EL SEGUNDO, CALIF. — A further deceleration in plant-based meat alternative sales has impacted Beyond Meat, Inc., leading to a greater loss than during the same period for the previous year. The company now is “pivoting” to adjust to consumers trading down and opting for less expensive animal-based options.

“The household penetration for the plant-based meat category, according to Numerator data, slipped for a second consecutive quarter falling roughly 20 basis points versus second quarter of 2022,” said Ethan Brown, president and chief executive officer, during a Nov. 9 conference call to discuss third-quarter results.

For the quarter ended Oct. 1, the company recorded a loss of $101.7 million, greater than the same period of the previous year when the company recorded a loss of $54.8 million.

Quarterly sales fell 22.5% to $82.5 million. The sales decline was driven by a 12.8% decrease in total pounds sold and an approximately 11.2% decrease in net revenue per pound, according to the company. The weak demand and changes made by distributors to inventory levels contributed to the fall in sales.

Management blamed “a challenging macro environment” for the slowdown and is focused on maintaining near-term operations.

“(The) path forward in this environment is clear and it at its foundation is a pivot from the growth above all operating model that has characterized our business to date to one that prioritizes positive cash flow and sustainable growth,” Mr. Brown said. “This strategic shift is designed to stabilize the business, nurture our most important growth paths and position us to drive and capitalize on renewed category growth as the economy emerges from its current state.”

Initiatives underway include a reduction in operating expenses, including workforce reductions, and not filling open positions, a focus on inventory management activities, and sales and marketing programs focused on segments that have near-term growth and are viewed as long-term opportunities.

“We are significantly reducing operating expenses while focusing on a more narrow set of strategic partners, retail and foodservice opportunities and utilizing lean value streams across our beef, pork and poultry platforms,” Mr. Brown said.

The company has reduced its workforce twice, in August and October, and has eliminated approximately 240 positions. Beyond Meat also is rationalizing its production network with more moderate volume assumptions to improve overhead absorptions, address underutilization fees and support margin improvement.

As the company manages down its inventory and rationalizes its production network it also is focused on maximizing cash flow generation.

“Specifically, in the context of a more limited number of segments, we are testing a pricing reduction that more quickly collapses the pricing delta between one of our core products and its animal protein equivalent,” Mr. Brown said. “We are implementing these programs in a highly targeted manner where we believe doing so will welcome new points of distribution and new consumers to our brand while increasing volumes throughout our facilities and network.

“We expect these activities to accelerate our drawdown of inventory, which we already reduced by nearly $37 million since the end of Q1 and free up cash.”

Product innovation also will play a role in the pivot, said Mr. Brown.

“In retail, we plan to restore growth to our core product offerings, burgers, beef and dinner sausage in the refrigerated set through exciting product renovation, and to leverage and support these renovations by pursuing distribution expansion, certain aforementioned strategic pricing activities and targeted marketing,” he said. “These products which generally carry the highest margins across our product portfolio account for roughly three-quarters of our total gross revenues and the majority of our retail gross revenues.”

“New” products in the pipeline include improved iterations of the Beyond Burger and the Beyond Sausage. An analyst on the call asked why Beyond Meat was not more focused on prepared foods featuring plant-based meat alternatives and Mr. Brown said, “the consumers want to do this. They just don’t want to pay more for it, right?” He added that he would not rule out the introduction of more prepared items in the future.

“I'm not going to walk away from that massive global opportunity around beef, pork and poultry … because I’m certain that as we hit price parity with that, as the products become indistinguishable as the climate situation worsens, as people get a clear sense of what the real health benefits are, and, I want to actually just use this as a moment to talk about that real health benefits are of our products,” Mr. Brown said. “This conversion will happen.”

For the first nine months of the fiscal year Beyond Meat lost $299.3 million, up significantly from the same period last year when the company recorded a loss of $101.7 million.

Sales for the period fell to $339 million from $364 million.