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What changed in BEYOND MEAT, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of BEYOND MEAT, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+623 added−562 removedSource: 10-K (2024-03-01) vs 10-K (2023-03-01)

Top changes in BEYOND MEAT, INC.'s 2023 10-K

623 paragraphs added · 562 removed · 409 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

68 edited+43 added−66 removed49 unchanged
Biggest changeWe are continually reviewing opportunities to optimize our manufacturing capacity across our network, identifying opportunities to increase overall equipment effectiveness, as well as opportunities to leverage our internal manufacturing and co-manufacturer network. • Expand Our Product Offerings The success of our products over the past several years supports our belief that, despite a recent softness in the plant-based category, there will continue to be significant demand for additional plant-based meat products in the long-term.
Biggest changeWe believe increased distribution with a global focus will lead to growing consumer awareness and demand for nutritious, convenient and high protein plant-based foods around the world, leading to an increase in the overall size of the plant-based meat category as more consumers shift their diets away from animal-based proteins. • Invest in Infrastructure and Capabilities We are continually reviewing opportunities to optimize our manufacturing capacity across our network, including identifying opportunities to increase overall equipment effectiveness, leverage our internal manufacturing and co-manufacturer network, and invest in new processes and business management systems to increase automation, improve operating efficiency and enable greater scalability. • Expand Our Product Offerings The success of our products over the past several years supports our belief that, despite a softness in the plant-based meat category over the last two years, there will continue to be significant demand for additional plant-based meat products in the long-term.
We promote employee engagement by organizing various employee activities that are aligned with our mission, including our weekly “Coffee Talk,” a forum for employee engagement with the leadership. • Total Rewards and Pay Philosophy We strive to attract and retain diverse, high-caliber employees who raise the talent bar by offering competitive compensation and benefit packages, regardless of their gender identity, race, age, perspective, or other personal characteristics.
We promote employee engagement by organizing various employee activities that are aligned with our mission, including our weekly “Coffee Talk,” a forum for employee engagement with leadership. • Total Rewards and Pay Philosophy We strive to attract and retain diverse, high-caliber employees who raise the talent bar by offering competitive compensation and benefit packages, regardless of their gender identity, race, age, perspective or other personal characteristics.
In addition to medical benefits, we offer our employees dental and vision coverage, health savings and flexible spending accounts, paid time off, 11 paid company holidays, paid parental leave, bereavement leave, pet bereavement leave, employee assistance programs, a 401(k) retirement savings plan with company matching contributions, voluntary short-term and long-term disability insurance, and life insurance. • Development and Retention We strive to hire, develop and retain outstanding talent that is passionate about changing the world and that continuously raises the performance bar.
In addition to medical benefits, we offer our employees dental and vision coverage, health savings and flexible spending accounts, paid time off, paid company holidays, paid parental leave, bereavement leave, pet bereavement leave, employee assistance programs, a 401(k) retirement savings plan with company matching contributions, voluntary short-term and long-term disability insurance, and life insurance. • Development and Retention We strive to hire, develop and retain outstanding talent that is passionate about changing the world and that continuously raises the performance bar.
Order Fulfillment Our customer service and logistics functions are responsible for customer-facing activities, order management, customer logistics, 3PL leadership and intra-company distribution. We utilize Oracle NetSuite ERP and integration with our 3PL Cloud interface platforms for these processes. Customer orders are principally transmitted via electronic data interface, or EDI, but may be processed manually if necessary.
Order Fulfillment Our customer service and logistics functions are responsible for customer-facing activities, order management, customer logistics, 3PL leadership and intra-company distribution. We utilize Oracle NetSuite ERP, Palantir and integration with our 3PL Cloud interface platforms for these processes. Customer orders are principally transmitted via electronic data interface, or EDI, but may be processed manually if necessary.
In the long-term, we intend to continue to do the following: • Pursue Top-line Growth Across our Distribution Channels We continue to believe that there is a significant opportunity over time to expand our retail and foodservice footprint through distribution expansion, continued innovation and commercialization of new products, increased penetration across channels and into other areas of the retail footprint.
Our Long-Term Growth Strategy In the long-term, we intend to continue to do the following: • Pursue Top-line Growth Across our Distribution Channels We continue to believe that there is a significant opportunity over time to expand our retail and foodservice footprint through distribution expansion, continued innovation and commercialization of new products, increased penetration across channels and into other areas of the retail footprint.
Retail products sold in the meat case, such as the Beyond Burger, Beyond Sausage, Beyond Beef, Beyond Meatballs and Beyond Sausage Links, are shipped to the customer frozen. The customer is provided instructions on ‘slacking,’ which is typically done by moving frozen food to a refrigerator to allow it to slowly and 7 safely thaw before cooking.
Retail products sold in the meat case, such as the Beyond Burger, Beyond Sausage, Beyond Beef, Beyond Meatballs and Beyond Sausage Links, are shipped to the customer frozen. The customer is provided instructions on ‘slacking,’ which is typically done by moving frozen food to a refrigerator to allow it to slowly and safely thaw before cooking.
These platforms allow us to engage with our consumers and directly reach target demographics such as millennials and “Generation Z.” We also leverage our first party data to distribute brand information and news, foster loyalty through unique offers and share recipe content to drive consumption.
These platforms allow us to engage with our consumers and directly reach target demographics such as millennials and “Generation Z.” We also leverage our first party data to distribute brand information and news, foster loyalty through unique offers and share recipe content to drive everyday consumption.
Additional states, including Arkansas, Georgia, Mississippi, Louisiana, Oklahoma, South Dakota and Wyoming, have subsequently passed similar laws, and legislation that would impose specific requirements on the naming of plant-based meat products is currently pending in a number of other states.
Additional states, including Arkansas, Georgia, Mississippi, Louisiana, Oklahoma, South Dakota and Wyoming, have subsequently passed similar laws, and legislation that would impose specific requirements on the naming of plant-based meat products is currently pending in a number of other states, including Arizona.
In 12 the United States, the primary federal agencies governing the manufacture, distribution, labeling and advertising of our products are the FDA and the FTC, and foreign regulatory authorities include Health Canada or the Canadian Food Inspection Agency (“CFIA”) and the authorities of the EU or the EU member states.
In the United States, the primary federal agencies governing the manufacture, distribution, labeling and advertising of our products are the FDA and the FTC, and foreign regulatory authorities include Health Canada or the Canadian Food Inspection Agency (“CFIA”) and the authorities of the EU or the EU member states.
Although most of the raw materials we require are typically readily available from multiple sources, we currently have a limited number of suppliers for the pea protein used in our products. • Supply Agreements We have a multi-year sales agreement with Roquette Frères (“Roquette”) for the supply of pea protein which expires on December 31, 2023.
Although most of the raw materials we require are typically readily available from multiple sources, we currently have a limited number of suppliers for the pea protein used in our products. • Supply Agreements We have a multi-year sales agreement with Roquette Frères (“Roquette”) for the supply of pea protein which expires on December 31, 2025.
We have agreements with third-party service providers for all of our shipping needs. Sales and In-Store Activation • Sales As of December 31, 2022, our sales team is organized into four divisions: retail, foodservice, international and strategic partnerships. Additionally, we have strong support functions with Category Management, Consumer Insights and Analytics, Customer Service and Marketing.
We have agreements with third party service providers for all of our shipping needs. Sales and In-Store Activation • Sales As of December 31, 2023, our sales team is organized into four divisions: retail, foodservice, international and strategic partnerships. Additionally, we have strong support functions with Category Management, Consumer Insights and Analytics, Customer Service and Marketing.
Because such distributors function in an intermediary role, we do not consider them to be direct customers. In addition, we sell directly to customers in the retail and foodservice channels who handle their own distribution. In 2022, DOT Foods, Inc. (“DOT”) accounted for approximately 12% of our gross revenues.
Because such distributors function in an intermediary role, we do not consider them to be direct customers. In addition, we sell directly to customers in the retail and foodservice channels who handle their own distribution. In each of 2023 and 2022, DOT Foods, Inc. (“DOT”) accounted for approximately 12% of our gross revenues.
Orders are accepted in NetSuite, reviewed for accuracy and fulfillment plans are developed. When fulfillment plans are ready, orders are tendered to 3rd party carriers via Manhattan TMS. Metrics for the Customer Service and Logistics team include order fill rates, on-time delivery, customer scorecards as needed and cost leadership.
Orders are accepted in NetSuite, reviewed for accuracy and fulfillment plans are developed. When fulfillment plans are ready, orders are tendered to third party carriers via Manhattan TMS. Metrics for the Customer Service and Logistics team include order fill rates, on-time delivery, customer scorecards as needed and cost leadership.
As of December 2022, Beyond Meat branded products were available in approximately 43,000 foodservice outlets in the United States and 34,000 foodservice outlets internationally. We sell to a variety of customers in the retail and foodservice channels throughout the United States and internationally primarily through distributors who purchase, store, sell and deliver our products.
As of December 2023, Beyond Meat branded products were available in approximately 43,000 foodservice outlets in the United States and 34,000 foodservice outlets internationally. We sell to a variety of customers in the retail and foodservice channels throughout the United States and internationally primarily through distributors who purchase, store, sell and deliver our products.
Seasonality Generally, we expect to experience greater demand for certain of our products during the summer grilling season. In 2022 and 2021, U.S. retail channel net revenues during the second quarter were 16% and 21% higher than the first quarter, respectively.
Seasonality Generally, we expect to experience greater demand for certain of our products during the U.S. summer grilling season. In 2023, 2022 and 2021, U.S. retail channel net revenues during the second quarter were 10%, 16% and 21% higher than the first quarter, respectively.
Government Regulation Along with our co-manufacturers, brokers, distributors and ingredients and packaging suppliers, we are subject to extensive laws and regulations in the United States by federal, state and local government authorities and in Canada, the European Union, the United Kingdom, China and other jurisdictions by foreign authorities.
Government Regulation Along with our co-manufacturers, brokers, distributors and suppliers, we are subject to extensive laws and regulations in the United States by federal, state and local government authorities and in Canada, the European Union, the United Kingdom, China and other jurisdictions by foreign authorities.
We do not believe that the Decree complies with the laws of the European Union, in particular the principle of free movement of goods. On July 27, 2022, at the request of a trade association, the French High Administrative Court partially suspended the execution of the Decree.
We do not believe that the Decree complied with the laws of the European Union, in particular the principle of free movement of goods. On July 27, 2022, at the request of a trade association, the French High Administrative Court partially suspended the execution of the Decree.
We believe the principal competitive factors in our industry are: • taste; • nutritional profile; • ingredients; • texture; • ease of integration into the consumer diet; • low-carbohydrate, low-sugar, high fiber and protein; • lack of cholesterol, gluten and GMOs; • convenience; • price and promotion tactics; • brand awareness and loyalty among consumers; • media spending; • product variety and packaging; • access to major retailer shelf space and retail locations; • access to major foodservice outlets and integration into menus; • innovation; and • intellectual property protection on products.
We believe the principal competitive factors in our industry are: • taste; • price and promotion tactics; ◦ nutritional profile; • ingredients; • texture; • ease of integration into the consumer diet; • low-carbohydrate, low-sugar, high fiber and protein; • lack of cholesterol and GMOs; • convenience; • versatility; • brand awareness and loyalty among consumers; • media spending; • product variety and packaging; • access to major retailer shelf space and retail locations; • access to major foodservice outlets and integration into menus; • innovation; and • intellectual property protection.
This signals that there are indeed serious doubts as to the lawfulness of the Decree, though the suspension is only partial and temporary until the Court rules on the merits of the case. We also note that this prohibition has not been appropriately notified to the European Commission, and that as a result, the prohibition is, in principle, non-enforceable.
This signals that there are indeed serious doubts as to the lawfulness of the Decree, though the suspension is only partial and temporary until the Court rules on the merits of the case. We also note that this prohibition had not been appropriately notified to the European Commission, and that as a result, the prohibition was, in principle, non-enforceable.
Manufacturing As the first step in our manufacturing process a dry blend containing our plant protein is combined within our manufacturing facility. The dry blend then enters our extruder, where both water and steam are added.
Manufacturing As the first step in our manufacturing process a dry blend containing our plant protein is combined within our manufacturing facilities. The dry blend then enters our extruder, where both water and steam are added.
We also intend to use certain social media channels as a means of disclosing information about us and our products to consumers, our customers, investors and the public (e.g., @BeyondMeat, #BeyondBurger and #GoBeyond on Facebook, Instagram and Twitter, and @BeyondMeatOfficial on TikTok).
We also intend to use certain social media channels as a means of disclosing information about us and our products to consumers, our customers, investors and the public (e.g., @BeyondMeat, #BeyondBurger and #GoBeyond on Facebook, Instagram, Threads and X (formerly, Twitter), and @BeyondMeatOfficial on TikTok).
Our Long-Term Growth Strategy In response to the current difficult environment and the negative impact of certain factors on our business and the overall plant-based category, beginning in the fourth quarter of 2022 we are pivoting our focus toward sustainable long-term growth supported by three pillars: (1) driving margin recovery and operating expense reduction through the implementation of lean value streams across our beef, pork and poultry platforms; (2) 4 inventory reduction and cash flow generation through more efficient inventory management; and (3) focusing on near-term retail and foodservice growth drivers while supporting strategic key long-term partners and opportunities.
In response to the current difficult environment and the negative impact of certain factors on our business and the overall plant-based meat category, beginning in 2022 we pivoted our focus toward sustainable long-term growth supported by three pillars: (1) driving margin recovery and operating expense reduction through the implementation of lean value streams across our beef, pork and poultry platforms; (2) inventory reduction and cash flow generation through more efficient inventory management; and (3) focusing on near-term retail and foodservice growth drivers while supporting strategic key long-term partners and opportunities.
Our marketing strategy focuses on driving awareness all the way through to purchase and loyalty. We maintain active social media platforms such as Facebook, Instagram, TikTok and Twitter to build awareness, share news, reach new audiences and engage with our consumers.
Our marketing strategy focuses on driving awareness all the way through to purchase and loyalty. We maintain active social media platforms such as Facebook, Instagram, LinkedIn, Threads, TikTok, X (formerly Twitter) and YouTube to build awareness, share news, reach new audiences and engage with our consumers.
In addition, we are committed to investing in research and development to continue to innovate within our core plant-based platforms of beef, pork and poultry to create exciting new product lines and improve the formulations for our existing portfolio of products.
In addition, we are committed to investing in research and development to continue to innovate within our core plant-based platforms of beef, pork and poultry to create exciting new product lines and improve the formulations for our existing portfolio of products from a taste and nutrition standpoint.
Cost Down Strategy A key component of our business strategy is to continually drive the cost of our products down over time, with the aspiration to eventually price at parity with animal-based protein.
Cost Down Strategy A key component of achieving our long-term business strategy is to drive the cost of our products down over time, with the aspiration to eventually price at parity with animal-based protein.
Our pork platform consists of our line of products that are intended to mimic animal-based pork in its various merchandised forms, including dinner sausage links, breakfast sausage patties and links, and ground pork, among others.
Our pork platform consists of our line of products that are intended to mimic animal-based pork in its various merchandised forms, including dinner sausage links, breakfast sausage patties and links, and ground pork, among others. Our primary products under our pork platform include Beyond Sausage, Beyond Breakfast Sausage Patties, Beyond Breakfast Sausage Links, and Beyond Sausage Crumbles.
As of December 2022, Beyond Meat branded products were available at approximately 190,000 retail and foodservice outlets in more than 80 countries worldwide, across mainstream grocery, mass merchandiser, club store, convenience store and natural retailer channels, and various food-away-from-home channels, including restaurants, foodservice outlets and schools.
As of December 2023, Beyond Meat branded products were available at approximately 133,000 retail and foodservice outlets in more than 65 countries worldwide, across mainstream grocery, mass merchandiser, club store and natural retailer channels, and various food-away-from-home channels, including restaurants, foodservice outlets and schools.
The protein content for our poultry platform products is primarily derived from faba bean protein and wheat gluten. Customers Since the success of the Beyond Burger, we have created a strong presence at leading food retailers across the United States and abroad.
Our primary products under our poultry platform include Beyond Chicken Tenders, Beyond Chicken Nuggets and Beyond Popcorn Chicken. The protein content for our poultry platform products is primarily derived from faba bean protein and wheat gluten. Customers Since the success of the Beyond Burger, we have created a strong presence at leading food retailers across the United States and abroad.
We intend to strengthen our product offerings by improving the formulations for our existing portfolio of products and by creating new products that expand the portfolio. We are continually refining our products to improve their taste, texture, aroma and appearance.
We intend to strengthen our product offerings by improving the formulations for our existing portfolio of products, including the new Beyond IV platform, and by creating new products that expand the portfolio. We are continually refining our products to improve their taste, texture, aroma, appearance and nutrition profile.
The protein content for our beef platform products is primarily derived from one or a combination of pea protein, rice protein, faba bean protein, wheat gluten and mung bean protein.
Our beef platform products contain protein primarily derived from one or a combination of pea protein, rice protein, faba bean protein, wheat gluten and mung bean protein.
Our Mission We are a mission-driven business with long-standing core values. We strive to operate in a transparent, socially responsible and environmentally sustainable manner and are committed to help solve the major health and global environmental issues which we believe are caused in part by an animal-based protein diet and existing industrial livestock production.
We strive to operate in a transparent, socially responsible and environmentally sustainable manner and are committed to help solve the major health and global environmental issues which we believe are caused in part by an animal-based protein diet and existing industrial livestock production.
As of December 2022, Beyond Meat branded products were available in approximately 78,000 retail outlets in the United States and 35,000 retail outlets internationally. We remain focused on expanding our partnerships with foodservice customers over time, including large full-service restaurant (“FSR”) and QSR customers in the United States and abroad.
As of December 2023, Beyond Meat branded products were available in approximately 32,000 retail outlets in the United States, excluding outlets unique to Beyond Meat Jerky, and 36,000 retail outlets internationally. We remain focused on expanding our partnerships with foodservice customers over time, including large full-service restaurant (“FSR”) and QSR customers in the United States and abroad.
In order to sustain the quality of our products, we have implemented a “define, measure, analyze, improve and control,” or DMAIC, approach to improve, optimize and stabilize our processes and design. We depend on co-manufacturers for the manufacturing of some of our products. Our co-manufacturers are currently in various locations throughout the United States, Canada, the Netherlands and China.
In order to sustain the quality of our products, we have implemented a “define, measure, analyze, improve and control,” or DMAIC, approach to improve, optimize and stabilize our processes and design. We depend on co-manufacturers for the manufacturing of some of our products.
The address of the site is http://www.sec.gov. 14 Investors and others should note that Beyond Meat routinely announces material information to investors and the marketplace using SEC filings, press releases, public conference calls, webcasts and the Beyond Meat Investor Relations website.
Investors and others should note that Beyond Meat routinely announces material information to investors and the marketplace using SEC filings, press releases, public conference calls, webcasts and the Beyond Meat Investor Relations website.
As of December 31, 2022, we had two issued patents in the United States and seven issued patents outside the United States (U.K., Indonesia, Canada, China, Chile, Israel and Australia), two pending patent applications in the United States, eight pending international patent applications and one provisional patent application.
As of December 31, 2023, we had three issued patents in the United States, ten issued patents outside the United States (U.K., Indonesia, Canada, China, Chile, Israel (two), Brazil, Japan and Australia), one pending patent application in the United States, five pending international patent applications and two provisional patent applications.
We regularly review and survey our compensation and benefit programs against the market to ensure we remain competitive in our hiring practices. We provide employee salaries that are competitive and consider factors such as an employee’s role and experience, the location of their job and their performance.
