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Vegan foods pioneer Beyond Meat saw an 18% plunge in first quarter revenues as demand in the category continues to weaken.

The US-based plant burger supplier saw sales in the first three months of the year drop 18% back to $75.6m on volume falls in the US and internationally.

The decrease in net revenues was primarily driven by a 16.1% decrease in volume of products sold, and exacerbated by a 2.3% decrease in net revenue per pound due to increased trade discounts.

US retail sales were down 16% as volumes fell 10.2%, primarily reflecting “demand softness in the category” as well as reduced sales of Beyond Meat Jerky, which is in the process of being discontinued.

US foodservice sales were down 16.2% as volumes plunged by 20.7% due to demand weakness and the loss of distribution for certain items.

International retail was down 12% due to a 12.7% decrease in volume of products sold, primarily reflecting reduced sales of chicken products in the EU and softer demand for certain products in Canada.

Meanwhile, international foodservice channel net revenues decreased 28.7% as volumes dropped 25% due to reduced sales of burger and chicken products.

In addition to the drop in sales, gross margins contracted to 4.9% from 6.7%.

Margins were negatively impacted by lower volume of products sold, and by higher manufacturing costs, including depreciation, higher materials costs and lower net revenues per pound.

Loss from operations was $53.5m on an operating margin of –70.7%, compared to loss from operations of $57.7m and an operating margin of –62.6% a year ago.

Adjusted EBITDA was a loss of $32.9m down from $45.8m last year.

Beyond Meat president and CEO Ethan Brown commented: “In Q1, we made solid progress against our 2024 priorities, including: hitting our first quarter revenue objective; reducing operating expenses and cash consumption year over year; bringing production in-house to reduce costs and improve quality; and commencing shipments of Beyond IV, the fourth generation of Beyond Burger and Beyond Beef, to our customers, to the praise of nutritionists and consumers alike.

“Together with measures we are exploring to bolster our balance sheet, we continue to work to position 2024 as a pivotal year as we strive to achieve sustainable and profitable operations.”

Beyond Meat shares have dropped 13.5% in after-hours trading on the update.

Morning update

Ocado has appointed former BT chief executive Gavin Patterson as a non-executive director.

Patterson has been appointed to Ocado’s board with effect from 1 June 2024 and will also be a member of the people committee and the remuneration committee.

He was most recently at Salesforce Inc, predominantly in the role of president and chief revenue officer, before stepping down in January 2023.

Prior to joining Salesforce, he held multiple senior roles at BT Group, including group CEO between 2013 and 2019.

Ocado said he brings to the board “considerable expertise leading large multinational organisations and highly relevant experience of the global marketplace for platform services”.

Rick Haythornthwaite, chairman of Ocado, said: “I am delighted to welcome Gavin to the Ocado board. He brings valuable perspective and multinational leadership experience to our board at an exciting time in Ocado’s development.”

Tim Steiner, CEO of Ocado, added: “Gavin is a great addition to our Board. Over the past decade we have evolved from being an innovative online grocer in the UK to a global technology business, powering online operations for some of the world’s leading grocery retailers.

“We are also now deploying our unique technology into new sectors and opportunities for the first time. At this important moment, Gavin’s considerable experience at the helm of multinational B2B technology companies will be a valuable asset to our board and leadership team.”

Patterson commented: “I have long been a huge admirer of Ocado and am delighted to join its board. Ocado is a true technology pioneer. It has developed and proven applications of AI and robotics that solve some of the most complex supply chain challenges in grocery and logistics. I look forward to working with the board and the leadership team at this exciting time.”

On the markets this morning, the FTSE 100 has opened flat at 8,353.7pts.

Early risers include Glanbia, up 3.5% to €18.27, Naked Wines, up 3.2% to 51.9p and PZ Cussons, up 2.4% to 104.6p.

Fallers include Pets at Home, down 1.1% to 295p, McBride, down 0.7% to 107.7p and Just Eat, down 0.5% to 1,138p.

Yesterday in the City

The FTSE 100 closed up another 0.5% to 8,354.1pts yesterday.

In Brussels, AB InBev ended the day up 4% at €58.78 after posting better than expected first quarter sales figures.

UK risers included AG Barr, up 2.1% to 590p, Marks & Spencer, up 1.9% to 266.1p, C&C Group, up 1.9% to 171p, Diageo, up 1.9% to 2,808p, Greggs, up 1.7% to 2,812p and Cranswick, up 1.6% to 4,370p.

Fallers included Virgin Wines, down 4.2% to 46p, Naked Wines, down 4% to 50.3p, Ocado, down 3.9% to 345.9p, Bakkavor, down 2.5% to 118p and Deliveroo, down 2.2% to 125.8p.