Beyond Meat is an interesting analysis to uncover what are the fundamental issues at play when a company with highly touted ESG credentials misses the mark on earnings. Our Key Drivers analytics point to three primary drivers: CapEx, Guidance, and Margin.

Sam Leavitt
October 28, 2021

Key Drivers Spotlight: Beyond Meat—Where's the Beef?

Key Drivers Spotlight: Beyond Meat—Where's the Beef?

Beyond Meat (BYND) had been cooking up great returns for investors in the early going as a publicly traded company. Over the past decade Beyond Meat has become one of the more recognizable meat substitutes in the food industry. The meat substitute company was founded in 2009 as an answer to the resource intensive needs of the meat industry, and went public in May 2019. What happens though when a company with highly touted ESG credentials misses the mark on earnings?

Using Amenity’s Key Drivers solution, we take a look at recent performance issues and changing business fundamentals that has investors questioning the plant-based food company. (In a first for Amenity, we also went into the field to test Beyond’s products vs the competition yielding some interesting results.)

Amenity Key Drivers allow investors to identify and aggregate a set of fundamental business events that influence stock price, like buybacks, CapEx, new offerings, market position, product launches, M&A activity, regulatory issues, margin pressure, competition, and deceptive management language.

Just as a company with sound business fundamentals may experience a poor ESG outlook, the opposite can be true: a company with a strong ESG outlook experiencing lackluster business performance. For this analysis, we applied the Guidance Tracker to capture commentary in earnings calls containing financial guidance and forward looking language. We also used our Margin Tracker which tags all relevant commentary around favorable and unfavorable changes in margins such as growth, shrinkage, expansion, and contraction. Additionally, we spent some time reviewing CapEx that shows us how the company is spending their money and gives us insight into long-term strategy.

The Meat of the Matter

Looking at our chart below, problems start for the company in early 2020 when Key Drivers scores on Guidance and Margin start to dip, highlighting that the problems Beyond Meat are facing now have deep roots. However, recent months in particular have not been kind to the company. Beyond’s stock is down 21% in the past three months and this week Credit Suisse downgraded the stock, citing “deeper problems that won’t be quick to fix.”

Out of 103 companies in the Packaged Food and Meats sub-industry on our Key Drivers Dashboard, Beyond ranks 93rd in overall sentiment over the past 90 days. So, what exactly went wrong? How did a company with so much momentum and excitement a few years ago, experience such a setback in recent months? Our analytics point to three primary drivers: CapEx, Guidance, and Margin.

Key Drivers Platform: Beyond Meat CapEx, Guidance, Margin and Amenity Scores, 2019-Q2 to 2021-Q3


Beyond Meat’s CapEx sentiment has hit an all time low. In our Key Drivers model, increased spending will have a negative sentiment. This is a directional indicator that shows that Beyond is pushing a lot of money into their operations along with research and development. It is worth noting that if that spending results in positive results in the long-run, the overall sentiment will equalize. In this case, the research and development is largely concentrated around expanding new product lines (Quote A).

Quote A
“In terms of profitability, as Ethan stated, we are continuing to invest in support of our long-term growth strategy…. in preparation for new product innovations we hope to commercialize in the near future.” — Q2 2021 Earnings Call, 8/05/2021

In their most recent six month period reported, Beyond stated their CapEx was $51 million doubling their previous mark of $26 million. Beyond is clearly making a long term bet that new product lines will increase their total addressable market, and boost revenue in the long run. However, as the following Key Drivers show, this spending has not managed to grow Beyond Meat’s market share as of late, which was a key element in their recent downgrade.

Guidance and Margins

In their latest Earnings Call, Beyond Meat announced their margins had deteriorated further, causing them to reduce their revenues outlook (Quote B below). A miss on guidance is one of the most negative events that our Key Drivers model picks up. Beyond attributes the miss to an industry-wide restaurant downturn during the pandemic that has hampered growth (Quote C). Additionally, one of their major production centers is in China and supply chain issues are eating into their margins.

Interestingly, one of their primary competitors, Impossible Foods, has been more resilient to these headwinds. This is likely due to consistent revenue from their partnership with Burger King (Restaurant Brands International (RBI)). This type of partnership ensures steady sales volume and market exposure.

In Beyond’s latest earnings call the company notes they are discussing partnerships with groups like McDonald’s, but they are still in the very early stages. The products Beyond are making for the fast food giant have yet to become widely available on menus. In fact, analysts that downgraded Beyond this week doubt that those conceptual items may ever be widely available on menus for McDonald’s.

Quote B
“So as we said in our remarks, the primary drivers of our gross margin deterioration to adjusted gross margin deterioration, were really around fixed overhead, transportation and depreciation and amortization.” — Q2 2021 Earnings Call, 8/05/2021
Quote C
“In addition, general near-term concerns around rising COVID-19 infection rates could also have a dampening effect on Foodservice demand.” — Q2 2021 Earnings Call, 8/05/2021

Taste Test Attempt Highlighted the Issues

A blog post on meat substitutes practically demands some field research. In order to test Beyond Meat’s penetration into the Brooklyn market I started a search through the delivery apps. While this test had a non-statistically significant sample size, I ran into many of the same issues that were discussed in their earnings call!

Namely, burgers featuring Beyond’s product were very difficult to find. The Impossible burger, in contrast, was right at the top of the app because of the Burger King partnership. Another interesting note is that many of the restaurants opted to serve neither burger on their menus, instead preferring to make in-house vegan burgers. Beyond is already struggling to build consumer loyalty, and that process might be complicated if restaurants opt to develop their own replacements going forward.

In the end I succeeded in placing an order, but only after trying a few different restaurants that canceled because they were out of stock of Beyond burgers.


The food and restaurant industry, like many industries, is a hard industry for a new company to find success. Unlike companies in the Energy or Capital Goods space who have robust intellectual properties consisting of patents and engineering processes, food companies only have their recipes and marketing as key differentiators. Recipes can be reverse-engineered with some efficacy. and generally speaking, can be unlocked at a cheaper cost than some other industries processes.

Food products rely heavily on market penetration and sales. Even though a company may have a good ESG narrative and metrics, it can be hard to succeed on that alone. As we see from Beyond Meat, it takes more effort to succeed in the market today, especially with substitutes and competitors around to eat into that market share.


For those interested in the non-scientific part of this story, the taste test news was encouraging. When going head-to-head against an Impossible burger I would give the slight edge to Beyond as it was a bit juicier and the Impossible burger a little dry. The comparison is slightly skewed since Burger King’s preparation is meant to closely mimic their own burger. However, the Impossible burger was easier to find for a quick order.

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About Amenity

Amenity Analytics is the industry leader in providing insights from unstructured text by using Natural Language Processing (NLP) assisted by Artificial Intelligence (AI) and Machine Learning (ML). Amenity’s NLP system is a sector-agnostic, language-dependent tool for quantitative text analysis that is deployed across the financial services industry and beyond.

This communication does not represent investment advice. Transcript text provided by FACTSET and S&P Global Market Intelligence.

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