We regularly review and survey our compensation and benefit programs against the market to strive to provide fair and equitable pay. We provide employee salaries that we believe are competitive and consider factors such as an employee’s role and experience, the location of their job and their performance.
We believe, if implemented effectively, the use of a lean value stream approach could drive faster speed-to-market of new product launches, which in turn could accelerate our sales growth, increase our pace of reducing our production costs and expanding our gross margin, and enable further operating expense reductions, among others.
We believe, if implemented effectively, the use of a lean value stream approach could drive faster speed-to-market of new product launches, which in turn could accelerate our sales growth, boost our cost of goods sold reduction and gross margin expansion efforts and enable further operating expense reductions, among others.
We recognize that representation and collaboration are vital components to address the challenges that face our planet. We have developed a framework of guiding principles that set the foundation for sustainable Diversity, Equity and Inclusion practices by reducing subjectivity and biases via data-driven decisions and promoting shared ownership for inclusive behaviors and actions across the organization.
We have developed a framework of guiding principles that set the foundation for sustainable Diversity, Equity and Inclusion practices by reducing subjectivity and biases via data-driven decisions and promoting shared ownership for inclusive behaviors and actions across the organization.
We are fortunate to have partnered with a network of brand ambassadors and developed a strong following by celebrities from the worlds of sports and entertainment who share our core values.
We are fortunate to have partnered with a network of brand ambassadors and developed a strong following by celebrities from the worlds of sports and entertainment who share our core values. Their organic involvement and interest are helpful to promote our overall mission and strategic partnerships.
A majority of our products are transported and stored frozen. Frozen products such as Beyond Beef Crumbles and Beyond Breakfast Sausage Patties are intended to be prepared from their frozen state, with cooking instructions enclosed on all packaging.
Frozen products such as Beyond Beef Crumbles, Beyond Breakfast Sausage Patties, Beyond Steak and Beyond Chicken products are intended to be prepared from their frozen state, with cooking instructions printed on all packaging.
Their organic involvement and interest are helpful to promote our overall mission and strategic partnerships. 8 In 2022, we deployed targeted brand campaigns to build awareness, reach new users and drive conversion. Our paid digital initiatives included social, programmatic, podcasts, out-of-home, online video, connected TV, and digital offers and rewards. Competition We operate in a highly competitive environment.
In 2023, we continued to deploy targeted brand campaigns to build awareness, reach new users and drive conversion. Our paid digital initiatives included social, programmatic, podcasts, out-of-home, online video, connected TV, and digital offers and rewards. Competition We operate in a highly competitive environment.
We plan on highlighting our “Go Beyond” message and the global benefits that come with eating our products. We also plan to continue to create relevant content with our network of celebrities, influencers and brand ambassadors, who have successfully built significant brand awareness for us by supporting our mission and products and incorporating Beyond Meat into their daily lifestyle.
We also plan to continue to further drive awareness and relevance of Beyond Meat products with a large scale audience and create relevant content with our network of celebrities, influencers and brand ambassadors, who have successfully built significant brand awareness for us by supporting our mission and products and incorporating Beyond Meat into their daily lifestyle.
We expect to continue to see additional seasonality effects, especially within our retail channel, with revenue contribution from this channel tending to be greater in the second and third quarters of the year, along with increased levels of purchasing by customers ahead of holidays, the impact of customer shelf reset activity and the timing of product restocking by our retail customers.
In general, any historical effects of seasonality have been more pronounced within our U.S. retail channel, with revenue contribution from this channel generally tending to be greater in the second and third quarters of the year, driven by increased levels of grilling activity, higher levels of purchasing by customers ahead of holidays, the impact of customer shelf reset activity and the timing of product restocking by our retail customers.
We make available on or through our website certain reports and amendments to those reports we file with or furnish to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act. These include our annual reports on Form 10-K, our quarterly reports on Form 10-Q, and our current reports on Form 8-K.
We make available on or through our website certain reports and amendments to those reports we file with or furnish to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Beyond Meat is actively monitoring these developments, but if adopted, they may require it to change its labeling and advertising. We are subject to labor and employment laws, laws governing advertising, privacy laws, anti-corruption laws, safety regulations and other laws, including consumer protection regulations that regulate retailers or govern the promotion and sale of merchandise.
We are subject to labor and employment laws, laws governing advertising, privacy laws, anti-corruption laws, safety regulations and other laws, including consumer protection regulations that regulate retailers or govern the promotion and sale of merchandise.
We also sell a range of other plant-based meat products, including Beyond Sausage, Beyond Beef, Beyond Meatballs, Beyond Breakfast Sausage Patties, Beyond Breakfast Sausage Links, Beyond Beef Crumbles, Beyond Italian Sausage Crumbles, Beyond Chicken Tenders, Beyond Steak, Beyond Popcorn Chicken, Beyond Chicken Nuggets and Beyond Meat Jerky.
We also sell a range of other plant-based meat products, including Beyond Sausage, Beyond Beef, Beyond Meatballs, Beyond Breakfast Sausage Patties, Beyond Breakfast Sausage Links, Beyond Beef Crumbles, Beyond Italian Sausage Crumbles, Beyond Chicken Tenders, Beyond Steak, Beyond Popcorn Chicken, Beyond Chicken Nuggets and the recently announced Beyond IV generation of products scheduled for launch in the spring of 2024 in the U.S. retail channel.
No other distributor or customer accounted for more than 10% of our gross revenues in 2022, 2021 or 2020. 6 Our Supply Chain • Sourcing and Suppliers The principal ingredient used to manufacture our products is pea protein. We procure the raw materials for our woven protein from a number of different suppliers.
In 2021, DOT and Zandbergen WFM accounted for approximately 12% and 11% of our gross revenues, respectively. No other distributor or customer accounted for more than 10% of our gross revenues in 2023, 2022 or 2021. Our Supply Chain • Sourcing and Suppliers The principal ingredient used to manufacture our products is pea protein.
Our state-of-the-art Innovation Center within our Campus Headquarters brings together leading scientists from chemistry, biology, material science, food science and biophysics disciplines who work together with process engineers and culinary specialists to pursue our vision of perfectly building plant-based meat. Net revenues decreased to $418.9 million in 2022 from $464.7 million in 2021, representing a 9.8% reduction.
Our state-of-the-art Innovation Center within our Campus Headquarters brings together leading scientists from chemistry, biology, material science, food science and biophysics disciplines who work together with process engineers and culinary specialists to pursue our vision of perfectly building plant-based meat. 1 Our Mission We are a mission-driven business with long-standing core values.
We aggressively protect our intellectual property rights by relying on trademark, copyright, patent, trade dress and trade secret laws and through the domain name dispute resolution system. We maintain a registered domain website at www.beyondmeat.com, as well as foreign domains in certain countries. We believe our intellectual property has substantial value and has contributed significantly to our business.
We maintain a registered domain website at www.beyondmeat.com, as well as foreign domains in certain countries. We believe our intellectual property has substantial value and has contributed significantly to our business.
We create our plant-based products using proprietary scientific processes that determine the architecture of the animal-based meat we are seeking to replicate and then we assemble it using plant-derived amino acids, lipids, carbohydrates, trace minerals and water. We are focused on continuously improving our products so that eventually they are, to the human sensory system, indistinguishable from their animal-based counterparts.
The primary components of animal-based meat—amino acids, lipids, carbohydrates, trace minerals and water—are not exclusive to animals and are plentiful in plants. We create our plant-based products using proprietary scientific processes that determine the architecture of the animal-based meat we are seeking to replicate and then we assemble it using plant-derived amino acids, lipids, carbohydrates, trace minerals and water.
We also review our compensation practices, both in terms of our overall workforce and individual employees, to ensure our pay is fair and equitable. In addition to our competitive salaries, to enhance our employees’ sense of participation in the company and to further align their interests with those of our stockholders, we offer equity to all of our salaried employees.
In addition to our competitive salaries, to enhance our employees’ sense of participation in the company and to further align their interests with those of our stockholders, we offer equity to all of our salaried employees. We offer a variety of comprehensive medical benefits to our employees.
We continue to explore further optimization of our production capabilities domestically and abroad to produce our woven proteins, blends of flavor systems and binding systems, and finished goods. Quality Control In-process quality checks are performed throughout the manufacturing process, including temperature, physical dimensions and weight. We provide specific instructions to customers and consumers for storing and cooking our products.
Quality Control In-process quality checks are performed throughout the manufacturing process, including temperature, physical dimensions and weight. We provide specific instructions to customers and consumers for storing and cooking our products. The majority of our products are transported and stored frozen.
Depending upon the jurisdiction, trademarks are valid as long as they are used in the regular course of trade and/or their registrations are properly maintained.
Depending upon the jurisdiction, trademarks are valid as long as they are used in the regular course of trade and/or their registrations are properly maintained. Our trademarks are valuable assets that reinforce the distinctiveness of our brand to our consumers. We have applied for or have trademark registrations internationally as well.
By shifting from animal-based meat to plant-based meat, we can positively impact four growing global issues: human health, climate change, constraints on natural resources and animal welfare.
By shifting from animal-based meat to plant-based meat, we can positively impact four growing global issues: human health, climate change, constraints on natural resources and animal welfare. To capture this broad market opportunity, we have developed three core plant-based product platforms that align with the largest meat categories globally: beef, pork and poultry.
We make this information available on our website free of charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC. The SEC also maintains a web site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
These include our annual reports on Form 10-K, our quarterly reports on Form 10-Q, and our current reports on Form 8-K. We make this information available on our website free of charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC.
We also intend to resume and expand our pre-COVID-19 field marketing efforts to sample products directly with consumers in stores and at relevant events. 5 Our Products We sell a range of plant-based meat products across our three core platforms of beef, pork and poultry. Depending on the product and channel, they are offered in ready-to-cook, ready-to-heat or shelf-stable formats.
Our Products We sell a range of plant-based meat products across our three core platforms of beef, pork and poultry. Depending on the product and channel, they are offered in ready-to-cook, ready-to-heat or shelf-stable formats. Our products cover an entire day’s menu planning, from breakfast to dinner and snacking in between.
In addition, in an environment of recessionary and inflationary pressures, general softness in the plant-based category, competition and other factors impacting our business, including uncertainty around the long-term impacts of COVID-19, we are unable to assess the ultimate impact on the demand for our products as a result of seasonality. 10 Human Capital Resources • Employees As of December 31, 2022, we had 787 full-time employees and 89 contract workers.
In an environment of heightened uncertainty from recessionary and inflationary pressures, prolonged weakness in the plant-based meat category, competition and other factors impacting our business, we are unable to assess the ultimate impact on the demand for our products as a result of seasonality.
In November 2021, Beyond Meat co-signed a letter from the European Alliance of Plant-Based 13 Foods protesting this law. In October 2021, the Turkish authorities challenged the use of the Caped Longhorn superhero logo, as well as the name “Beyond Meat,” alleging that the consumer is misled as to the characteristics of our products.
Separately, in October 2021, the Turkish authorities challenged the use of the Caped Longhorn superhero logo, as well as the name “Beyond Meat,” alleging that the consumer is misled as to the characteristics of our products. The local distributor has made a submission that this is an unlawful restriction under the EU-Turkey Free Trade Agreement.
On January 25, 2021, we entered into TPP, a joint venture with PepsiCo, Inc., to develop, produce and market innovative snack and beverage products made from plant-based protein. In the fourth quarter of 2022, we began taking steps to restructure certain contracts and operating activities related to Beyond Meat Jerky. Such activities are expected to continue through most of 2023.
On January 25, 2021, we entered into the Planet Partnership (“TPP”), a joint venture with PepsiCo, Inc., to develop, produce and market innovative snack and beverage products made from plant-based protein.
All of our products are made from simple ingredients without GMOs, no added hormones or antibiotics, and 0 mg of cholesterol per serving. With the exception of certain Beyond Beef Crumbles which are not certified Kosher, all of our products are certified Kosher and Halal.
All of our products are made from simple ingredients without GMOs, no added hormones or antibiotics, and 0 mg of cholesterol per serving. As of December 2023, all of our U.S. retail products are certified Kosher and Halal. We are focused on making our products nutritionally dense, with minimal negative attributes relative to their animal protein alternatives.
(Maple Leaf Foods), Gardein (Conagra), Hungry Planet, Inc., Impossible Foods, Incogmeato/Morningstar Farms (Kellogg), Moving Mountains, Omn!pork (OmniFoods), Tofurky, Sweet Earth and Awesome Burger (Nestle’ S.A.), Pure Farmland by Smithfield Foods (WH Group), Raised & Rooted (Tyson), Happy Little Plants (Hormel), Sysco’s Simply Plant-Based Meatless Burger, Tattooed Chef, The Not Company and Vegetarian Butcher (Unilever).
We believe that we compete with both conventional animal-protein companies, such as Cargill, Hormel, JBS, Perdue Foods and Tyson, and also plant-based meat brands, including brands affiliated with conventional animal-protein companies and other large food operators, such as Alpha Foods, Boca Foods (Kraft Heinz), Lightlife and Field Roast (Maple Leaf Foods), Gardein (Conagra), Hungry Planet, Inc., Impossible Foods, Incogmeato/Morningstar Farms (Kellanova), Moving Mountains, Omnipork (OmniFoods), Tofurky, Sweet Earth and Awesome Burger (Nestlé S.A.), Raised & Rooted (Tyson), Happy Little Plants (Hormel), Sysco’s Simply Plant-Based Meatless Burger, The Not Company and Vegetarian Butcher (Unilever).
On September 7, 2018, we changed our corporate name to “Beyond Meat, Inc.” Our common stock is listed on the Nasdaq Global Select Market under the symbol “BYND.” Emerging Growth Company Status Upon the completion of our IPO, we elected to be an Emerging Growth Company (“EGC”), as defined in the Jumpstart Our Business Startups Act.
On September 7, 2018, we changed our corporate name to “Beyond Meat, Inc.” Our common stock is listed on the Nasdaq Global Select Market under the symbol “BYND.” Our Website and Availability of SEC Reports and Other Information The Company maintains a website at the following address: www.beyondmeat.com.
Our flagship product is the Beyond Burger, designed to look, cook and taste like a traditional beef burger.
We are focused on continuously improving our products so that eventually they are, to the human sensory system, indistinguishable from their animal-based counterparts. Our flagship product is the Beyond Burger, designed to look, cook and taste like a traditional beef burger.
Research and Development Our research and development team creates, tests and refines our products at our Innovation Center within our Campus Headquarters. We employ in-house scientists, engineers, researchers and testers to help create the next iterations of our plant-based meat products.
Research and Development At Beyond Meat, the Research and Development (R&D) team is the driving force behind the development of our groundbreaking plant-based meat products. Operating from our Innovation Center located at our Campus Headquarters, our in-house R&D team includes scientists, engineers, researchers, technicians and chefs.
We aspire to engender and affirm equity and inclusion through a purposeful investment in qualified individuals from an array of different communities. Our company culture thrives when different perspectives and ideas inform our strategic goals to innovate and deliver to customers of every socio-economic background.
We believe our company culture thrives when different perspectives and ideas inform our strategic goals to innovate and deliver to customers of every socio-economic background. We recognize that representation and collaboration are vital components to address the challenges that face our planet.
We have been able to leverage the success of our existing products and resulting brand equity to launch improved versions of our existing products and create new products. The innovation team undertakes extensive research projects to increase our fundamental understanding of animal-based meat and plant-based equivalents.
We have been able to leverage the success of our existing products and resulting brand equity to launch improved versions of our existing products and create new products. The success and brand equity of our existing product lineup serves as a strong foundation, enabling us to continuously introduce improved versions of our current offerings and launch new, groundbreaking products.
The local distributor has made a submission that this is an unlawful restriction under the EU-Turkey Free Trade Agreement. In December 2021, the Turkish authorities rejected this submission, and held that references to “plant-based” in combination with “meat” would mislead the consumer.
In December 2021, the Turkish authorities rejected this submission, and held that references to “plant-based” in combination with “meat” would mislead the consumer. In December 2023, Italy adopted a law prohibiting names to indicate foodstuffs of animal origin to describe, market or promote foodstuffs containing vegetable proteins, following the French example.
Our trademarks are valuable assets that reinforce the distinctiveness of our brand to our consumers. We have applied for or have trademark registrations internationally as well. We believe the protection of our trademarks, copyrights, patents, domain names, trade dress and trade secrets are important to our success.
We believe the protection of our trademarks, copyrights, patents, domain names, trade dress and trade secrets are important to our success. We aggressively protect our intellectual property rights by relying on trademark, copyright, patent, trade dress and trade secret laws and through the domain name dispute resolution system.
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The success of our breakthrough innovation model and products has allowed us to appeal to a broad range of consumers, including flexitarians, those who typically eat animal-based meats, positioning us to compete directly in the $1.4 trillion global meat industry.
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The number of retail and foodservice outlets where Beyond Meat branded products are available was derived from rolling 52-week data as of December 2023 and excludes approximately 44,000 U.S. retail outlets unique to Beyond Meat Jerky or 2,300 outlets on a rolling 12-week basis.
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To capture this broad market opportunity, we have developed three core plant-based product platforms that align with the largest meat categories globally: beef, pork and poultry. The primary components of animal-based meat—amino acids, lipids, carbohydrates, trace minerals and water—are not exclusive to animals and are plentiful in plants.
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In 2023, we continued the process of renegotiating certain contracts and changing operating activities related to Beyond Meat Jerky and assumed distribution responsibilities for Beyond Meat Jerky in the fourth quarter of 2023. As part of our Global Operations Review, we made the decision to discontinue the Beyond Meat Jerky product line.
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All of our products are good to excellent sources of protein and we are focused on making them nutritionally dense, with minimal negative attributes relative to their animal protein alternatives.
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Based on cost reduction initiatives intended to reduce operating expenses, in August 2022 and October 2022, we implemented reductions in force affecting approximately 4% and 19%, respectively, of our global workforce.
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We have generated losses since inception. Net loss in 2022 and 2021 was $366.1 million and $182.1 million, respectively, as we pursued our long-term goal of future growth of our business, investing in innovation, people, infrastructure, product scaling and establishing strategic partnerships in the U.S., EU and China.
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To further reduce operating expenses, in November 2023, we announced that we were initiating a review of our global operations (the “Global Operations Review”), narrowing our commercial focus to certain growth opportunities, and accelerating activities that prioritize gross margin expansion and cash generation.
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In 2022, our net revenues were negatively affected by softness in demand in the plant-based category, macroeconomic issues, including inflation, rising interest rates and increasing concerns about the likelihood of a 1 recession, and increased competition.
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These efforts may include the discontinuation of select product lines such as Beyond Meat Jerky; changes to our pricing architecture within certain channels, including our current plan to increase the prices of certain of our products; accelerated, cash-accretive inventory reduction initiatives; further optimization of our manufacturing capacity and real estate footprint and the continued review of our operations in China.
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Additionally, there remains uncertainty regarding the long-term effects of the COVID-19 pandemic and certain negative impacts on our business, the plant-based category, consumer and customer behavior, and demand levels.
