Dive Brief:
- Amid 287% net revenue growth in the second quarter, Beyond Meat, the maker of a plant-based meat alternative, is confident it can keep pace with demand in the near-term, but is also planning major spending to keep pace going forward.
- Beyond Meat will end the year with a nearly 100% increase in internal extrusion capacity — an essential part of the manufacturing process and a previous production bottleneck, CEO Ethan Brown told analysts on the company's Monday earnings call. So far this summer, stock levels have been much improved compared to grilling season for the last two years, Brown said.
- Despite confidence in existing production capacity, Beyond Meat will nearly double capital expenditures in 2020 (from $20 million this year) to bring even more of the production process in house. Brown said the company will add "significant square footage" to its Missouri production facility next year, but is still adding new co-packing partners to keep up with growth.
Dive Insight:
There are three possible bottlenecks in the Beyond Meat's supply chain, the CEO explained: protein sourcing; extrusion, which the company does in-house; and production, where the materials are formed into sausages and patties by a third party.
Brown said the protein supply, which includes peas, rice and mung beans, is secure into 2020 and new players — he named Dupont as one — are entering the market. Internal extrusion capacity will double by the end of the year and the team has signed up new downstream production partners for the final phase before the grocery shelf or restaurant. Internal capacity, said Brown, is essential to meeting the company's goal of underpricing meat in multiple categories.
With $20 million invested in production capacity this year and $35 million to $40 million next year, some supply interruptions are still possible as the company launched new variations on the plant-based meat theme.
"We're introducing new products, and sometimes that will lead to changes in lines and things of that nature that may create a temporary shortage in a particular product line. But overall, I feel much differently and much better than I did six months ago regarding each of those three areas," Brown said.
Despite the continued threat of growing pains, Brown said the company is still committed to transparency and consumers are welcome to visit Beyond's Missouri factory.
