Beyond Meat provided plant-based meat sceptics yet more ammunition today as it revealed plunging second-quarter sales of almost a third, driven by shoppers’ diminishing appetite for the category.

Revenues at the group came in $45m (£35.5m) lower than for the same three months a year ago at $102.1m (£80.4m) as volumes disappeared, with Beyond blaming “weak category demand”.

The pain was mostly felt in its core domestic US market, where year-on-year sales fell by 40%. However, international markets – where it has fared better (indeed, the brand grew in the UK last year, albeit from a small base) – didn’t offer much relief either, as the top line fell 9%.

Beyond was forced to dial back its expectations for 2023 as a whole, dropping sales forecasts from previous guidance of $375m-$425m to $360m-$380m, which is also below analyst consensus of $388m (£305.7m).

Predictably, the markets were not impressed by the unloved stock, with shares collapsing 17% in pre-trading even before the New York bell rang. As the Nasdaq opened this afternoon (UK time), the share price fell 19.5% to $12.30, embarrassingly below the dizzying heights of the $234-a-share hit shortly after the dazzling 2019 IPO, when it floated at $25 a share.

And like its plant-based peer Oatly – which also last month hastily downgraded annual projections on disappointing results – Beyond is now worth considerably less than $1bn.

The vegan food bubble may not have burst yet

It’s hard not to detect a trace of glee in some quarters at the travails of the two sector giants – as once blockbuster valuations usually reserved for tech stocks evaporated – and of the troubles facing the category as a whole.

The vegan bubble may not have quite burst just yet, but there is no doubt it is deflating dramatically. It seems barely a week goes by without more bad news for category players, whether it is the spectacular implosion of Meatless Farm or Samworth shuttering its plant-based division.

In very simple terms, Beyond – and others – are just not bringing in enough consumers to an incredibly crowded category to make business viable or sustainable.

All these brands want to change the world, but the revolution has not happened – not yet, at least.

Whereas shoppers in supermarkets were once happy to experiment with new products, an aggressive and stubbornly long-lasting cost of living crisis has seen them think harder about switching from cheaper traditional protein sources to more climate-friendly plant-based options.

It’s a picture that has been repeated in the foodservice sector, where a boom had been expected. Instead the likes of McDonald’s – which has already pulled its Beyond-developed McPlant in the US – have rowed back from added complexity in the supply chain.

Beyond’s foodservice sales in the US fell 45% in Q2 – though it only dipped 0.9% internationally, where volumes actually increased 19% as markets in Europe, particularly Germany, saw more sales success in fast food chains.

Alongside difficulties convincing shoppers to loosen tight purse-strings, plant-based brands are also combating increased concerns about the health impact of ultra-processed products.

A plant-based burger may be good for the planet, but is it fit for human consumption?

It’s a question Beyond CEO Ethan Brown openly acknowledged in a call with analysts, while also hinting at shadowy forces in play from the powerful meat lobby.

“This change in perception is not without encouragement from interest groups who have succeeded in seeding doubt and fear around the ingredients and process used to create our and other plant-based meats,” he said.

Bernstein analyst Alexia Howard noted that the brand recognised a need to “proactively improve the messaging to US consumers around the health benefits of plant-based meat relative to animal meat”.

Beyond has also launched a new “goodness” focused marketing campaign to get its message across.

Have vegan and veggie brands oversaturated the market? 

“It remains to be seen whether this will be sufficient to win US consumers back to its upgraded retail and foodservice product portfolio,” Howard added.

Longer-term, the alt-meat category is not going anywhere. The majority of consumers want to reduce meat consumption amid health and climate worries. The ambitions of Beyond and other plant-based pioneers to reduce the reliance on intensive animal farming methods and lower carbon emissions drastically could not be more necessary as we move from global warming to global boiling.

“As we look to the future, we remain steadfast in our belief that plant-based meat, and Beyond Meat specifically, will play an important part of the global response to a climate crisis that appears to be rapidly intensifying, while also delivering health benefits to the individual consumer,” Brown said today.

But brands such as Beyond may have to face up to the reality that they have overreached with their sales projections and that aping meat products might not be the solution.

Nutritious whole foods, such as beans, ably championed by the likes of Bold Bean Co, or ancient products such as tempeh, that don’t rely on a chemistry set cocktail of unpronounceable ingredients, may offer clues as to the direction of travel for the future of the sector. This will of course be the subject of fierce arguments between alt-meat believers and plant-based sceptics.

What is not up for debate is that today’s results from Beyond will be by no means the last piece of painful news emerging from plant-based category, with consolidation and further casualties almost guaranteed.