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As part of this review, in November 2023, we implemented a reduction in force affecting approximately 8% of our global workforce.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese risks and uncertainties include, but are not limited to, the following: • Risks Related to Our Business , such as, disruptions in the worldwide economy including an economic recession, downturn, periods of inflation or economic uncertainty; risks associated with inflationary price pressures including the effects of rising interest rates; reduced consumer confidence and changes in consumer spending and negative trends in consumer purchasing patterns; factors negatively impacting demand in the plant-based meat category; our history of losses and ability to achieve or sustain profitability, which could result in the contraction of our business and the implementation of significant cost cutting measures; risks and uncertainties associated with our cost-reduction initiatives, workforce reductions, executive leadership changes, realignment of reporting structures, and the timing and success of achieving certain financial goals or cash flow positive targets; our ability to streamline operations and improve cost efficiencies, which could result in the contraction of our business and the implementation of significant cost cutting measures such as downsizing and exiting certain operations, domestically and/or abroad; our ability to effectively expand or optimize our manufacturing operations and accurately forecast demand for our products; our ability to utilize our capacity efficiently or accurately plan our capacity requirements; our ability to sell our inventory in a timely manner which may require us to sell our products through liquidation channels at lower prices, write-down or write-off obsolete inventory, or increase inventory reserves; our ability to forecast future results of operations and financial goals or targets; our reliance on a limited number of third-party suppliers and our ability to procure sufficient high quality raw materials; disruptions to our supply chain; limited availability of pea protein that meets our standards; our limited number of distributors; consolidation of customers, loss of a significant customer or our inability to acquire new customers; loss of one or more of our co-manufacturers; damage or disruption at our manufacturing facilities and operational delays at our new manufacturing facilities; delays with the build out of our new Campus Headquarters; difficulties expanding into new markets; effects of the COVID-19 pandemic on our business; slow, declining or negative revenue growth rates; revenue and earnings fluctuations; seasonal fluctuations; delays in 15 product delivery by third-party transportation providers; failure to retain our senior management and attract and retain employees; use of professional employer organizations to employ certain of our international employees; failure of recent and future acquisitions or investments to be efficiently integrated; scrutiny from our stakeholders, institutional investors and governmental bodies on our environmental, social and governance (“ESG”) practices; accounting estimate risks; and risks stemming from workplace accidents or safety incidents. • Risks Related to Our Products , such as, incidents of food safety and food-borne illnesses or advertising or product misbranding; reduction in sales of the Beyond Burger; changing consumer preferences; failure to introduce new products or successfully improve existing products; our ability to accurately predict consumer taste preferences and respond quickly to new trends; and ingredient and packaging costs volatility. • Risks Related to Our Industry and Brand , such as, increased competition in our market and new market entrants; harm to our brand or reputation due to real or perceived quality or health issues with our products; and failure to develop and maintain our brand. • Risks Related to Our International Operations , such as, business, regulatory, political, financial and economic risks of doing business in China and Europe; foreign exchange rate fluctuations; and potential violations of the FCPA and other anti-corruption laws. • Risks Related to Our Investments , such as, our manufacturing operations in China and the Netherlands; our ownership of real property; and participation in joint ventures. • Risks Related to Our Intellectual Property, Information Technology, Cybersecurity and Privacy , such as, our ability to adequately protect our proprietary technology and intellectual property; our reliance on information technology systems; the occurrence of a cybersecurity incident or other technology disruptions or failure to comply with the laws and regulations relating to privacy and the protection of individual data. • Risks Related to Our Lease Obligations, Indebtedness, Financial Position and Need for Additional Capital , such as, delays or cost overruns associated with the build out of our new Campus Headquarters and the impact of workforce reductions or other cost-reduction initiatives on our space demands; failure to meet our significant lease obligations or risks related to excess space capacity under our leases due to workforce reductions or other cost-reduction initiatives; risks related to the Notes; inability to access restricted cash that collateralizes letters of credit; and failure to obtain additional financing to achieve our goals. • Risks Related to the Environment, Climate and Weather , such as, a major natural disaster or severe weather event in areas where our facilities are located; and negative effects from climate change. • Risks Related to Being a Public Company , such as, the effectiveness of our internal controls; limitations in our internal control system resulting in undetected errors or fraud; and the increased costs associated with complying with the requirements applicable to public companies. • Risks Related to Regulatory and Legal Compliance Matters, Litigation and Legal Proceedings , such as, FDA compliance; legal claims, government investigations and other regulatory enforcement actions; compliance with international regulations; changes in existing laws or regulations or the adoption of new laws or regulations; failure by our suppliers of raw materials or co-manufacturers to comply with food safety, environmental or other laws or with the specifications and requirements of our products; and ongoing litigation or legal proceedings. • General Risk Factors , such as, high volatility in our share price; reduction in our share price due to a substantial number of sales; decline in our share price and trading volume due to adverse or misleading opinions by securities or industry analysts regarding our business; no history of paying dividends or 16 plans to pay dividends to our stockholders in the foreseeable future; provisions included in our charter documents to delay or prevent a change in control of our company; limitation of stockholders’ ability to obtain a favorable judicial forum for disputes due to the exclusive forum provision in our restated certificate of incorporation; and limitation of our ability to utilize our federal net operating loss and tax credit carryforwards.
Biggest changeThese risks and uncertainties include, but are not limited to, the following: • Risks Related to Our Business , such as, adverse and uncertain economic and political conditions in the U.S. and international markets, including concerns about the likelihood of an economic recession, downturn, periods of rising or high inflation or economic uncertainty; risks associated with inflationary price pressures including the effects of higher interest rates; reduced consumer confidence and changes in consumer spending and negative trends in consumer purchasing patterns; our history of losses and ability to achieve or sustain profitability; a continued decrease in demand, and the underlying factors negatively impacting demand in the plant-based meat category; our cost-reduction initiatives, cost structure improvements, workforce reductions and executive leadership changes, and the timing and success of reducing operating expenses and achieving certain financial goals and cash flow positive objectives; the timing and success of narrowing our commercial focus to certain growth opportunities; accelerating activities that prioritize gross margin expansion and cash generation, including as part of our Global Operations Review; changes to our pricing architecture within certain channels; and accelerated, cash-accretive inventory reduction initiatives; our ability to successfully execute our Global Operations Review, including the exit or discontinuation of select product lines such as Beyond Meat Jerky, further optimization of our manufacturing capacity and real estate footprint, and the continued review of our operations in China; the substantial non-cash impacts resulting from our Global Operations Review; our ability to accurately forecast demand for our products; our ability to utilize our capacity efficiently or accurately plan our capacity requirements; our ability to sell our inventory in a timely manner which may require us to sell our products through liquidation channels at lower prices, write-down or write-off obsolete inventory, or increase inventory provision; our ability to forecast future results of operations and financial goals or targets; our reliance on a limited number of third party suppliers and our ability to procure sufficient high quality raw materials; disruptions to our supply chain; limited availability of pea protein that meets our standards; our limited number of distributors; consolidation of customers, loss of a significant customer or our inability to acquire new customers; loss of one or more of our co-manufacturers; damage or disruption at our internal or co-manufacturing facilities; difficulties expanding into new markets; slow, declining or negative revenue growth rates; revenue and earnings fluctuations; seasonal fluctuations; delays in product delivery by third party transportation providers; failure to retain our senior management and attract and retain employees; use of professional employer organizations to employ certain of our international employees; failure of acquisitions or investments to be efficiently integrated; our ESG practices and reporting of such matters; accounting estimate risks; risks from changes in estimating judgments and assumptions used in the preparation of financial statements in accordance with GAAP or any future impairment charges; technological changes that might impact our products and/or business; and risks stemming from workplace accidents or safety incidents. • Risks Related to Our Products , such as, incidents of food safety and food-borne illnesses or advertising or product misbranding; reduction in sales of the Beyond Burger; changing consumer preferences; failure to introduce new products or successfully improve existing products; our ability to accurately predict consumer taste preferences and respond quickly to new trends; risks related to planned price increases of our products and volatility of ingredient and packaging costs. • Risks Related to Our Industry and Brand , such as, increased competition in our market and new market entrants; general softness in the plant-based meat category; harm to our brand or reputation due to real or perceived quality or health issues with our products; and failure to develop and maintain our brand. • Risks Related to Our International Operations, such as, business, regulatory, political, financial and economic risks of doing business in China and Europe, including as a result of the continued review of our operations in China; foreign exchange rate fluctuations; and potential violations of the FCPA and other anti-corruption laws. • Risks Related to Our Investments , such as, our manufacturing operations in China and the Netherlands; our ownership of real property; and the operations of and participation in joint ventures, including the discontinuation of the Beyond Meat Jerky product line. • Risks Related to Our Intellectual Property, Information Technology, Cybersecurity and Privacy , such as, our ability to adequately protect our proprietary technology and intellectual property; our reliance on information technology systems; the occurrence of a cybersecurity incident or other technology disruptions or failure to comply with the laws and regulations relating to privacy and the protection of individual data. • Risks Related to Our Lease Obligations , Indebtedness, Financial Position and Need for Additional Capital, such as, delays or cost overruns associated with the build out of our new Campus Headquarters and the impact of workforce reductions or other cost-reduction initiatives on our space demands; our ability to sublease, assign or otherwise transfer excess space; failure to meet our significant lease obligations or risks related to excess space capacity under our leases due to workforce reductions or other cost-reduction initiatives; risks related to our convertible senior notes; inability to access restricted cash that collateralizes letters of credit; sufficiency of our cash and cash equivalents to meet our liquidity needs; and failure to obtain additional financing or access capital markets to achieve our goals. • Risks Related to the Environment, Climate and Weather , such as, a major natural disaster or severe weather event in areas where our internal or co-manufacturing facilities are located; and negative effects from climate changes. • Risks Related to Being a Public Company , such as, the effectiveness of our internal controls; limitations in our internal control system resulting in undetected errors or fraud; and increased costs associated with complying with the requirements applicable to public companies. • Risks Related to Regulatory and Legal Compliance Matters, Litigation and Legal Proceedings , such as, FDA compliance; legal claims, government investigations and other regulatory enforcement actions; compliance with international regulations; changes in existing laws or regulations or the adoption of new laws or regulations; failure by our suppliers of raw materials or co-manufacturers to comply with food safety, environmental or other laws or with the specifications and requirements of our products; and ongoing litigation or legal proceedings. • General Risk Factors , such as, high volatility in our share price; reduction in our share price due to a substantial number of sales; decline in our share price and trading volume due to adverse or misleading opinions by securities or industry analysts regarding our business; no history of paying dividends or plans to pay dividends to our stockholders in the foreseeable future; provisions included in our charter documents to delay or prevent a change in control of our company; limitation of stockholders’ ability to obtain a favorable judicial forum for disputes due to the exclusive forum provision in our restated certificate of incorporation and forum selection provision in our amended and restated bylaws; and limitation of our ability to utilize our federal net operating loss and tax credit carryforwards.
Moreover, actions or statements that we may take based on based on expectations, assumptions, or third-party information that we currently believe to be reasonable may subsequently be determined to be erroneous or be subject to misinterpretation.
Moreover, actions or statements that we may take based on expectations, assumptions or third party information that we currently believe to be reasonable may subsequently be determined to be erroneous or be subject to misinterpretation.
Such events include problems with our suppliers’ businesses, finances, labor relations and/or shortages, strikes or other labor 21 unrest, ability to import raw materials, product quality issues, costs, production, insurance and reputation, as well as local economic and political conditions, restrictive U.S. and foreign governmental actions, such as restrictions on transfers of funds and trade protection measures, including export/import duties and quotas and customs duties and tariffs, adverse fluctuations in foreign currency exchange rates, changes in legal or regulatory requirements, border closures, disease outbreaks or pandemics (such as COVID-19), acts of war, terrorism, natural disasters, fires, earthquakes, flooding, severe weather, agricultural diseases or other catastrophic occurrences.
Such events include problems with our suppliers’ businesses, finances, labor relations and/or shortages, strikes or other labor unrest, ability to import raw materials, product quality issues, costs, production, insurance and reputation, as well as local economic and political conditions, restrictive U.S. and foreign governmental actions, such as restrictions on transfers of funds and trade protection measures, including export/import duties and quotas and customs duties and tariffs, adverse fluctuations in foreign currency exchange rates, changes in legal or regulatory requirements, border closures, disease outbreaks or pandemics (such as COVID-19), acts of war, terrorism, natural disasters, fires, earthquakes, flooding, severe weather, agricultural diseases or other catastrophic occurrences.
An interruption in, or the loss of operations at, one or more of our co-manufacturing facilities, which may be caused by work stoppages, labor shortages, strikes or other labor unrest, production disruptions, product quality issues, local economic and political conditions, restrictive governmental actions, border closures, disease outbreaks or pandemics (such as COVID-19), the outbreak of hostilities, acts of war, terrorism, fire, earthquakes, severe weather, flooding or other natural disasters at one or more of these facilities, could delay, postpone or reduce production of some of our products, which could have a material adverse effect on our business, results of operations and financial condition until such time as such interruption is resolved or an alternate source of production is secured.
An interruption in, or the loss of operations at, one or more of our co-manufacturing facilities, which may be caused by work stoppages, labor shortages, strikes or other labor unrest, production disruptions, product quality or safety issues, local economic and political conditions, restrictive governmental actions, border closures, disease outbreaks or pandemics (such as COVID-19), the outbreak of hostilities, acts of war, terrorism, fire, earthquakes, severe weather, flooding or other natural disasters at one or more of these facilities, could delay, postpone or reduce production of some of our products, which could have a material adverse effect on our business, results of operations and financial condition until such time as such interruption is resolved or an alternate source of production is secured.
Our forecasts are based on multiple assumptions which may cause our estimates to be inaccurate and affect our ability to obtain adequate manufacturing capacity (whether our own manufacturing capacity or co-manufacturing capacity) and adequate inventory supply in order to meet the 19 demand for our products, which could prevent us from meeting increased customer demand and harm our brand and our business and in some cases may result in fines or indemnification obligations we must pay customers or distributors if we are unable to fulfill orders placed by them in a timely manner or at all.
Our forecasts are based on multiple assumptions which may cause our estimates to be inaccurate and affect our ability to obtain adequate manufacturing capacity (whether our own manufacturing capacity or co-manufacturing capacity) and adequate inventory supply in order to meet the demand for our products, which could prevent us from meeting increased customer demand and harm our brand and our business and in some cases may result in fines or indemnification obligations we must pay customers or distributors if we are unable to fulfill orders placed by them in a timely manner or at all.
Adverse climate conditions, weather patterns and the impact of such conditions and patterns such as drought, flood, wildfires, mudslides and rising ambient temperatures adversely impact product cultivation conditions for farmers and agricultural productivity, including by disrupting ecosystems and severely altering the growing conditions, nutrient levels, soil moisture and water availability necessary for the growth and cultivation of crops, which would adversely affect the product quality, availability or cost of certain commodities that are necessary for our products, such as yellow peas, mung beans, sunflowers, rice, faba bean, canola oil and coconut oil.
Adverse climate conditions, weather patterns and the impact of such conditions and patterns such as drought, flood, wildfires, mudslides and rising ambient temperatures adversely impact product cultivation conditions for farmers and agricultural productivity, including by disrupting ecosystems and severely altering the growing conditions, nutrient levels, soil moisture and water availability necessary for the growth and cultivation of crops, which would adversely affect the product quality, availability or cost of certain commodities that are necessary for our products, such as yellow peas, mung beans, sunflowers, rice, faba bean, avocado oil, canola oil and coconut oil.
Since our inception, substantially all of our resources have been dedicated to the development of our three core plant-based product platforms of beef, pork and poultry, including purchases of property, plant and 41 equipment, principally to support the development and production of our products, the build-out and equipping of our former Manhattan Beach Project Innovation Center and our Innovation Center within our Campus Headquarters, and the purchase, build-out and equipping of manufacturing facilities in the U.S. and abroad.
Since our inception, substantially all of our resources have been dedicated to the development of our three core plant-based product platforms of beef, pork and poultry, including purchases of property, plant and equipment, principally to support the development and production of our products, the build-out and equipping of our former Manhattan Beach Project Innovation Center and our Innovation Center within our Campus Headquarters, and the purchase, build-out and equipping of manufacturing facilities in the U.S. and abroad.
In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. However, the capital markets may experience extreme volatility and disruption, including rising interest rates and higher borrowing costs, which could make it more difficult for us to raise capital.
In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. However, the capital markets may experience extreme volatility and disruption, including higher interest rates and higher borrowing costs, which could make it more difficult for us to raise capital.
In addition, with our expanding international operations, we could be adversely affected by violations of the FCPA, and similar worldwide anti-bribery laws, which generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials or other third parties for the purpose of obtaining or retaining business.
In addition, with our international operations, we could be adversely affected by violations of the FCPA, and similar worldwide anti-bribery laws, which generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials or other third parties for the purpose of obtaining or retaining business.
If demand for our products experiences a prolonged decrease, we may be required to terminate or make penalty-type payments under certain supply chain arrangements, close or idle facilities and write down our long-lived assets or shorten the useful lives of underutilized assets and accelerate depreciation, which would increase our expenses.
If demand for our products experiences a prolonged decrease, we may be required to terminate or make penalty payments under certain supply chain arrangements, close or idle facilities and write down our long-lived assets or shorten the useful lives of underutilized assets and accelerate depreciation, which would increase our expenses.
If any material amount of our machinery or inventory were damaged, we would be unable to meet our contractual obligations and cannot 24 predict when, if at all, we could replace or repair such machinery, which could materially adversely affect our business, financial condition and operating results. Our business could be adversely affected by a workplace accident or safety incident.
If any material amount of our machinery or inventory were damaged, we would be unable to meet our contractual obligations and cannot predict when, if at all, we could replace or repair such machinery, which could materially adversely affect our business, financial condition and operating results. Our business could be adversely affected by a workplace accident or safety incident.
Our success depends in part upon our ability to attract, train and retain a sufficient number of employees who understand and appreciate our culture and can represent our brand effectively and establish credibility with our business partners and consumers. We believe a critical component of our success has been our company culture and long-standing core values.
Our success depends in part upon our ability to attract, train and retain a sufficient number of employees who understand and appreciate our culture and can represent our brand effectively and establish credibility with our business partners, customers and consumers. We believe a critical component of our success has been our company culture and long-standing core values.
We have invested substantial time and resources in building our team. If we are unable to hire and retain employees capable of meeting our business needs and expectations, or if we 27 fail to preserve our company culture among a larger number of employees dispersed in various geographic regions, our business and brand image may be impaired.
We have invested substantial time and resources in building our team. If we are unable to hire and retain employees capable of meeting our business needs and expectations, or if we fail to preserve our company culture among a larger number of employees dispersed in various geographic regions, our business and brand image may be impaired.
In addition, the provisions of Section 203 of the Delaware General Corporate Law, or the DGCL, govern us. These provisions may prohibit large 50 stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us for a certain period of time without the consent of our board of directors.
In addition, the provisions of Section 203 of the Delaware General Corporate Law, or the DGCL, govern us. These provisions may prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us for a certain period of time without the consent of our board of directors.
If we are unable to manage our supply chain effectively and ensure that our products are available to meet consumer demand, we may not be able to fulfill customer orders, our operating costs could increase and our profit margins could decrease. Disruptions of our supply chain could have a material adverse effect on our operating and financial results.
If we are unable to manage our supply chain effectively and ensure that our products are available to meet consumer demand, we may not be able to fulfill customer orders, our operating costs could increase and our profit margins could decrease. Disruptions to our supply chain could have a material adverse effect on our operating and financial results.
We rely on a limited number of distributors, and if we experience the loss of one or more distributors and cannot replace them in a timely manner, our results of operations may be adversely affected. Many retailers and foodservice providers purchase our products through distributors who purchase, store, sell, and deliver our products to such retailers and foodservice providers.
We rely on a limited number of distributors, and if we experience the loss of one or more distributors and cannot replace them in a timely manner, our results of operations may be adversely affected. Many retailers and foodservice providers purchase our products through distributors who purchase, store, sell, and deliver our products to retailers and foodservice providers.
