Beyond Meat’s numerous deals with restaurant chains helped the plant-based meat replacement producer greatly increase its sales, but a steep increase in R&D costs left the company still losing money for the year.
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The El Segundo, California-based company reported a 239 percent year-over-year increase in net revenue for 2019 to a total of $297.9 million. Its net loss for the year was $12.4 million, which was less than half of what it lost a year earlier.
Beyond Meat’s stock price sank more than 6 percent by market close Thursday amid a volatile day of trading. It was down further in after-hours trading.
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The company is expecting to see a sales increase of as much as 71 percent this year.
Beyond Meat's partnerships include deals with Dunkin', KFC, McDonald’s, Subway and Starbucks, which recently made a Beyond Meat, cheddar and egg sandwich a permanent menu item across its Canadian locations. Beyond Meat products are now available in more than 28,000 North American retail stores and 36,000 North American restaurant locations.
“Our outstanding fourth quarter and full-year 2019 results are a testament to the vitality of the movement that we continue to lead," CEO Ethan Brown said.
Beyond Meat also began selling in Costco late last year, and the company said that it produces the four best-selling meat replacement products.
The company nearly broke even during the fourth quarter, with a net loss of $500,000, down from a $7.5 million loss a year earlier. Beyond Meat would have likely hit profitability this year, but it more-than-doubled its research and development costs in 2019, up from $9.6 million to $20.7 million.
The company has pointed to its innovation in four areas — flavor, aroma, appearance and texture — as being key to standing out in the market. Beyond Meat says it spends a greater piece of its net revenue — 6.9 percent — on R&D than major food producers including Nestle, Kellogg, Kraft Heinz and Tyson.
Brown said more than 100 people work at Beyond Meat’s 30,000-square-foot innovation center.
“With our simple objective of building a perfect piece of meat from plants, our greater mission is much larger than us and seeks to address some of the key challenges of our time — improving health and nutrition, enhancing the sustainability of our global food supply, while lowering our environmental impact, and promoting animal welfare,” he said.
Even with its high R&D costs, Brown said the company aims to achieve price parity with real meat on at least one product by 2024.
Going forward, Beyond Meat plans to expand more in Europe and Asia in order to continue driving its sales growth.
Brown said Beyond Meat’s R&D team will continue working on improving its current products, but over time it’s also looking at faux steak, bacon and fresh chicken breast.