simplifying its sales strategy, focusing on just five major grocery stores: Kroger, Walmart, Publix, Costco, and Amazon-owned Whole Foods.
The reduced focus is meant to streamline operations, generate cost savings, and “reverse declining sales,” according to the Wall Street Journal.
Beyond Meat reported a 22.5% year-over-year fall in overall revenue in the third quarter of 2022, as the industry faces decreasing sales. According to a filing with the Securities and Exchange Commission, the company laid off over 200 employees, or nearly 20% of its total global staff, in October, and its share price has dropped roughly 70% in the last year.
“Beyond Meat is executing a full force pivot to a sustainable growth model, emphasizing the achievement of cash flow positive operations within the second half of 2023,” CEO Ethan Brown said in November.
Related to declining sales, Beyond Meat plans to reduce office space at its Southern California headquarters, placing around 53,000 square feet available for sublease. The space is part of the firm’s 280,000-square-foot headquarters where it signed a 12-year lease in 2021.
According to a February survey from Port Washington, New York-based research firm NPD Group, frozen meat substitutes sales declined 3% year on year. Fresh meat substitutes declined 15%.
Recently, Palantir announced its partnership with Beyond Meat, relaying that the producer participated in the tech firm’s FoundryCon.
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