Our products are subject to numerous food safety and other laws and regulations relating to the 45 sourcing, manufacturing, composition and ingredients, storing, labeling, marketing, advertising and distribution of these products. For example, in early 2018, we received an inquiry from Canadian officials about the labeling and composition of products that we export to Canada.
Our products are subject to numerous food safety and other laws and regulations relating to the sourcing, manufacturing, composition and ingredients, storing, labeling, marketing, advertising and distribution of these products. For example, in early 2018, we received an inquiry from Canadian officials about the labeling and composition of products that we export to Canada.
The results of litigation and other legal proceedings are inherently uncertain, and adverse judgments or settlements in some of these legal disputes may result in 47 adverse monetary damages, penalties or injunctive relief against us, which could have a material adverse effect on our financial position, cash flows or results of operations.
The results of litigation and other legal proceedings are inherently uncertain, and adverse judgments or settlements in some of these legal disputes may result in adverse monetary damages, penalties or injunctive relief against us, which could have a material adverse effect on our financial position, cash flows or results of operations.
Risks Related to the Environment, Climate and Weather A major earthquake, tsunami, tornado, wildfire, flood, drought or other natural disaster or severe weather event could seriously disrupt our entire business. We have offices, co-manufacturing and manufacturing facilities located in the United States and internationally.
Risks Related to the Environment, Climate and Weather A major earthquake, tsunami, tornado, wildfire, flood, drought or other natural disaster or severe weather event could seriously disrupt our entire business. We have offices, internal manufacturing and co-manufacturing facilities located in the United States and internationally.
The United States Congress recently considered (but did not pass) federal legislation, called the Real MEAT Act, that could require changes to our product labeling and marketing, including identifying products as “imitation” meat products, and that would give USDA certain oversight over the labeling of plant-based meat products.
The United States Congress considered (but did not pass) federal legislation, called the Real MEAT Act, that could require changes to our product labeling and marketing, including identifying products as “imitation” meat products, and that would give USDA certain oversight over the labeling of plant-based meat products.
The pursuit of acquisitions and any integration process will require significant time and resources and could divert management time and focus from operation of our then-existing 28 business, and we may not be able to manage the process successfully. Any acquisitions we complete could be viewed negatively by our customers or consumers.
The pursuit of acquisitions and any integration process will require significant time and resources and could divert management time and focus from operation of our then-existing business, and we may not be able to manage the process successfully. Any acquisitions we complete could be viewed negatively by our customers or consumers.
Additional states, including Arkansas, Georgia, Mississippi, Louisiana, Oklahoma, South Dakota and Wyoming, have subsequently passed similar laws, and legislation that would impose specific requirements on the naming of plant-based meat products is currently pending in a number of other states.
Additional states, including Arkansas, Georgia, Mississippi, Louisiana, Oklahoma, South Dakota and Wyoming, have subsequently passed similar laws, and legislation that would impose specific requirements on the naming of plant-based meat products is currently pending in a number of other states, including Arizona.
If our joint venture partner does not fulfill its obligations, the affected joint venture may not be able to operate in 35 accordance with its business plan. Under such a scenario, our results of operations may be adversely affected and we may be compelled to increase the level of our resources devoted to the joint venture.
If our joint venture partner does not fulfill its obligations, the affected joint venture may not be able to operate in accordance with its business plan. Under such a scenario, our results of operations may be adversely affected and we may be compelled to increase the level of our resources devoted to the joint venture.
If we do not adequately address the possibility, or any actual instance, of intentional adulteration, we could face possible seizure or recall of our 30 products and the imposition of civil or criminal sanctions, which could materially adversely affect our business, financial condition and operating results.
If we do not adequately address the possibility, or any actual instance, of intentional adulteration, we could face possible seizure or recall of our products and the imposition of civil or criminal sanctions, which could materially adversely affect our business, financial condition and operating results.
A portion of our international business is conducted in currencies other than the U.S. dollar, and therefore changes in foreign exchange rates relative to the U.S. dollar have in the past, and may in the future, affect the 34 value of our non‑U.S. dollar net assets, revenues and expenses.
A portion of our international business is conducted in currencies other than the U.S. dollar, and therefore changes in foreign exchange rates relative to the U.S. dollar have in the past, and may in the future, affect the value of our non-U.S. dollar net assets, revenues and expenses.
However, any future changes in our stock ownership, which may be outside of our control, may trigger an ownership change and, consequently, Section 382 and 383 limitations. Similar provisions of state tax law 51 may also apply to limit our use of accumulated state tax attributes.
However, any future changes in our stock ownership, which may be outside of our control, may trigger an ownership change and, consequently, Section 382 and 383 limitations. Similar provisions of state tax law may also apply to limit our use of accumulated state tax attributes.
The impact of inflation could also reduce consumer confidence and decrease consumer discretionary spending, including spending to purchase our products, and negatively affect trends in consumer purchasing patterns due to changes in consumers’ disposable income, credit availability and debt levels.
The impact of inflation could also continue to reduce consumer confidence and decrease consumer discretionary spending, including spending to purchase our products, and negatively affect trends in consumer purchasing patterns due to changes in consumers’ disposable income, credit availability and debt levels.
If we are not able to complete development of the Campus Headquarters within the approved budget or there are significant cost overruns, our cash flows, financial condition, or results of operations could be materially and adversely affected.
If we are not able to complete development of the Campus Headquarters within the approved budget or there are significant cost overruns and/or delays, our cash flows, financial condition, or results of operations could be materially and adversely affected.
If we fail to effectively expand or optimize our manufacturing and production capacity, accurately forecast demand for our products or quickly respond to forecast changes, our business and operating results and our brand reputation could be harmed.
If we fail to effectively optimize our manufacturing and production capacity, accurately forecast demand for our products or quickly respond to forecast changes, our business and operating results and our brand reputation could be harmed.
Any damage or disruption at our domestic or international manufacturing facilities may harm our business. We have manufacturing facilities in the United States, China and the Netherlands to produce our woven proteins and our finished goods.
Any damage or disruption at our domestic or international manufacturing facilities may harm our business. We have internal manufacturing facilities in the United States, China and the Netherlands to produce our woven proteins and our finished goods.
Our indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things: • increasing our vulnerability to adverse economic and industry conditions; 39 • limiting our ability to obtain additional financing; • requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes; • limiting our flexibility to plan for, or react to, changes in our business; • diluting the interests of our existing stockholders as a result of issuing shares of our common stock upon conversion of the Notes; and • placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital.
Our indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things: • increasing our vulnerability to adverse economic and industry conditions; • limiting our ability to obtain additional financing; • requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes; • limiting our flexibility to plan for, or react to, changes in our business; • diluting the interests of our existing stockholders as a result of issuing shares of our common stock upon conversion of the Notes (as defined below); and • placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital.
We also compete with other food producers in the procurement of ingredients, and this competition may 22 increase in the future if consumer demand for plant-based meat products increases.
We also compete with other food producers in the procurement of ingredients, and this competition may increase in the future if consumer demand for plant-based meat products increases.
Further escalation of geopolitical tensions could have a broader impact that expands into other markets where we do business, which could adversely affect our business and/or our supply chain, our international subsidiaries, business partners or customers in the broader region, including potential destabilizing effects that such conflicts may pose for the European continent or the global oil and natural gas markets.
Further escalation of geopolitical tensions could have a broader impact that expands into other markets where we do business, which could adversely affect our business and/or our supply chain, our international subsidiaries, business partners or customers in the broader region, including potential destabilizing effects that such conflicts may pose for the European continent, the Middle East or the global oil and natural gas markets.
We believe there are a limited number of competent, high-quality co-manufacturers in the industry that meet our strict quality and control standards, and as we seek to continue to obtain additional or alternative co-manufacturing arrangements in the future, there can be no assurance that we would be able to do so on satisfactory terms, in a timely manner, or at all.
We believe there are a limited number of competent, high-quality co-manufacturers in the industry that meet our strict quality and control standards, and as we seek to continue to obtain additional or alternative co-manufacturing arrangements in the future, there can be no assurance that we will be able to do so on satisfactory terms, in a timely manner, or at all.
The impact of a major earthquake, tsunami, tornado, flood, wildfire, drought or other natural disaster or severe weather event at any of our facilities and overall operations is difficult to predict, but such a natural disaster or severe weather event could seriously disrupt our entire business and lead to substantial losses, which may not be covered by insurance.
The impact of a major earthquake, tsunami, tornado, flood, wildfire, drought or other natural disaster or severe weather event at any of these facilities on our overall operations is difficult to predict, but such a natural disaster or severe weather event could seriously disrupt our entire business and lead to substantial losses, which may not be covered by insurance.
Failure to comply with such regulations can result in fines, reputational damage, import ineligibility for certain products or raw materials, or otherwise adversely impact our business. Our future business, results of operations and financial condition may be adversely affected by reduced or limited availability of plant-based protein that meets our standards.
Failure to comply with such regulations can result in fines, reputational damage, import ineligibility for certain products or raw materials, or otherwise adversely impact our business. Our future business, results of operations and financial condition may be adversely affected by reduced or limited availability of plant-based protein or avocado oil that meets our standards.
There can be no assurance that the company would be able to locate alternative providers of such services, or that it could do so at economical rates. Future acquisitions or investments could disrupt our business and harm our financial condition. In the future, we may pursue acquisitions or investments that we believe will help us achieve our strategic objectives.
There can be no assurance that we would be able to locate alternative providers of such services, or that we could do so at economical rates. Future acquisitions or investments could disrupt our business and harm our financial condition. In the future, we may pursue acquisitions or investments that we believe will help us achieve our strategic objectives.
Our significant indebtedness and liabilities could limit the cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition and results of operations and impair our ability to satisfy our obligations under our Notes. As of December 31, 2022, we had approximately $1.3 billion of consolidated indebtedness and other liabilities.
Our significant indebtedness and liabilities could limit the cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition and results of operations and impair our ability to satisfy our obligations under our Notes. As of December 31, 2023, we had approximately $1.3 billion of consolidated indebtedness and other liabilities.
Any expansion in our market depends on a number of factors, including the cost and perceived value associated with our product and those of our competitors. Even if the market in which we compete meets the size estimates and growth forecast, our business could fail to grow at the rate we anticipate, if at all.
Any expansion in our market depends on a number of factors, including the cost and perceived value associated with our products and those of our competitors. Even if the market in which we compete meets the size estimates and growth forecast, our business could fail to grow at the rate we anticipate, if at all.
In addition, new national foodservice customers will often initially add certain of our product offerings to their menus at limited locations and/or on a limited test basis, after which time these customers may choose to no longer offer our products or may ultimately scale back subsequent expansions.
In addition, foodservice customers will often initially add certain of our product offerings to their menus at limited locations and/or on a limited test basis, after which time these customers may choose to no longer offer our products or may ultimately scale back subsequent expansions.
If similar bills gain traction and ultimately become law, we could be required to identify our products as “imitation” in our product 46 labels. Further, the FDA has announced that it is developing guidance on naming plant-based meat alternatives that could impact our naming expectations.
If similar bills gain traction and ultimately become law, we could be required to identify our products as “imitation” on our product labels. Further, the FDA has announced that it is developing guidance on naming plant-based meat alternatives that could impact our naming expectations.
We early adopted Accounting Standards Update (“ASU”) No. 2020-06, “Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity” (“ASU 2020-06”), to account for our Notes which eliminates the treasury stock method for convertible instruments that can be settled in whole or in part with equity and instead requires the application of the more dilutive of the “if-converted” method or the two-class method.
We early adopted Accounting Standards Update No. 2020-06, “Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity”, to account for our Notes which eliminates the treasury stock method for convertible instruments that can be settled in whole or in part with equity and instead requires the application of the more dilutive of the “if-converted” method or the two-class method.
Inflationary price pressures of raw materials, labor, transportation, fuel or other inputs used by us and our suppliers, including the effects of rising interest rates, has negatively impacted, and could continue to negatively impact, our business and results of operations. Our operating environment has been impacted by inflation and rising interest rates.
Inflationary price pressures of raw materials, labor, transportation, fuel or other inputs used by us and our suppliers, including the effects of higher interest rates, has negatively impacted, and could continue to negatively impact, our business and results of operations. Our operating environment has been impacted by inflation and higher interest rates.
We compete with conventional animal-protein companies such as Cargill, Hormel, JBS, Perdue Foods, Tyson and WH Group, who may have substantially greater financial and other resources than us and whose animal-based products are well-accepted in the marketplace today.
We compete with conventional animal-protein companies such as Cargill, Hormel, JBS, Perdue Foods and Tyson, who may have substantially greater financial and other resources than us and whose animal-based products are well-accepted in the marketplace today.
The accounting method for reflecting the Notes 40 on our balance sheet may adversely affect our reported earnings and financial condition.
The accounting method for reflecting the Notes on our balance sheet may adversely affect our reported earnings and financial condition.
Department of Agriculture, or USDA, state regulators or similar foreign regulatory authorities that relate to the use of the word “meat” or other similar words in connection with plant-based meat products could adversely affect our business, prospects, results of operations or financial condition.
Department of Agriculture (the “USDA”), state regulators or similar foreign regulatory authorities that relate to the use of the word “meat” or other similar words in connection with plant-based meat products could adversely affect our business, prospects, results of operations or financial condition.
We rely on a limited number of vendors, a portion of which are located internationally, to supply us with raw materials. Our financial performance depends in large part on our ability to arrange for the purchase of raw materials in sufficient quantities at competitive prices.
We rely on a limited number of vendors, a portion of whom are located internationally, to supply us with raw materials. Our financial performance depends in large part on our ability to arrange for the purchase of raw materials in sufficient quantities at competitive prices.
Our results of operations depend upon, among other things, our ability to maintain and increase sales volume with our existing distributors, retailer and foodservice customers, our ability to attract new consumers, the financial condition of our consumers and our ability to provide products that appeal to consumers at the right price.
Our results of operations depend upon, among other things, our ability to maintain and increase sales volume with our existing distributors, retailers and foodservice customers, our ability to attract new consumers, the financial condition of our consumers and our ability to provide products that appeal to consumers at the right price.
While we may at times engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others) to improve the ESG profile of our company and/or products, such initiatives or achievements of such commitments may be costly and may not have the desired effect.
While we may at times engage in voluntary initiatives (such as voluntary disclosures, certifications or goals, among others) to improve the ESG profile of our company and/or products, such initiatives or achievement of such commitments may be costly and may not have the desired effect.
We may also not be able to find suitable alternatives with co-manufacturers to replace the output from such equipment on a timely basis and at a reasonable cost. In the future, we may also experience plant shutdowns or periods of reduced production because of regulatory issues, equipment failure, delays in raw material deliveries or other adverse events.
We may also not be able to find suitable alternatives with co-manufacturers to replace the output from such equipment on a timely basis and at a reasonable cost. In the future, we may also experience plant shutdowns or periods of reduced production because of regulatory issues, equipment failure, delays in raw material deliveries, food safety incidents or other adverse events.
Opening these facilities has required, and will continue to require, additional capital expenditures and the efforts and attention of our management and other personnel, which has and will continue to divert resources from our existing business or operations.
Opening, maintaining and operating these facilities has required, and will continue to require, additional capital expenditures and the efforts and attention of our management and other personnel, which has and will continue to divert resources from our existing business or operations.
Therefore, the loss of one or more co-manufacturers, any disruption or delay at a co-manufacturer or any failure to identify and engage co-manufacturers for new products, product extensions and expanded operations could delay, postpone or reduce production of our products, which could have a material adverse effect on our business, results of operations and financial condition.
The loss of one or more co-manufacturers, any disruption or delay at a co-manufacturer or any failure to identify and engage co-manufacturers for new products, product extensions and expanded operations, including internationally, could delay, postpone or reduce production of our products, which could have a material adverse effect on our business, results of operations and financial condition.
If we are required to substantially discount our inventory or are unable to sell our inventory in a timely manner, we would be required to increase our inventory reserves or write off obsolete inventory and our operating results could be substantially harmed.
If we are required to substantially discount our inventory or are unable to sell our inventory in a timely manner, we would be required to increase our inventory provision or write-off obsolete inventory and our operating results could be substantially harmed.
In 2021 and 2022, we have had several changes to our executive leadership team and senior management, including as a result of organizational changes based on cost-reduction initiatives.
In 2023, 2022 and 2021, we had several changes to our executive leadership team and senior management, including as a result of organizational changes based on cost-reduction initiatives.
The market price of our common stock has been and is likely to continue to be highly volatile and could be subject to wide fluctuations in response to many factors discussed in this “ Risk Factors ” section, including: • general economic, market and political conditions, including negative effects on consumer confidence and spending levels; • actual or anticipated fluctuations in our financial condition and operating results, including fluctuations in our quarterly and annual results; • announcements of innovations by us or our competitors; • announcement by competitors or new market entrants of their entry into or exit from the plant-based meat market; • overall conditions in our industry and the markets in which we operate; • market conditions or trends in the packaged food sales industry or in the economy as a whole; • addition or loss of significant customers or other developments with respect to significant customers; • adverse developments concerning our manufacturers or suppliers; • changes in laws or regulations applicable to our products or business; • our ability to effectively manage our growth and market expectations with respect to our growth; • speculation regarding public customer announcements or geographic expansion; • actual or anticipated changes in our growth rate relative to our competitors; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; • additions or departures of key personnel; • competition from existing products or new products that may emerge; • issuance of new or updated research or reports about us or our industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts; • our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; 48 • fluctuations in the valuation of companies perceived by investors to be comparable to us; • disputes or other developments related to proprietary rights, including patents, and our ability to obtain intellectual property protection for our products; • litigation or regulatory matters; • announcement or expectation of additional financing efforts; • our cash position; • our indebtedness and ability to pay such indebtedness, as well as our ability to comply with covenants under our credit agreement; • sales of our common stock by our stockholders; • issuance of equity or debt; • share price and volume fluctuations attributable to inconsistent trading volume levels of our common stock; • changes in accounting practices; • ineffectiveness of our internal controls; • short-selling of our common stock; • negative media or marketing campaigns undertaken by our competitors or lobbyists supporting the meat industry; • the public’s response to publicity relating to the health aspects or nutritional value of our products; • the effects of COVID-19 and any other pandemic, epidemic or other public health crisis; and • other events or factors, many of which are beyond our control.
The market price of our common stock has been and is likely to continue to be highly volatile and could be subject to wide fluctuations in response to many factors discussed in this “ Risk Factors ” section, including: • general economic, market and political conditions, including the impact of inflation and higher interest rates across the economy and negative effects on consumer confidence and spending levels; • a continued decrease in demand, and the underlying factors negatively impacting demand, in the plant-based meat category, which may continue to impact demand for our products; • actual or anticipated fluctuations in our financial condition and operating results, including fluctuations in our quarterly and annual results; • announcements of innovations by us or our competitors; • announcement by competitors or new market entrants of their entry into or exit from the plant-based meat market; • overall conditions in our industry and the markets in which we operate; • market conditions or trends in the packaged food sales industry or in the economy as a whole; • addition or loss of significant customers or other developments with respect to significant customers; • adverse developments concerning our manufacturers or suppliers; • changes in laws or regulations applicable to our products or business; • our ability to effectively manage our cost-reduction initiatives and market expectations with respect to our cost-reduction initiatives; • speculation regarding public customer announcements or geographic expansion; • actual or anticipated changes in our growth rate relative to our competitors; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; • additions or departures of key personnel; • competition from existing products or new products that may emerge; • issuance of new or updated research or reports about us or our industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts; • our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • disputes or other developments related to proprietary rights, including patents, and our ability to obtain intellectual property protection for our products; • litigation or regulatory matters; • announcement or expectation of additional financing efforts; • our cash position; • our indebtedness and ability to pay such indebtedness, as well as our ability to comply with covenants under our credit agreement; • sales of our common stock by our stockholders; • issuance of equity or debt; • share price and volume fluctuations attributable to inconsistent trading volume levels of our common stock; • changes in accounting practices; • ineffectiveness of our internal controls; • short-selling of our common stock; • negative media or marketing campaigns undertaken by our competitors or lobbyists supporting the meat industry; • the public’s response to publicity relating to the health aspects or nutritional value of our products; • the effects of COVID-19 and any other pandemic, epidemic or other public health crisis; and • other events or factors, many of which are beyond our control.
