Beyond Meat Struggles to Generate Net Income for Shareholders
Posted on 11/16/2020
Roquette Frères SA is a French-based family owned company which produces more than 650 by-products from the starch extracted from corn, wheat, potatoes, and peas. On January 10, 2020, Beyond Meat and Roquette Frères entered into a multi-year sales agreement pursuant to which Roquette will provide Beyond Meat with plant-based protein. The agreement expires on December 31, 2022; however, it can be terminated after 18 months under certain circumstances. This agreement increases the amount of plant-based protein to be supplied by Roquette in each of 2020, 2021, and 2022 compared to the amount supplied 2019. The total annual amount purchased each year by Beyond Meat must be at least the minimum amount specified in the agreement, which totals in the aggregate US$ 154.1 million over the term of the agreement. As of September 26, 2020, Beyond Meat had committed to purchase pea protein inventory totaling US$ 177.5 million, approximately US$ 36.9 million in the remainder of 2020, US$ 82.1 million in 2021, and US$ 58.5 million in 2022.
In the 9 months ended September 26, 2020, Beyond Meat generated a net income loss of US$ 27.675 million versus a net income loss of US$ 11.991 million in the 9 months ended September 26, 2019. Approximately 16% of the increase in U.S. retail sales was due to the introduction of Beyond Breakfast Sausage during the second quarter of 2020, according to recent filings.