However, our strategic growth initiatives may not be adequate to support the long-term operations of our business, particularly under adverse circumstances, Furthermore, we may not be successful in implementing these initiatives or realizing our anticipated savings and efficiencies, including as a result of factors beyond our control.
In addition, our strategic initiatives may not be adequate to support the long-term operations of our business, particularly under adverse circumstances. Furthermore, we may not be successful in implementing these initiatives or realizing our anticipated savings and efficiencies, including as a result of factors beyond our control.
Although we believe these reductions will be an important part of the success of our cost-reduction initiatives, they may adversely affect employee morale, our culture and our ability to attract and retain critical employees. They may also negatively impact our ability to pursue new initiatives due to insufficient resources and personnel.
Although we believe these reductions are an important part of the success of our cost-reduction initiatives, they may adversely affect employee morale, our culture and our ability to attract and retain critical employees. They may also negatively impact our ability to pursue new initiatives due to insufficient resources and personnel.
In the event we have excess capacity or vacancy in any of our facilities or office spaces, we may sublease portions of the excess space to third parties and may be unable to sublease our excess space on favorable terms, or at all, or if we are able to sublease space but our subtenants fail to make lease payments to us or otherwise default on their obligations to us, we could incur substantial payment obligations to our landlords.
For example, in the event we have excess capacity or vacancy in any of our facilities or office spaces, we may sublease, assign or otherwise transfer portions of the excess space to third parties and may be unable to sublease, assign or otherwise transfer our excess space on favorable terms, or at all, or if we are able to sublease space but our subtenants fail to make lease payments to us or otherwise default on their obligations to us, we could incur substantial payment obligations to our landlords.
In our market, competition is based on, among other things, taste, nutritional profile, ingredients, texture, ease of integration into the consumer diet, low-carbohydrate, low-sugar, high fiber and protein, lack of cholesterol, soy, gluten and GMOs, convenience, price and promotion tactics, brand awareness and loyalty among customers, media spending, product variety and packaging, access to major retailer shelf space and retail locations, access to 32 major foodservice outlets and integration into menus, innovation and intellectual property protection on products.
In our market, competition is based on, among other things, taste, price and promotion tactics, nutritional profile, ingredients, texture, ease of integration into the consumer diet, low-carbohydrate, low-sugar, high fiber and protein, lack of cholesterol and GMOs, convenience, versatility, brand awareness and loyalty among customers, media spending, product variety and packaging, access to major retailer shelf space and retail locations, access to major foodservice outlets and integration into menus, innovation and intellectual property protection.
We encourage you to carefully review the full risk factors immediately following this summary as well as the other information in this report, including the section titled “ Management’s Discussion and Analysis of Financial Condition and Results of Operations, ” “ Note Regarding Forward-Looking Statements ,” and our consolidated financial statements and related notes, before deciding whether to invest in shares of our common stock.
We encourage you to carefully review the full risk factors immediately following this summary as well as the other information in this report, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Note Regarding Forward-Looking Statements,” and our consolidated financial statements and related notes, before deciding whether to invest in shares of our common stock.
In addition, timing of retail shelf resets are not within our control, and to the extent that retail customers change the timing of such events, reduce our in store-displays or are not able to restock our products effectively, sales of our products may be impaired and negatively impact our revenues.
In addition, timing of retail shelf resets are not within our control, and to the extent retail customers change the timing of such events, reduce our in store-displays, are out of stock of our products or are not able to restock our products effectively, sales of our products may be impaired and negatively impact our revenues.
We depend on cash flow from operations to pay our lease expenses. If our business does not generate sufficient cash flow from operating activities to fund these expenses, we may not be able to meet our lease obligations, which could have a material adverse effect on our financial condition and business.
If our business does not generate sufficient cash flow from operating activities to fund these expenses, we may not be able to meet our lease obligations, which could have a material adverse effect on our financial condition and business.
Risks Related to Our Products Food safety and food-borne illness incidents may materially adversely affect our business by exposing us to lawsuits, product recalls or regulatory enforcement actions, increasing our operating costs and reducing demand for our product offerings.
Risks Related to Our Products Food safety and food-borne illness incidents, or the perception of related risks, may materially adversely affect our business by exposing us to lawsuits, product recalls or regulatory enforcement actions, increasing our operating costs and reducing demand for our product offerings.
We cannot assure you that the steps we have taken to protect our intellectual property rights are adequate, that our intellectual property rights can be successfully defended and asserted in the future or that third parties will not infringe upon or misappropriate any such rights.
We cannot guarantee that the steps we have taken to protect our intellectual property rights are adequate, that our intellectual property rights can be successfully defended and asserted in the future or that third parties will not infringe upon or misappropriate any such rights.
Risk Factors Risks Related to Our Business Disruptions in the worldwide economy, including an economic recession, downturn, periods of inflation or economic uncertainty, have and may continue to adversely affect our business, results of operations and financial condition.
Risk Factors Risks Related to Our Business Disruptions in the worldwide economy, including an economic recession, downturn, periods of rising or high inflation or economic uncertainty, have adversely affected and may continue to adversely affect our business, results of operations and financial condition.
Our ability to ensure a continuing supply of ingredients at competitive prices depends on many factors beyond our control, such as the number and size of farms that grow certain crops such as Canadian, European and North American yellow peas, the vagaries of these farming businesses (including poor harvests impacting the quality of the peas grown), changes in national and world economic conditions, including as a result of COVID-19 or the outbreak of hostilities or war, tariffs and our ability to forecast our ingredient requirements.
Our ability to ensure a continuing supply of ingredients at competitive prices depends on many factors beyond our control, such as the number and size of farms that grow certain crops such as European and North American yellow peas, other plant-based proteins and avocados, the vagaries of these farming businesses (including poor harvests impacting the quality of the peas grown), changes in national and world economic conditions, including as a result of COVID-19 or the outbreak of hostilities or war, tariffs and our ability to forecast our ingredient requirements.
The impact of high inflation and the plant-based meat sector’s premium pricing relative to animal protein have caused and could continue to cause consumers to trade down into cheaper forms of protein, including animal meat. We have a history of losses, and we may be unable to achieve or sustain profitability.
The impact of high inflation and the plant-based meat sector’s premium pricing relative to animal protein have caused and could continue to cause consumers to trade down into cheaper forms of protein, including animal meat, beans and other non-animal meat protein sources. We have a history of losses, and we may be unable to achieve or sustain profitability.
In addition, it is possible that, once finalized, there could be unanticipated difficulties in initiating operations at the Campus Headquarters, including, but not limited to, IT system interruptions, other infrastructure support problems or the space may prove to be less conducive to our operations than currently anticipated.
In addition, it is possible that there could be unanticipated difficulties in initiating and maintaining operations at the Campus Headquarters, including, but not limited to, IT system interruptions, other infrastructure support problems or the space may prove to be less conducive to our operations than currently anticipated.
We cannot be certain that we will be able to continue to expand production and distribution of the Beyond Burger, or that customer demand for our other existing and future products will expand to allow such products to represent a larger percentage of our revenue than they do currently.
We cannot be certain that we will be able to continue to expand production and distribution of the Beyond Burger, or that customer demand for our other existing and future products, including the new Beyond IV platform, will expand to allow such products to represent a larger percentage of our revenue than they do currently.
Any increase in the cost of inputs to our production has led to higher costs for our products in our foodservice and retail channels and has negatively impacted and may continue to negatively impact our operating results and future profitability.
Increases in the cost of inputs to our production has led to higher costs for our products in our foodservice and retail channels and has negatively impacted and may continue to negatively impact our operating results and future profitability.
Generally, we expect to experience greater demand for certain of our products during the summer grilling season.
Generally, we expect to experience greater demand for certain of our products during the U.S. summer grilling season.
We intend to continue to expand our number of foodservice customers, both in the United States and internationally, as part of our growth strategy. This may require us to provide marketing and other financial incentives to our customers to assist in the promotion of our products.
We intend to continue efforts to expand our number of retail and foodservice customers, both in the United States and internationally, as part of our long-term growth strategy. This may require us to provide marketing and other financial incentives to our customers to assist in the promotion of our products.
If any of these third party providers were to experience significant interruptions in their business operations, terminate their agreements with the company, or fail to perform the services required under the terms of the company’s contracts with them, its own processing could be materially and adversely affected for an indefinite period of time.
If any of these third party providers were to experience significant interruptions in their business operations, terminate their agreements with the Company, or fail to perform the services required under the terms of our contracts with them, our business operations could be materially and adversely affected for an indefinite period of time.
Our ability to implement this growth strategy depends, among other things, on our ability to: • manage relationships with various suppliers, co-manufacturers, distributors, customers and other third parties, and expend time and effort to integrate new suppliers, co-manufacturers, distributors and customers into our fulfillment operations; • continue to compete in retail and foodservice channels; • secure placement in the meat case for our products; • increase our brand recognition and expand and maintain brand loyalty; • develop new product lines and extensions; and • expand into new geographic markets.
Our ability to implement this growth strategy depends, among other things, on our ability to: • successfully implement our cost-reduction initiatives and cost down strategy in the nearer term; • manage relationships with various suppliers, co-manufacturers, distributors, customers and other third parties, and expend time and effort to integrate new suppliers, co-manufacturers, distributors and customers into our fulfillment operations; • continue to compete in retail and foodservice channels; • secure placement in the meat case for our products; • increase our brand recognition and expand and maintain brand loyalty; • develop new product lines and extensions; and • expand into new geographic markets.
Damage or disruption to our collective supply, manufacturing or distribution capabilities resulting from severe weather, fires or evacuations related thereto, natural disasters, including climate-related events, pandemics (such as the COVID-19 pandemic) or other outbreaks of contagious diseases, agricultural diseases, cyber incidents, terrorism, governmental restrictions or mandates, political instability, trade restrictions, import restrictions, border closures, freight carrier availability, labor shortages, strikes or other labor unrest, the financial or operational instability of key suppliers and carriers, repairs or enhancements at facilities manufacturing or delivering our products or other reasons could impair our ability to source inputs or manufacture, sell or timely deliver our products.
Damage or disruption to our collective supply, manufacturing or distribution capabilities resulting from severe weather, fires or evacuations related thereto, natural disasters, including climate-related events, pandemics (such as the COVID-19 pandemic) or other outbreaks of contagious diseases, agricultural diseases, cyber incidents, security breaches, system failures, terrorism, governmental restrictions or mandates, political instability, trade restrictions, import restrictions, border closures, freight carrier availability, labor shortages, strikes or other labor unrest, the financial or operational instability of key suppliers and carriers, disruptions, repairs or enhancements at facilities manufacturing or delivering our products or other reasons have, in the past, impaired and could, in the future, impair our ability to source inputs or manufacture, sell or timely deliver our products.
Our ability to operate in China and Europe may be adversely affected by changes in, or our failure to comply with, Chinese or European laws and regulations. In addition, we are exposed to risks associated with our workforce in China and the Netherlands, including with respect to changes in employment and labor laws, which could increase our operating costs.
Our ability to operate in internationally may be adversely affected by changes in, or our failure to comply with, foreign laws and regulations. In addition, we are exposed to risks associated with our workforce in China and the Netherlands, including with respect to changes in employment and labor laws, which could increase our operating costs.
Food recalls could result in significant losses due to their costs, the destruction of product inventory, lost sales due to the unavailability of the product for a period of time and potential loss of existing distributors or customers and a potential negative impact on our ability to attract new customers due to negative consumer experiences or because of an adverse impact on our brand and reputation.
Food recalls and other food illness and food safety incidents could result in significant losses due to their costs, the destruction of raw materials or product inventory, lost sales due to the unavailability of the product for a period of time and potential loss of existing distributors or customers and a potential negative impact on our ability to attract new customers due to negative consumer experiences or because of an adverse impact on our brand and reputation.
The uncertainty resulting from the military conflict in Europe has given rise and may continue to give rise to increases in costs of goods and services, scarcity of certain ingredients, increased trade barriers or restrictions on global trade and may increase volatility in financial and capital markets, which may make it more difficult for us to raise additional capital.
The uncertainty resulting from the military conflicts in Europe and the Middle East have given rise and may continue to give rise to increases in costs of goods and services, scarcity of certain ingredients, increased trade barriers or restrictions on global trade and may increase volatility in financial and capital markets, which may make it more difficult for us to raise additional capital.
Events that adversely affect our suppliers of pea protein and other raw materials could impair our ability to obtain raw material inventory in the quantities at competitive prices that we desire.
Events that adversely affect our suppliers of pea protein and other raw materials, such as avocado oil, could impair our ability to obtain raw material inventory in the quantities at competitive prices that we desire.
The preparation of the Company’s consolidated financial statements in conformity with generally accepted accounting principles requires management to make significant estimates that affect the financial statements. Estimates are made at specific points in time and based on facts, historical experience and various other factors believed to be reasonable under the circumstances at such time.
The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make significant estimates that affect the financial statements. Estimates are made at specific points in time and based on facts, historical experience and various other factors believed to be reasonable under the circumstances at such time.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSee Note 10 , Commitments and Contingencies , to the Notes to Consolidated Financial Statements included elsewhere in this report. Given our intention to reduce our overall operating expenses and cash expenditures, on February 14, 2023, we terminated the lease of our Commerce, California commercialization center.
Biggest changeSee Note 10 , Commitments and Contingencies, to the Notes to Consolidated Financial Statements included elsewhere in this report. (2) Effective November 1, 2023, we partially terminated the lease of our former El Segundo, California lab and innovation space reducing the area leased from approximately 30,000 square feet to 16,300 square feet.
Our principal facilities, which are leased except where otherwise indicated, are as follows: Primary Use Location Approximate Area (SF) Expiration of Lease United States: Production of woven protein and dry blend flavor systems Columbia, MO 26,000 6/30/2025 Production of woven protein and dry blend flavor systems Columbia, MO 64,000 7/31/2025 Warehousing and dry blending Columbia, MO 142,000 Owned Production of finished goods Devault, PA 86,000 Owned Corporate headquarters, lab and innovation (“Campus Headquarters”) (1) El Segundo, CA 282,000 11/30/2033 Lab and innovation space El Segundo, CA 30,000 1/31/2024 International: Production of woven protein and dry blend flavor systems Enschede, the Netherlands 46,000 Owned Production of woven protein and finished goods Jiaxing, China 38,000 9/09/2027 Research and development Shanghai, China 12,000 1/11/2030 ______________ (1) As of December 31, 2022, approximately 72,000 rentable square feet of this facility has been completed, delivered and occupied.
Our principal facilities, which are leased except where otherwise indicated, are as follows: Primary Use Location Approximate Area (SF) Expiration of Lease United States: Production of woven protein and dry blend flavor systems Columbia, MO 26,000 6/30/2025 Production of woven protein and dry blend flavor systems Columbia, MO 64,000 7/31/2025 Warehousing and dry blending Columbia, MO 142,000 Owned Production of finished goods Devault, PA 86,000 Owned Corporate headquarters, lab and innovation (“Campus Headquarters”) (1) El Segundo, CA 282,000 11/30/2033 Lab and innovation space (2) El Segundo, CA 16,300 1/31/2024 International: Production of woven protein and dry blend flavor systems Enschede, the Netherlands 46,000 Owned Production of woven protein and finished goods Jiaxing, China 38,000 9/09/2027 Research and development Shanghai, China 12,000 1/11/2030 ______________ (1) As of December 31, 2023, Phase 1-A and Phase 1-B consisting of approximately 142,000 rentable square feet has been completed and delivered to the Company.
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This lease expired subsequent to the year ended December 31, 2023 on January 31, 2024. In 2021, we assumed an operating lease for a building in Commerce, California to house our commercialization center, which was terminated in February 2023. In 2021, we entered into a lease agreement for our Campus Headquarters in El Segundo, California.
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In 2022, upon completion of the Phase1-A, we moved our Innovation team from our Manhattan Beach Project Innovation Center to the new campus facility. In 2023, upon completion of the tenant improvements associated with Phase 1-B, we moved our headquarters, sales and marketing operations into the new campus facility.
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On June 30, 2023, we terminated the lease of our former headquarters, also in El Segundo, California. In 2022, we entered into an agreement to purchase certain property on a neighboring site to our manufacturing facility in Europe located in Enschede, the Netherlands, for cash consideration of approximately €6.3 million, of which a €0.9 million deposit was made during 2022.
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Given our intention to reduce our overall operating expenses and cash expenditures, subsequent to the year ended December 31, 2023, on February 2, 2024, we terminated the purchase agreement and entered into a lease agreement with the subsequent purchaser of the property to lease the approximately 114,000 square foot property.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFor a description of our material pending legal proceedings, please see Note 10 , Commitments and Contingencies , of the Notes to Consolidated Financial Statements included elsewhere in this report.
Biggest changeFor a description of our material pending legal proceedings, please see Note 10 , Commitments and Contingencies , to the Notes to Consolidated Financial Statements included elsewhere in this report.
However, the final results of any current or future proceeding cannot be predicted with certainty, 52 and until there is final resolution on any such matter that we may be required to accrue for, we may be exposed to loss in excess of the amount accrued.
However, the final results of any current or future proceeding cannot be predicted with certainty, and until there is final resolution on any such matter that we may be required to accrue for, we may be exposed to loss in excess of the amount accrued.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 53 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 53 Item 6. [Reserved] 54 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 55 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 75 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 58 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 58 Item 6. [Reserved] 59 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 60 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 83 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividends The Company has not declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock. 53 Performance Graph The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, or otherwise subject to the liabilities under the Securities Act or Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.
Biggest changePerformance Graph The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, or otherwise subject to the liabilities under the Securities Act or Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.
The following graph depicts the total cumulative stockholder return on our common stock from May 2, 2019, the first day of trading of our common stock on the Nasdaq Global Select Market, through December 31, 2022, relative to the performance of the NASDAQ Composite Index and the S&P Food and Beverage Select Industry Index, a peer group that includes Beyond Meat.
The following graph depicts the total cumulative stockholder return on our common stock from May 2, 2019, the first day of trading of our common stock on the Nasdaq Global Select Market, through December 31, 2023, relative to the performance of the NASDAQ Composite Index and the S&P Food and Beverage Select Industry Index, a peer group that includes Beyond Meat.
Holders As of February 28, 2023, there were 137 holders of record of our common stock. This number does not include beneficial owners whose shares are held by nominees in street name.
Holders As of February 28, 2024, there were 463 holders of record of our common stock. This number does not include beneficial owners whose shares are held by nominees in street name.
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Dividends The Company has not declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeIn response to the current difficult environment and negative impact of these factors on our business and the overall plant-based category, beginning in the fourth quarter of 2022 we are pivoting our focus toward sustainable long-term growth supported by three pillars: (1) driving margin recovery and operating expense reduction through the implementation of lean value streams across our beef, pork and poultry platforms; (2) inventory reduction and cash flow generation through more efficient inventory management; and (3) focusing on near-term retail and foodservice growth drivers while supporting strategic key long-term partners and opportunities. 55 Our net revenues, gross profit, gross margin, earnings and cash flows have been and may continue to be adversely impacted in 2023 by the following: • changes in our product mix including the launch of new products, which may carry lower margin profiles relative to existing products due in part to early cost of production inefficiencies; • weak demand in the retail channel due to slower category growth, particularly for refrigerated plant-based meat, and increased competitive activity, including the deceleration of plant-based meat across Europe and our ability to successfully launch extended shelf-life products; • the impact of high inflation and the plant-based meat sector’s premium pricing relative to animal protein, including causing consumers to trade down into cheaper forms of protein, including animal meat; • our decreased revenue forecast negatively impacting capacity utilization, which could also give rise to underutilization fees and termination fees to exit certain supply chain arrangements and/or the write-off of certain equipment, driving less leverage on fixed costs and delaying the speed at which cost savings initiatives impact our financial results; • changes in forecasted demand, particularly for Beyond Meat Jerky; • managing inventory levels, including sales to the liquidation channel and the level of inventory reserves; • price reductions, intended to improve price competitiveness relative to competing products; • increased unit cost of goods sold due to lower production volumes in response to weaker demand, which would adversely impact coverage of fixed production costs within our manufacturing facilities; • increased unit cost of goods due to inflation, rising interest rates, higher transportation, raw materials, energy, labor and supply chain costs; • increased promotional programs and trade discounts to our retail and foodservice customers, including to bolster support for our core lines, and shifts in product and channel mix resulting in negative impacts on our gross margins; • potential disruption to our supply chain generally caused by distribution and other logistical issues; • continued effects of the COVID-19 pandemic; and • labor needs at the Company as well as in the supply chain and at customers.
Biggest changeOur net revenues, gross profit, gross margin, earnings and cash flows have been and may continue to be adversely impacted in 2024 and beyond by the following: • unfavorable changes in our product sales mix, including the launch of new products, which may carry lower margin profiles relative to existing products, increased sales to strategic QSR customers, generally carrying a lower selling price per pound as a percentage of our total sales, and changing demand for our core products; • continued weak demand and its resultant impact on our sales due to slower category growth, particularly for refrigerated plant-based meat, unfavorable changes in consumers’ perceptions about the health attributes of plant-based meats and increased competitive activity; • deceleration of the adoption of plant-based meat across Europe and our ability to successfully launch extended shelf-life products, which could negatively impact our ability to expand distribution of our products; • the impact of high inflation and the plant-based meat sector’s premium pricing relative to animal protein, which have caused and could continue to cause consumers to trade down into cheaper forms of protein, including animal meat, beans and other non-animal meat protein sources; • negative impacts on capacity utilization as a result of lower than anticipated revenues, which have in the past and could in the future give rise to increased costs per unit, underutilization fees and termination fees and other costs to exit certain supply chain arrangements and product lines, and/or the write-down or write-off of certain equipment, driving less leverage on fixed costs and delaying the speed at which cost savings initiatives positively impact our financial results; • changes in forecasted demand, including for our core products—namely Beyond Burger, Beyond Beef, and Beyond Sausage—and others; • changes in operating and distribution activities related to Beyond Meat Jerky, including the impact of discontinuing the product line; • managing inventory levels, including sales to liquidation channels and the level of inventory provision; • changes in our pricing strategy, including actions intended to improve our price competitiveness relative to competing products or to improve profitability; • increased unit cost of goods sold due to lower production volumes in response to weaker demand, which has and may continue in the future to adversely impact coverage of fixed production costs within our manufacturing facilities; • increased unit cost of goods sold due to input cost inflation, including higher transportation, raw materials, energy, labor and supply chain costs; • increased promotional programs and trade discounts or a failure or reduction in the efficacy of such programs to our retail and foodservice customers, including to bolster support for our core products, and shifts in product and channel mix resulting in negative impacts on our gross margins; • potential disruption to our supply chain generally caused by distribution and other logistical issues, including the impact of cyber incidents at suppliers and vendors; and • labor needs at the Company, as well as in the supply chain and at customers.
Lower customer orders ahead of holidays, shifts in customer shelf reset activity and changes in the order patterns of one or more of our large retail customers could cause a significant fluctuation in our quarterly results and could have a disproportionate effect on our results of operations for the entire fiscal year.
Lower customer orders ahead of holidays, shifts in customer shelf reset activity and changes in order patterns of one or more of our large retail customers could cause a significant fluctuation in our quarterly results and could have a disproportionate effect on our results of operations for the entire fiscal year.
We routinely offer sales discounts and promotions through various programs to customers and consumers. These programs include rebates, temporary on-shelf price reductions, off-invoice discounts, retailer 58 advertisements, product coupons and other trade activities.
We routinely offer sales discounts and promotions through various programs to customers and consumers. These programs include rebates, temporary on-shelf price reductions, off-invoice discounts, retailer advertisements, product coupons and other trade activities.
Discussions of 2020 items and year-to-year comparisons between 2021 and 2020 that are not included in this document can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this document can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
We believe that the estimates, assumptions and judgments involved in the accounting policies described below have the greatest potential impact on our financial statements because they involve the most difficult, 73 subjective or complex judgments about the effect of matters that are inherently uncertain. Therefore, we consider these to be our critical accounting policies.
We believe that the estimates, assumptions and judgments involved in the accounting policies described below have the greatest potential impact on our financial statements because they involve the most difficult, subjective or complex judgments about the effect of matters that are inherently uncertain. Therefore, we 80 consider these to be our critical accounting policies.
Recently Adopted Accounting Pronouncements Please refer to Note 2 , Summary of Significant Accounting Policies, to the Notes to Consolidated Financial Statements included elsewhere in this report for a discussion of recently adopted accounting pronouncements and new accounting pronouncements that may impact us. 74
Recently Adopted Accounting Pronouncements Please refer to Note 2 , Summary of Significant Accounting Policies, to the Notes to Consolidated Financial Statements included elsewhere in this report for a discussion of recently adopted accounting pronouncements and new accounting pronouncements that may impact us. 82
In connection with our IPO, we sold an aggregate of 11,068,750 shares of our common stock at a public offering price of $25.00 per share and received approximately $252.4 million in net proceeds. On August 5, 2019, we completed a secondary public offering of our common stock in which we sold 250,000 shares and certain selling stockholders sold 3,487,500 shares.
In connection with our IPO, we sold an aggregate of 11,068,750 shares of our common stock at a public offering price of $25.00 per share and received approximately $252.4 million in net proceeds. In 2019, we completed a secondary public offering of our common stock in which we sold 250,000 shares and certain selling stockholders sold 3,487,500 shares.
In addition, because we do not have any purchase commitments from our distributors or customers, the amount of net revenues we recognize will vary from period to period depending on the volume, timing and the channels through which our products are sold, and the impact of customer orders ahead of holidays, causing variability in our results.
In addition, because we do not have any purchase commitments from our distributors or customers, the amount of net revenues we recognize has varied and will vary in the future, from period to period depending on the volume, timing and the channels through which our products are sold, and the impact of customer orders ahead of holidays, causing variability in our results.
Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including those set forth in Part I, Item 1A, “Risk Factors,” and “Note Regarding Forward-Looking Statements” included elsewhere in this report.
Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including those set forth in Part I, Item 1A , “Risk Factors,” and “ Note Regarding Forward-Looking Statements ” included elsewhere in this report.
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this document generally discusses 2022 and 2021 items and year-to-year comparisons between 2022 and 2021.
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this document generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
The Company’s performance obligation is typically defined as the accepted purchase order, the direct-to-consumer order, or the contract, with the customer which requires the Company to deliver the requested products at agreed upon prices at the time and location of the customer’s choice.
Our performance obligation is typically defined as the accepted purchase order, the direct-to-consumer order, or the contract, with the customer which requires us to deliver the requested products at agreed upon prices at the time and location of the customer’s choice.
For the year ended December 31, 2022, net cash used in investing activities was $87.5 million and consisted of $70.5 million in cash outflows for purchases of property, plant and equipment, primarily driven by continued investments in production equipment and facilities related to our capacity expansion initiatives and international expansion, and $13.3 million for investment in TPP.
In 2022, net cash used in investing activities was $87.5 million and consisted of $70.5 million in cash outflows for purchases of property, plant and equipment, primarily driven by continued investments in production equipment and facilities related to our capacity expansion initiatives and international expansion, and $13.3 million for investment in TPP.
The letter of credit is secured by a $12.6 million deposit reflected in our consolidated balance sheet as “Restricted cash” as of December 31, 2022. See Note 4 , Leases , and Note 10 , Commitments and Contingencies , to the Notes to Consolidated Financial Statements included elsewhere in this report.
The letter of credit is secured by a $12.6 million deposit reflected in our consolidated balance sheet as “Restricted cash, non-current” as of December 31, 2023 and 2022. See Note 4 , Leases, and Note 10 , Commitments and Contingencies, to the Notes to Consolidated Financial Statements included elsewhere in this report.
See Note 3 , Restructuring , and Note 10 , Commitments and Contingencies , to the Notes to Consolidated Financial Statements, included elsewhere in this report. Loss from Operations Loss from operations in 2022 was $342.8 million compared to loss from operations of $174.9 million in the prior year.
See Note 3 , Restructuring , and Note 10 , Commitments and Contingencies , to the Notes to Consolidated Financial Statements, included elsewhere in this report. Loss from Operations Loss from operations in 2023 was $341.9 million compared to loss from operations of $342.8 million in the prior year.
(“BYND JX”). Income Tax Expense For 2022 and 2021, we recorded an income tax expense of $32,000 and $60,000, respectively. These amounts primarily consist of income taxes for state jurisdictions which have minimum tax requirements. No tax benefit was provided for losses incurred because those losses were offset by a full valuation allowance.
Income Tax Expense For 2023 and 2022, we recorded an income tax expense of $5,000 and $32,000, respectively. These amounts primarily consist of income taxes for state jurisdictions which have minimum tax requirements. No tax benefit was provided for losses incurred because those losses were offset by a full valuation allowance.
Gross margin improvement may also be negatively impacted by the impact of lower demand forecast, inflation, increasing labor costs, materials costs and transportation costs.
Gross margin improvement may also be negatively impacted by the impact of inflation, increasing labor costs, materials costs and transportation costs.
As disclosed in Note 2 , Summary of Significant Accounting Policies—Shipping and Handling Costs , in the Notes to Consolidated Financial Statements included elsewhere in this report, we include outbound shipping and handling costs within SG&A expenses.
See Note 6 , Property, Plant and Equipment , to the Notes to Consolidated Financial Statements included elsewhere in this report. As disclosed in Note 2 , Summary of Significant Accounting Policies—Shipping and Handling Costs , in the Notes to Consolidated Financial Statements included elsewhere in this report, we include outbound shipping and handling costs within SG&A expenses.
The Company reviews inventory quantities on hand and records a provision for excess and obsolete inventory based primarily on historical and forecasted demand, estimated shelf life of various raw materials and packaging, work in process and finished goods inventory, as well as the age of the inventory, among other factors.
We review inventory quantities on hand and record a provision for excess and obsolete inventory based primarily on historical and forecasted demand, estimated shelf life of various raw materials and packaging, work in process and finished goods inventory, as well as the age of the inventory, among other factors.
As of December 2022, Beyond Meat Branded products were available at approximately 190,000 retail and foodservice outlets in more than 80 countries worldwide, across mainstream grocery, mass merchandiser, club store, convenience store and natural retailer channels, and various food-away-from-home channels, including restaurants, foodservice outlets and schools.
As of December 2023, Beyond Meat branded products were available at approximately 133,000 retail and foodservice outlets in more than 65 countries worldwide, across mainstream grocery, mass merchandiser, club store and natural retailer channels, and various food-away-from-home channels, including restaurants, foodservice outlets and schools.
In addition to product cost, inventory costs include expenditures such as direct labor and certain supply and overhead expenses including in-bound shipping and handling costs incurred in bringing the inventory to its existing condition and location. Inventories are comprised primarily of raw materials, direct labor and overhead costs.
We account for inventory using the weighted average cost method. In addition to product cost, inventory costs include expenditures such as direct labor and certain supply and overhead expenses including in-bound shipping and handling costs incurred in bringing the inventory to its existing condition and location. Inventories are comprised primarily of raw materials, direct labor and overhead costs.
At the end of each accounting period, we recognize a contra asset for estimated sales discounts that have been incurred but not paid which totaled $4.6 million and $3.6 million as of December 31, 2022 and 2021, respectively.
At the end of each accounting period, we recognize a contra asset to “Accounts receivable” for estimated sales discounts that have been incurred but not paid which totaled $6.9 million and $4.6 million as of December 31, 2023 and 2022, respectively.
Some of these limitations are: • Adjusted EBITDA excludes depreciation and amortization expense and, although these are non-cash expenses, the assets being depreciated may have to be replaced in the future increasing our cash requirements; • Adjusted EBITDA does not reflect interest expense, or the cash required to service our debt, which reduces cash available to us; • Adjusted EBITDA does not reflect income tax payments that reduce cash available to us; • Adjusted EBITDA does not reflect restructuring expenses that reduce cash available to us; • Adjusted EBITDA does not reflect expenses attributable to COVID-19 that reduce cash available to us; • Adjusted EBITDA does not reflect share-based compensation expense and therefore does not include all of our compensation costs; • Adjusted EBITDA does not reflect Other, net, including interest income, loss on extinguishment of debt and foreign currency transaction gains and losses, that may increase or decrease cash available to us; and • other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure. 66 The following table presents the reconciliation of Adjusted EBITDA to its most comparable GAAP measure, net loss, as reported (unaudited): Year Ended December 31, (in thousands) 2022 2021 2020 Net loss, as reported $ (366,137) $ (182,105) $ (52,752) Income tax expense 32 60 72 Interest expense 3,966 3,648 2,576 Depreciation and amortization expense 32,582 21,663 13,299 Restructuring expenses (1) 17,259 15,794 6,430 Share-based compensation expense 33,857 27,698 27,279 Expenses attributable to COVID-19 — — 14,137 Other, net (2) 420 487 759 Adjusted EBITDA $ (278,021) $ (112,755) $ 11,800 Net loss as a % of net revenues (87.4) % (39.2) % (13.0) % Adjusted EBITDA as a % of net revenues (66.4) % (24.3) % 2.9 % _____________ (1) Primarily comprised of legal and other expenses associated with the dispute with a co-manufacturer with whom an exclusive supply agreement was terminated in May 2017.
Some of these limitations are: • Adjusted EBITDA excludes depreciation and amortization expense and, although these are non-cash expenses, the assets being depreciated may have to be replaced in the future increasing our cash requirements; • Adjusted EBITDA does not reflect interest expense, or the cash required to service our debt, which reduces cash available to us; • Adjusted EBITDA does not reflect income tax payments that reduce cash available to us; • Adjusted EBITDA does not reflect restructuring expenses that reduce cash available to us; • Adjusted EBITDA does not reflect share-based compensation expense and therefore does not include all of our compensation costs; • Adjusted EBITDA does not reflect Other, net, including interest income, loss on extinguishment of debt and foreign currency transaction gains and losses, that may increase or decrease cash available to us; and • other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure. 72 The following table presents the reconciliation of Adjusted EBITDA to its most comparable GAAP measure, net loss, as reported (unaudited): Year Ended December 31, (in thousands) 2023 2022 2021 Net loss, as reported $ (338,144) $ (366,137) $ (182,105) Income tax expense 5 32 60 Interest expense 3,955 3,966 3,648 Depreciation and amortization expense 48,094 32,582 21,663 Restructuring expenses (1) (631) 17,259 15,794 Share-based compensation expense 29,098 33,857 27,698 Other, net (2)(3) (11,616) 420 487 Adjusted EBITDA $ (269,239) $ (278,021) $ (112,755) Net loss as a % of net revenues (98.5) % (87.4) % (39.2) % Adjusted EBITDA as a % of net revenues (78.4) % (66.4) % (24.3) % _____________ (1) Primarily comprised of legal and other expenses associated with the dispute with a co-manufacturer with whom an exclusive supply agreement was terminated in May 2017.
Foodservice Net revenues from restaurant and foodservice sales to the U.S. market International Retail Net revenues from retail sales to international markets, including Canada International Foodservice Net revenues from restaurant and foodservice sales to international markets, including Canada The following factors and trends in our business have driven net revenue growth over prior periods and are expected to be key drivers of our net revenue growth over time, subject to the challenges discussed above: • increased penetration across our retail channel, including mainstream grocery, mass merchandiser, club store, convenience store and natural retailer channels, and our foodservice channel, including increased desire by foodservice establishments, including large FSR and/or global QSR customers, to add plant-based products to their menus and to highlight these offerings; • the strength and breadth of our partnerships with global QSR restaurants and retail and foodservice customers; • the success of our pivot to focus on sustainable long-term growth, including focusing on near-term retail and foodservice growth drivers while supporting strategic key long-term partners and opportunities; • distribution expansion, increased sales velocity, household penetration, repeat purchases, buying rates (amount spent per buyer) and purchase frequency across our channels; • increased international sales of our products across geographies, markets and channels as we seek to expand the breadth and depth of our international distribution and grow our numbers of international customers; • our ability to accurately forecast demand for our products and manage our inventory; • our operational effectiveness and ability to fulfill orders in full and on time; • our continued innovation and product commercialization, including enhancing existing products and introducing new products across our plant-based platforms that appeal to a broad range of consumers, specifically those who typically eat animal-based meat; • enhanced marketing efforts as we continue to build our brand, amplify our value proposition around taste, health and planet, serve as a best-in-class partner to both retail and foodservice customers to support product development and category management, and drive consumer adoption of our products; • overall market trends, including consumer awareness and demand for nutritious, convenient and high protein plant-based foods; and • localized production and third-party partnerships to improve our cost of production and increase the availability and speed with which we can get our products to customers internationally.
The following factors and trends in our business have driven net revenue growth over prior periods and are expected to be key drivers of our net revenue growth over time, subject to the challenges discussed above: • increased penetration across our retail channel, including mainstream grocery, mass merchandiser, club store and natural retailer channels, and our foodservice channel, including increased desire by foodservice establishments, including large Full Service Restaurant and/or global QSR customers, to add plant-based products to their menus and to highlight and retain these offerings; • the strength and breadth of our partnerships with global QSR restaurants and retail and foodservice customers; • the success of our pivot to focus on sustainable long-term growth, including focusing on near-term retail and foodservice growth drivers while supporting strategic key long-term partners and opportunities, and intensifying focus on channels and geographies that are exhibiting revenue growth; • distribution expansion, increased sales velocity, household penetration, repeat purchases, buying rates (amount spent per buyer) and purchase frequency across our channels, including the success of promotional programs at attracting new users to the plant-based meat category; • increased international sales of our products across geographies, markets and channels as we seek to expand the breadth and depth of our international distribution and grow our numbers of international customers; • our operational effectiveness and ability to fulfill orders in full and on time; • our continued innovation and product commercialization, including enhancing existing products such as the recent announcement of our Beyond IV generation of products, and introducing new products across our plant-based platforms that appeal to a broad range of consumers, specifically those who typically eat animal-based meat; • enhanced marketing efforts and the success thereof, as we continue to build our brand, use our portfolio and marketing to directly counter misinformation about our products and category, amplify our value proposition around taste, health and planet, serve as a best-in-class partner to both retail and foodservice customers to support product development and category management, and drive consumer adoption of our products; • investment in in-store execution and field resources focused on shelf availability and presentation, particularly in the U.S. refrigerated meat case, to drive increased sales; • overall market trends, including consumer awareness and demand for nutritious, convenient and high protein plant-based foods; and • localized production and third party partnerships to improve our cost of production and increase the availability, accessibility and speed with which we can get our products to customers internationally.
Selling, General and Administrative (“SG&A”) Expenses SG&A expenses consist primarily of selling, marketing and administrative expenses, including personnel and related expenses, share-based compensation, outbound shipping and handling costs, non-manufacturing lease expense, depreciation and amortization expense on non-manufacturing and non-research and development assets, consulting fees and other non-production operating expenses.
Selling, General and Administrative (“SG&A”) Expenses SG&A expenses consist primarily of selling, marketing and administrative expenses, including personnel and related expenses, share-based compensation, outbound shipping and handling costs, non-manufacturing lease expense, depreciation and amortization expense on non-manufacturing and non-research and development assets, charges related to asset write-offs including loss on sale and write-down of fixed assets, consulting fees and other non-production operating expenses.
Purchase Commitments On July 27, 2022, we entered into an agreement to purchase certain property on a neighboring site to our manufacturing facility in Europe located in Enschede, the Netherlands, for cash consideration of approximately €6.3 million, of which a €0.9 million deposit was made during 2022. The purchase is expected to close in the second half of 2023.
In 2022, we entered into an agreement to purchase certain property on a neighboring site to our manufacturing facility in Europe located in Enschede, the Netherlands, for cash consideration of approximately €6.3 million, of which a €0.9 million deposit was made during 2022.
We incurred one-time cash charges of approximately $4 million in connection with the reduction in force of October 2022, primarily consisting of notice period and severance payments, employee benefits and related costs. The majority of these charges were incurred in the fourth quarter of 2022, and the reduction-in-force was substantially completed by the end of 2022.
In 2023, we incurred one-time cash charges of approximately $1.8 million in connection with the reduction-in-force, primarily consisting of notice period and severance payments, employee benefits and related costs. These charges were incurred in the fourth quarter of 2023, and the reduction-in-force was substantially complete by the end of 2023.
See Note 7 , Debt , to the Notes to Consolidated Financial Statements included elsewhere in this report.
For a discussion about the Notes, see Note 7 , Debt, to the Notes to Consolidated Financial Statements included elsewhere in this report.
The Company generally does not offer warranties or a right to return on the products it sells except in the instance of a product recall or other limited circumstances. Revenue is measured as the amount of consideration the Company expects to receive in exchange for fulfilling the performance obligation.
We generally do not offer warranties or a right to return on the products we sell except in the instance of a product recall or other limited circumstances. Revenue is measured as the amount of consideration we expect to receive in exchange for fulfilling the performance obligation.
Components of Our Results of Operations and Trends and Other Factors Affecting Our Business Net Revenues We generate net revenues primarily from sales of our products to our customers across mainstream grocery, mass merchandiser, club store, convenience store and natural retailer channels, and various food-away-from-home channels, including restaurants, foodservice outlets and schools, mainly in the United States. 57 We present our net revenues by geography and distribution channel as follows: Distribution Channel Description U.S.
Components of Our Results of Operations and Trends and Other Factors Affecting Our Business Net Revenues We generate net revenues primarily from sales of our products to our customers across mainstream grocery, mass merchandiser, club store and natural retailer channels, and various food-away-from-home channels, including restaurants, foodservice outlets and schools, mainly in the United States and the EU.
We expect research and development expenses in 2023 to decrease from the levels in 2022 as a result of the reduction in force implemented in October 2022 and as we focus on reducing and optimizing operating expenses more broadly.
We decreased our research and development expenses in 2023 and expect research and development expenses in 2024 to decrease further from the levels in 2023 primarily as a result of the reduction-in-force implemented in November 2023 and as we focus on reducing and optimizing operating expenses more broadly.
Our cost of goods sold primarily consists of the cost of raw materials and ingredients for our products, co-manufacturing fees, direct and indirect labor and certain supply costs, in-bound and internal shipping and handling costs incurred in manufacturing our products, warehouse storage fees, plant and equipment overhead, depreciation and amortization expense, cost of packaging our products, inventory write-offs and reserves.
Our cost of goods sold primarily consists of the cost of raw materials including ingredients and packaging, co-manufacturing fees, direct and indirect labor and certain supply costs, inbound and internal shipping and handling costs incurred in manufacturing our products, warehouse storage fees, plant and equipment overhead, depreciation and amortization expense, provision for excess and obsolete inventory, and accelerated depreciation on write-offs and disposals of certain fixed assets.
Restructuring Expenses As a result of the termination in May 2017 of an exclusive supply agreement with one of our co- manufacturers due to non-performance under the agreement, we recorded restructuring expenses of $17.3 million and $15.8 million in 2022 and 2021, respectively, primarily related to legal and other expenses associated with the dispute.
Restructuring Expenses As a result of the termination in May 2017 of an exclusive supply agreement with one of our co- manufacturers due to non-performance under the agreement, we recorded a credit of $(0.6) million, primarily driven by a reversal of certain accruals in 2023 and restructuring expenses of $17.3 million in 2022, primarily related to legal and other expenses associated with the dispute.
Total Other Expense, Net Total other expense, net in the year ended December 31, 2022 of $4.4 million consisted primarily of $4.0 million in interest expense from amortization of debt issuance costs and $4.9 million in foreign currency transaction losses, partially offset by $4.5 million in interest income.
Total other expense, net, in the year ended December 31, 2022 of $4.4 million consisted primarily of $4.0 million in interest expense from the amortization of convertible debt issuance costs and $4.9 million in realized and unrealized foreign currency transaction losses due to unfavorable changes in foreign currency exchange rates of the Euro and Chinese Yuan, partially offset by $4.5 million in interest income.
See Note 7 , Debt , to the Notes to Consolidated Financial Statements included elsewhere in this report. Liquidity Outlook In 2023, our cash from operations could be affected by various risks and uncertainties, including, but not limited to, the risks detailed in Part I, Item 1A , “Risk Factors,” and “Note Regarding Forward-Looking Statements” included elsewhere in this report.
Liquidity Outlook In 2024, our cash from operations could be affected by various risks and uncertainties, including, but not limited to, the risks detailed in Part I, Item 1A , Risk Factors, and Note Regarding Forward-Looking Statements included elsewhere in this report.
See Note 10 , Commitments and Contingencies , to the Notes to Consolidated Financial Statements included elsewhere in this report. (3) Consists of payments under various financing leases for certain equipment. (4) Includes principal amount under our Notes issued March 2021. See Note 7 , Debt , to the Notes to Consolidated Financial Statements included elsewhere in this report.
(2) Excludes obligations under Campus Lease, except for those relating to Phase 1-A and Phase 1-B. See Note 10 , Commitments and Contingencies , to the Notes to Consolidated Financial Statements included elsewhere in this report. (3) Consists of payments under various financing leases for certain equipment. (4) Includes principal amount under our Notes issued March 2021.
Year Ended December 31, (in thousands) 2022 2021 2020 Cash (used in) provided by: Operating activities $ (320,244) $ (301,370) $ (39,995) Investing activities $ (87,527) $ (147,479) $ (74,900) Financing activities $ 276 $ 1,022,322 $ (1,762) Net Cash Used in Operating Activities For the year ended December 31, 2022, we incurred a net loss of $366.1 million, which was the primary reason for net cash used in operating activities of $320.2 million.
Year Ended December 31, (in thousands) 2023 2022 2021 Cash (used in) provided by: Operating activities $ (107,825) $ (320,244) $ (301,370) Investing activities $ (9,491) $ (87,527) $ (147,479) Financing activities $ (550) $ 276 $ 1,022,322 Net Cash Used in Operating Activities In 2023, we incurred a net loss of $338.1 million, which was the primary reason for net cash used in operating activities of $107.8 million.
In addition, in an environment of uncertainty from recessionary and inflationary pressures, general softness in the plant-based category, competition and other factors impacting our business, including uncertainty around the long-term impacts of COVID-19, we are unable to assess the ultimate impact on the demand for our products as a result of seasonality.
In an environment of heightened uncertainty from recessionary and inflationary pressures, prolonged weakness in the plant-based meat category, competition and other factors impacting our business, we are unable to assess the ultimate impact on the demand for our products as a result of seasonality.
Prior to our IPO, we financed our operations through private sales of equity securities and through sales of our products. Since our inception and through our IPO, we raised a total of $199.5 million from the sale of convertible preferred stock, including through sales of convertible notes which were converted into preferred stock, net of costs associated with such financings.
We finance our operations primarily through sales of our products and existing cash. We raised a total of $199.5 million from the sale of convertible preferred stock, including through sales of convertible notes which were converted into preferred stock, net of costs associated with such financings.
We expect SG&A expenses in 2023 to decrease from the levels in 2022, as we focus on reducing and optimizing operating expenses more broadly, including as part of the implementation of lean value streams across our beef, pork and poultry platforms. On August 3, 2022, we announced a reduction-in-force affecting approximately 4% of our global workforce.
We decreased SG&A expenses in 2023 and expect SG&A expenses in 2024 to decrease further from the levels in 2023, as we focus on reducing and optimizing operating expenses more broadly, including as part of the implementation of lean value streams across our beef, pork and poultry platforms.
The decrease in net revenue per pound was primarily due to higher trade discounts and changes in sales mix.
The increase in net revenue per pound was primarily due to changes in product sales mix, partially offset by higher trade discounts.
China Investment and Lease Agreement On September 22, 2020, we and our subsidiary, BYND JX, entered into an investment agreement with the Administrative Committee (the “JX Committee”) of the Jiaxing Economic & Technological Development Zone (the “JXEDZ”) pursuant to which, among other things, BYND JX has agreed to make certain investments in the JXEDZ in two phases of development, and we have agreed to guarantee certain repayment obligations of BYND JX under such agreement. 71 During Phase 1, we agreed to invest $10.0 million as the registered capital of BYND JX in the JXEDZ through an intercompany investment in BYND JX and BYND JX agreed to lease a facility in the JXEDZ for a minimum of two years.
China Investment and Lease Agreement In 2020, we and our subsidiary, BYND JX, entered into an investment agreement with the Administrative Committee (the “JX Committee”) of the Jiaxing Economic & Technological Development Zone (the “JXEDZ”) pursuant to which, among other things, BYND JX has agreed to make certain investments in the JXEDZ in two phases of development, and we have agreed to guarantee certain repayment obligations of BYND JX under such agreement.
We sold 250,000 shares of our common stock at a public offering price of $160.00 per share and received approximately $37.4 million in net proceeds. In March 2021, we issued $1.2 billion in aggregate principal amount of Notes as discussed above.
We sold 250,000 shares of our common stock at a public offering price of $160.00 per share and received approximately $37.4 million in net proceeds. In 2021, we issued a total of $1.15 billion in aggregate principal amount of Notes as discussed above. See Note 7 , Debt, to the Notes to Consolidated Financial Statements included elsewhere in this report.
In addition to the decline in gross profit, the increase in loss from operations was also driven by higher SG&A and restructuring expenses, partially offset by lower research and development expenses.
The decrease in loss from operations was primarily driven by the decline in gross profit, fully offset by lower SG&A expenses, research and development expenses and restructuring expenses.
Gross margin improvement may, however, continue to be negatively impacted by reduced capacity utilization if demand for our products does not meet our expectations, investments in our production infrastructure across the U.S., EU and China in advance of anticipated demand, investing in production personnel, partnerships and product pipeline, aggressive pricing strategies and increased discounting, increases in inventory reserves and potentially increased sales to the liquidation channel, changes in our product and customer mix, expansion into new geographies and markets where cost and pricing structures may differ from our existing markets, and underutilization fees and termination fees to exit certain supply chain arrangements, driving less leverage on fixed costs and delaying the speed at which cost savings initiatives impact our financial results.
Gross margin improvement may, however, continue to be negatively impacted by reduced capacity utilization if demand for our products continues to decline, investments in our production infrastructure across the U.S., EU and China in advance of anticipated demand, which may not materialize within the expected timeframe, investing in production personnel, partnerships and product pipeline, aggressive pricing strategies and increased discounting, increases in inventory provision, write-down or write-off of obsolete inventory and potentially increased sales to liquidation channels at lower prices, changes in our product and customer sales mix, expansion into new geographies and markets where cost and pricing structures may differ from our existing markets, and underutilization fees, termination fees and other costs to exit certain supply chain arrangements and product lines.
As a percentage of net revenues, cost of goods sold increased to 105.7% of net revenues in 2022 from 74.8% of net revenues in the prior year. The increase in cost of goods sold was primarily due to increased cost per pound and, to a lesser extent, increased pounds sold.
As a percentage of net revenues, cost of goods sold increased to 124.1% of net revenues in 2023 from 105.7% of net revenues in the prior year. The decrease in cost of goods sold was primarily due to lower volume of products sold and, to a lesser extent, increased cost per pound.
Subject to the recessionary and inflationary pressures, competition, general softness in the plant-based category and other factors impacting our business, we continue to expect that gross profit and gross margin improvements will be delivered primarily through: • implementation of lean value streams across our beef, pork and poultry platforms; • improved volume leverage and throughput; • reduced manufacturing conversion costs driven in part by optimization of our production network; • greater internalization and geographic localization of our manufacturing footprint; • finished goods, materials and packaging input cost reductions and scale of purchasing; • tolling fee efficiencies; • end-to-end production processes across a greater proportion of our manufacturing network; • scale-driven efficiencies in procurement and fixed cost absorption; • diversification of our core protein ingredients; • product and process innovations and reformulations; • cost-down initiatives through ingredient and process innovation; and • improved supply chain logistics and distribution costs.
Subject to the recessionary and inflationary pressures, competition, prolonged weakness in the plant-based meat category and other factors impacting our business, which are discussed above, we continue to expect that long-term gross profit and gross margin improvements will be delivered primarily through: • implementation of lean value streams across our beef, pork and poultry platforms; • reviewing and adjusting our pricing architecture within certain channels; • exiting select product lines in order to eliminate margin-dilutive products or to streamline our supply chain operations; • improved volume leverage and throughput; • reduced manufacturing conversion costs driven in part by network consolidation and optimization of our production network; • greater internalization and geographic localization of our manufacturing footprint; • finished goods, materials and packaging input cost reductions and scale of purchasing; • end-to-end production processes across a greater proportion of our manufacturing network; • scale-driven efficiencies in procurement and fixed cost absorption; • product and process innovations and reformulations; and • improved supply chain logistics and distribution costs.
These payments are initially recorded in “Prepaid lease costs, non-current” in the Company’s consolidated balance sheet and will ultimately be recorded as a component of a right-of-use asset upon lease commencement for each phase of the lease. During 2022, the tenant improvements associated with Phase 1-A were completed and the underlying asset was delivered to us.
These payments are initially recorded in “Prepaid lease costs, non-current” in the Company’s 77 consolidated balance sheet and will ultimately be recorded as a component of a right-of-use asset upon lease commencement for each phase of the lease.
We expect to continue to see additional seasonality effects, especially within our retail channel, with revenue contribution from this channel generally tending to be greater in the second and third quarters of the year, along with increased levels of purchasing by customers ahead of holidays, the impact of customer shelf reset activity and the timing of product restocking by our retail customers.
In general, any historical effects of seasonality have been more pronounced within our U.S. retail channel, with revenue contribution from this channel generally tending to be greater in the second and third quarters of the year, driven by increased levels of grilling activity, higher levels of purchasing by customers ahead of holidays, the impact of customer shelf reset activity and the timing of product restocking by our retail customers.
By shifting from animal-based meat to plant-based meat, we can positively impact four growing global issues: human health, climate change, constraints on natural resources and animal welfare.
By shifting from animal-based meat to plant-based meat, we can positively impact four growing global issues: human health, climate change, constraints on natural resources and animal welfare. We sell a range of plant-based meat products across our three core platforms of beef, pork and poultry.
Our financial performance also depends on our operational effectiveness and ability to fulfill orders in full and on time. Further, we may not be able to recapture missed opportunities in later periods, for example if the opportunity is related to a significant grilling holiday like Memorial Day weekend, the Fourth of July, or Labor Day weekend.
Further, we may not be able to recapture missed opportunities in later periods, for example if the opportunity is related to a significant grilling holiday like Memorial Day weekend, the Fourth of July, or Labor Day weekend. Missed opportunities may also result in missing subsequent additional opportunities.
Management believes these non-GAAP financial measures provide useful additional information to investors about current trends in our operations and are useful for period-over-period comparisons of operations. In addition, management uses these non-GAAP financial measures to assess operating performance and for business planning purposes.
Non-GAAP Financial Measures We use the non-GAAP financial measures set forth below in assessing our operating performance and in our financial communications. Management believes these non-GAAP financial measures provide useful additional information to investors about current trends in our operations and are useful for period-over-period comparisons of operations.
However, based on our current business plan, we believe that our existing cash balances along with our anticipated cash flow from operations will be sufficient to finance our operations and meet our foreseeable cash 68 requirements through at least the next twelve months. In the future, we may raise funds by issuing debt or equity securities.
Based on our current business plan, we believe that our existing cash balances, including our anticipated cash flow from operations, will be sufficient to finance our operations and meet our foreseeable cash requirements through at least the next twelve months.
Management also believes these measures are widely used by investors, securities analysts, rating agencies and other parties in evaluating companies in our industry as a measure of our operational performance. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures.
In addition, management uses these non-GAAP financial measures to assess operating performance and for business planning purposes. Management also believes these measures are widely used by investors, securities analysts, rating agencies and other parties in evaluating companies in our industry as a measure of our operational performance.
The majority of these charges were incurred in the fourth quarter of 2022, and the reduction-in-force was substantially completed by the end of 2022. Sources of Liquidity Our primary cash needs are for operating expenses, working capital and capital expenditures to support our business.
These charges were incurred in the fourth quarter of 2023, and the reduction-in-force was substantially complete by the end of 2023, but local law and consultation requirements may extend the process beyond the end of 2023 in certain countries. 75 Sources of Liquidity Our primary cash needs are for operating expenses, working capital and capital expenditures to support our business.
Research and Development Expenses Year Ended December 31, Change (in thousands) 2022 2021 Amount % Research and development expenses $ 62,264 $ 66,946 $ (4,682) (7.0) % Research and development expenses decreased $4.7 million, or 7.0%, in 2022, as compared to the prior year.
Research and Development Expenses Year Ended December 31, Change (in thousands) 2023 2022 Amount % Research and development expenses $ 39,530 $ 62,264 $ (22,734) (36.5) % Research and development expenses decreased $22.7 million, or 36.5%, in 2023, as compared to the prior year.
We recognized our share of the net losses in TPP in the amount of $18.9 million and $3.0 million for the year ended December 31, 2022 and 2021, respectively. For the years ended December 31, 2022 and 2021, we contributed our share of the investment in TPP of $13.3 million and $11.0 million, respectively.
For the years ended December 31, 2023 and 2022, we contributed our share of the investment in TPP of $3.3 million and $13.3 million, respectively. As of the year ended December 31, 2022, we had contributed our share of the investment in TPP in the amount of $24.3 million.
Segment Information We have one operating segment and one reportable segment, as our CODM, who is our Chief Executive Officer, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance.
Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements or any holdings in variable interest entities. Segment Information We have one operating segment and one reportable segment, as our Chief Operating Decision Maker, who is our Chief Executive Officer, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance.
Net loss for the year ended December 31, 2022, included $100.1 million in non-cash expenses primarily comprised of share-based compensation expense, depreciation and amortization expense, non-cash lease expense, unrealized loss on foreign currency transactions and amortization of debt issuance costs.
The net cash outflows were partially offset by a decrease in accounts receivable, prepaid expenses and other assets and a decrease in inventory. Net loss in 2022 included $100.1 million in non-cash expenses primarily comprised of share-based compensation expense, depreciation and amortization expense, non-cash lease expense, unrealized loss on foreign currency transactions and amortization of debt issuance costs.
Sales and other taxes the Company collects concurrent with the sale of products are excluded from revenue. The Company's normal payment terms vary by the type and location of its customers and the products offered. The time between invoicing and when payment is due is not significant.
Sales and other taxes we collect concurrent with the sale of products are excluded from revenue. Our normal payment terms vary by the type and location of our customers and the products offered. The time between invoicing and when payment is due is not significant. None of our customer contracts as of December 31, 2023 contains a significant financing component.
Cost of goods sold in 2022 included $22.6 million in write off of excess and obsolete inventories and $1.0 million in write down of inventory to lower of cost or net realizable value.
See Note 6 , Property, Plant and Equipment , to the Notes to Consolidated Financial Statements, included elsewhere in this report. Cost of goods sold in 2022 included $22.6 million in write-offs of excess and obsolete inventories and $1.0 million in write-down of inventory to lower of cost or net realizable value.
See Note 3, Restructuring , and Note 10 , Commitments and Contingencies , to the Notes to Consolidated Financial Statements, included elsewhere in this report. (2) Includes $4.9 million and $0.2 million in net foreign currency transaction losses in 2022 and 2021, respectively.
See Note 3 , Restructuring, to the Notes to Consolidated Financial Statements included elsewhere in this report. (2) Includes $1.1 million, $(4.9) million and $(0.2) million in net foreign currency transaction gains (losses) in 2023, 2022 and 2021, respectively. Also includes $1.0 million loss on extinguishment of debt associated with termination of the Company’s credit facility in 2021.
Net revenues decreased to $418.9 million in 2022 from $464.7 million in 2021, representing a 9.8% reduction. We have generated losses since inception.
Net revenues decreased to $343.4 million in 2023 from $418.9 million in 2022, representing an 18.0% reduction. We have generated losses since inception.
The decrease in net revenue per pound was mainly due to changes in sales mix, impact of unfavorable foreign exchange rates and increased trade discounts. By product, the decrease in sales was primarily due to decreases in sales of Beyond Burger, Beyond Beef Crumble and Beyond Beef, partially offset by increases in sales of chicken products, including Beyond Chicken Tenders.
The decrease in net revenue per pound was mainly due to higher trade discounts and changes in product sales mix, partially offset by the impact of favorable foreign currency exchange rates.
Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth; the successful implementation of the cost-reduction initiatives described elsewhere in this report; timing to adjust our supply chain and cost structure in response to material fluctuations in product demand; the number and characteristics of any additional products or manufacturing processes we develop or acquire to serve new or existing markets; our investment in and build out of our Campus Headquarters; the expenses associated with our marketing initiatives; any continued impacts of the COVID-19 pandemic; our investment in manufacturing and facilities to expand our manufacturing and production capacity; our investments in real property and joint ventures; the costs required to fund domestic and international operations and growth; the scope, progress, results and costs of researching and developing future products or improvements to existing products or manufacturing processes; any lawsuits related to our products or commenced against us or our directors and officers; the expenses needed to attract and retain skilled personnel; the costs associated with being a public company; the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing intellectual property claims, including litigation costs and the outcome of such litigation; and the timing, receipt and amount of sales of, or royalties on, any future approved products, if any.
Our cash requirements under our significant contractual obligations and commitments are listed below in the section titled “ Contractual Obligations and Commitment s.” Our future capital requirements may vary materially from those currently planned and will depend on many factors including, among others, demand in the plant-based meat category and for our products; our rate of revenue growth; the results of our review of our global operations and the successful implementation of our ongoing cost-reduction initiatives; timing to adjust our supply chain and cost structure in response to material fluctuations in product demand; the number and characteristics of any additional products or manufacturing processes we develop or acquire to serve new or existing markets; our investment in and build out of our Campus Headquarters, including the timing and success of subleasing excess space at our Campus Headquarters; the success of, and expenses associated with, our marketing initiatives; our investment in manufacturing and facilities to optimize our manufacturing and production capacity, including underutilization fees, termination fees and exit costs; our investments in real property and joint ventures; the costs required to fund domestic and international operations and growth; the scope, progress, results and costs of researching and developing future products or improvements to existing products or manufacturing processes; any lawsuits related to our products or commenced against us or our directors and officers; the expenses needed to attract and retain skilled personnel; variations in product selling prices and costs, the timing and success of changes to our pricing architecture within certain channels and the mix of products sold; the level of trade and promotional spending to support our products appropriately; the expenses associated with our sales force; our management of accounts receivable, inventory, accounts payable and other working capital accounts; the impact of foreign currency exchange fluctuations on our cash balances; the costs associated with being a public company; the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing intellectual property claims, including litigation costs and the outcome of such litigation; and the timing, receipt and amount of sales of, or royalties on, any future approved products, if any.
Gross Profit Gross profit consists of our net revenues less cost of goods sold.
Gross Profit and Gross Margin Gross profit consists of our net revenues less cost of goods sold. Gross margin is gross profit expressed as a percentage of our net revenues.
Provision for discounts and incentives are recorded in the same period in which the related revenues are recognized. At the end of each accounting period, the Company recognizes a contra asset to accounts receivable for estimated sales discounts that have been incurred but not paid.
At the end of each accounting period, we recognize a contra asset to accounts receivable for estimated sales discounts that have been incurred but not paid. The offsetting charge is recorded as a reduction of revenues in the same period when the expense is incurred.
Net revenues from international foodservice channel sales in the year ended December 31, 2022 decreased $9.4 million, or 14.8%, as compared to the prior year primarily due to a 21.5% decrease in net revenue per pound, partially offset by an 8.6% increase in pounds sold.
Net revenues from international foodservice channel sales in 2023 increased $21.8 million, or 40.3%, as compared to the prior year primarily due to a 59.6% increase in volume of products sold, partially offset by a 12.1% decrease in net revenue per pound.
The COVID-19 pandemic, inflation, rising interest rates, overall economic conditions and hostilities in Eastern Europe have led to increased disruption and volatility in capital markets and credit markets generally which could adversely affect our liquidity and capital resources in the future.
In addition, inflation, rising and higher interest rates, overall economic conditions, concerns about the likelihood of a recession and hostilities in Eastern Europe and the Middle East, among other factors, have led to increased disruption and volatility in capital markets and credit markets generally, which could adversely affect our ability to access capital resources in the future and potentially harm our liquidity outlook.
SG&A Expenses Year Ended December 31, Change (in thousands) 2022 2021 Amount % Selling, general and administrative expenses $ 239,505 $ 209,474 $ 30,031 14.3 % SG&A expenses increased by $30.0 million, or 14.3%, in 2022, as compared to the prior year.
SG&A Expenses Year Ended December 31, Change (in thousands) 2023 2022 Amount % Selling, general and administrative expenses $ 220,344 $ 239,505 $ (19,161) (8.0) % SG&A expenses decreased by $19.2 million, or 8.0%, in 2023, to $220.3 million or 64.2% of net revenues as compared to the prior year.
On October 11, 2022, our Board of Directors approved a plan to reduce our workforce by an additional approximately 200 employees, representing approximately an additional 19% of our total global workforce, based on cost-reduction initiatives intended to reduce operating expenses.
On November 1, 2023, our board of directors approved a plan to reduce our workforce by approximately 65 employees, representing approximately 19% of our global non-production workforce (or approximately 8% of our total global workforce). This decision was based on cost-reduction initiatives intended to reduce operating expenses.
In addition, these non-GAAP financial measures may not be computed in the same manner as similarly titled measures used by other companies. 65 “Adjusted EBITDA” is defined as net loss adjusted to exclude, when applicable, income tax (benefit) expense, interest expense, depreciation and amortization expense, restructuring expenses, share-based compensation expense, expenses attributable to COVID-19, and Other, net, including interest income, loss on extinguishment of debt and foreign currency transaction gains and losses.
“Adjusted EBITDA” is defined as net loss adjusted to exclude, when applicable, income tax expense, interest expense, depreciation and amortization expense, restructuring expenses, share-based compensation expense, and Other, net, including interest income, loss on extinguishment of debt and foreign currency transaction gains and losses.
Beyond Meat branded products were available at approximately 78,000 U.S. retail outlets and 43,000 U.S. foodservice outlets as of December 2022.
Beyond Meat branded products were available at approximately 32,000 U.S. retail outlets as of December 2023, excluding outlets unique to Beyond Meat Jerky.
By product, the decrease in U.S. retail channel net revenues was primarily due to reduced sales of Beyond Burger and Beyond Dinner Sausage, partially offset by sales to TPP of Beyond Meat Jerky introduced in the first quarter of 2022, which contributed $33.5 million in net revenues.
By product, the decrease in U.S. retail channel net revenues was primarily due to decreased sales of Beyond Meat Jerky to TPP, Beyond Burger, Beyond Sausage and Beyond Breakfast Sausage, partially offset by increased revenues from sales of Beyond Steak and Beyond Chicken products.
Gross Profit and Gross Margin Year Ended December 31, Change (in thousands) 2022 2021 Amount % Gross (loss) profit $ (23,743) $ 117,281 $ (141,024) (120.2) % Gross margin (5.7) % 25.2 % N/A N/A Gross profit in 2022 was a loss of $23.7 million, or 5.7% of net revenues, as compared to gross profit of $117.3 million, or 25.2% of net revenues, in the prior year, a decline of $141.0 million.
Gross (Loss) Profit and Gross Margin Year Ended December 31, Change (in thousands) 2023 2022 Amount % Gross (loss) profit $ (82,655) $ (23,743) $ (58,912) 248.1 % Gross margin (24.1) % (5.7) % N/A N/A Gross profit in 2023 was a loss of $82.7 million, as compared to a loss of $23.7 million, in the prior year, a decline of $58.9 million or 248.1%.
Gross margin in the year ended December 31, 2022 decreased to a negative gross margin of 5.7% from a positive gross margin of 25.2% in the prior year.
Gross margin in 2023 decreased to a negative gross margin of 24.1% from a negative gross margin of 5.7% in the prior year.
Despite a 0.4% increase in total pounds sold, gross profit and gross margin decreased primarily as a result of increased cost per pound of approximately $1.10 and decreased net revenue per pound of approximately $0.56 in the year ended December 31, 2022 compared to the prior year.
Gross profit and gross margin decreased primarily due to a 10.8% decrease in net revenue per pound, a 8.1% decrease in total volume of products sold, and a 4.8% increase in cost per pound in 2023 compared to the prior year.
We expect our operating expenses in 2023 to decrease from the levels in 2022, as we focus on reducing and optimizing operating expenses more broadly. We incurred one-time cash charges of approximately $4 million in connection with the October 2022 reduction in force, primarily consisting of notice period and severance payments, employee benefits and related costs.
In 2023, we incurred one-time cash charges of approximately $1.8 million in connection with the reduction-in-force, primarily consisting of notice period and severance payments, employee benefits and related costs.
Results of Operations The following table sets forth selected items in our statements of operations for the periods presented: Year Ended December 31, (in thousands) 2022 2021 2020 Net revenues $ 418,933 $ 464,700 $ 406,785 Cost of goods sold 442,676 347,419 284,510 Gross profit (23,743) 117,281 122,275 Research and development expenses 62,264 66,946 31,535 Selling, general and administrative expenses 239,505 209,474 133,655 Restructuring expenses 17,259 15,794 6,430 Total operating expenses 319,028 292,214 171,620 Loss from operations $ (342,771) $ (174,933) $ (49,345) 61 The following table presents selected items in our statements of operations as a percentage of net revenues for the periods presented: Year Ended December 31, 2022 2021 2020 Net revenues 100.0 % 100.0 % 100.0 % Cost of goods sold 105.7 74.8 69.9 Gross profit (5.7) 25.2 30.1 Research and development expenses 14.9 14.4 7.7 Selling, general and administrative expenses 57.2 45.1 32.9 Restructuring expenses 4.1 3.4 1.6 Total operating expenses 76.2 62.9 42.2 Loss from operations (81.9) % (37.7) % (12.1) % Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Net Revenues Year Ended December 31, Change (in thousands) 2022 2021 Amount % U.S.: Retail $ 234,744 $ 243,360 $ (8,616) (3.5) % Foodservice 69,289 76,475 (7,186) (9.4) % U.S. net revenues 304,033 319,835 (15,802) (4.9) % International: Retail $ 60,907 $ 81,483 $ (20,576) (25.3) % Foodservice 53,993 63,382 (9,389) (14.8) % International net revenues 114,900 144,865 (29,965) (20.7) % Net revenues $ 418,933 $ 464,700 $ (45,767) (9.8) % Net revenues in the year ended December 31, 2022 decreased by $45.8 million, or 9.8%, as compared to the prior year primarily due to a 10.2% decrease in net revenue per pound including the impact of unfavorable changes in foreign exchange rates, increased sales to liquidation channels and list price reductions in the U.S. and EU.
Results of Operations The following table sets forth selected items in our consolidated statements of operations for the respective periods presented: Year Ended December 31, (in thousands) 2023 2022 2021 Net revenues $ 343,376 $ 418,933 $ 464,700 Cost of goods sold 426,031 442,676 347,419 Gross (loss) profit (82,655) (23,743) 117,281 Research and development expenses 39,530 62,264 66,946 Selling, general and administrative expenses 220,344 239,505 209,474 Restructuring expenses (631) 17,259 15,794 Total operating expenses 259,243 319,028 292,214 Loss from operations $ (341,898) $ (342,771) $ (174,933) The following table presents selected items in our consolidated statements of operations as a percentage of net revenues for the respective periods presented: Year Ended December 31, 2023 2022 2021 Net revenues 100.0 % 100.0 % 100.0 % Cost of goods sold 124.1 105.7 74.8 Gross (loss) profit (24.1) (5.7) 25.2 Research and development expenses 11.5 14.9 14.4 Selling, general and administrative expenses 64.2 57.2 45.1 Restructuring expenses (0.2) 4.1 3.4 Total operating expenses 75.5 76.2 62.9 Loss from operations (99.6) % (81.9) % (37.7) % Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Net Revenues Year Ended December 31, Change (in thousands) 2023 2022 Amount % U.S.: Retail $ 155,240 $ 234,744 $ (79,504) (33.9) % Foodservice 50,647 69,289 (18,642) (26.9) % U.S. net revenues 205,887 304,033 (98,146) (32.3) % International: Retail $ 61,723 $ 60,907 $ 816 1.3 % Foodservice 75,766 53,993 21,773 40.3 % International net revenues 137,489 114,900 22,589 19.7 % Net revenues $ 343,376 $ 418,933 $ (75,557) (18.0) % Net revenues in 2023 decreased $75.6 million, or 18.0%, as compared to the prior year driven by a 10.8% decrease in net revenue per pound and an 8.1% decrease in volume of products sold.
We may not be able to fully realize the costs savings and benefits initially anticipated from these actions, and the expected costs may be greater than expected.
We may not be able to fully realize the cost savings and benefits initially anticipated from our cost-reduction initiatives and Global Operations Review, and the realized costs may be greater than expected. See Part I, Item 1A .
Under certain circumstances, our cost of goods sold may also include underutilization and/or termination fees associated with our co-manufacturing 59 agreements. Over time, we expect our cost of goods sold in absolute dollars to increase as a result of anticipated growth in our sales volume.
Under certain circumstances, our cost of goods sold may also include underutilization and/or termination fees associated with our co-manufacturing agreements.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

12 edited+0 added−1 removed8 unchanged
Biggest changeOn March 5, 2021, we issued $1.0 billion aggregate principal amount of Convertible Notes and on March 16, 2021, we issued $150.0 million aggregate principal amount of Additional Notes. The proceeds from the issuance of the Notes were approximately $1.0 billion, net of capped call transaction costs of $84.0 million and debt issuance costs totaling $23.6 million.
Biggest changeThe proceeds from the issuance of the Notes were approximately $1.0 billion, net of capped call transaction costs of $84.0 million and debt issuance costs totaling $23.6 million. See Note 7 , Debt , to the Notes to Consolidated Financial Statements included elsewhere in this report.
Resulting currency translation adjustments are included in “Accumulated other comprehensive income” and foreign currency transaction gains and losses are included in “Other, net.” Transaction gains and losses on long-term intra-entity transactions are recorded as a component of “Other comprehensive loss.” Transactions denominated in a 75 currency other than the reporting entity’s functional currency may give rise to transaction gains and losses that impact our results of operations.
Resulting currency translation adjustments are included in “Accumulated other comprehensive income” and foreign currency transaction gains and losses are included in “Other, net.” Transaction gains and losses on long-term intra-entity transactions are recorded as a component of “Other comprehensive loss.” Transactions denominated in a currency other than the reporting entity’s functional currency may give rise to transaction gains and losses that impact our results of operations.
We are working to diversify our sources of supply and intend to enter into long-term contracts to better ensure stability of prices of our raw materials. As of December 31, 2022, we had a multi-year sales agreement with Roquette which expires in December 2023.
We are working to diversify our sources of supply and intend to enter into long-term contracts to better ensure stability of prices of our raw materials. As of December 31, 2023, we had a multi-year sales agreement with Roquette which expires in December 2025.
Based on the intercompany balances as of December 31, 2022, an assumed 5% or 10% adverse change to foreign exchange rates would result in a loss of approximately $4.4 million or $8.8 million, respectively, recorded in “Other, net.” Inflation Risk Although we have seen inflation in certain raw materials, and in the cost of logistics and labor, we do not believe that inflation has had a material effect on the costs of our inputs to date.
Based on the intercompany balances as of December 31, 2023, an assumed 5% or 10% adverse change to foreign exchange rates would result in a loss of approximately $5.2 million or $10.4 million, respectively, recorded in “Other, net.” Inflation Risk Although we have seen inflation in certain raw materials, and in the cost of logistics and labor, we do not believe that inflation has had a material effect on the costs of our inputs to date.
The prices of pea protein and other ingredients we use are subject to many factors beyond our control, such as the number and size of farms that grow yellow peas, the vagaries of the farming businesses, including poor harvests due to adverse weather conditions, natural disasters and pestilence, and changes in national and world economic conditions, including as a result of COVID-19.
The prices of pea protein and other ingredients we use are subject to many factors beyond our control, such as the number and size of farms that grow yellow peas, the vagaries of the farming businesses, including poor harvests due to adverse weather conditions, natural disasters and pestilence, and changes in national and world economic conditions.
During the year ended December 31, 2022, a hypothetical 10% increase or 10% decrease in the weighted-average cost of pea protein, our primary ingredient, would have resulted in an increase of approximately $3.1 million, or a decrease of approximately $3.1 million, respectively, to cost of goods sold.
During the year ended December 31, 2023, a hypothetical 10% increase or 10% decrease in the weighted-average cost of pea protein, our primary ingredient, would have resulted in an increase of approximately $2.9 million, or a decrease of approximately $2.9 million, respectively, to cost of goods sold.
Our foreign exchange risk is primarily related to our intercompany balances denominated in various foreign currencies. We have exposure to the European Euro and the Chinese Yuan. Unrealized translation losses, net of tax, reported as cumulative translation adjustments through “Other comprehensive loss” were $4.2 million and $2.3 million for the years ended December 31, 2022 and 2021, respectively.
Our foreign exchange risk is primarily related to our intercompany balances denominated in various foreign currencies. We have exposure to the European Euro and the Chinese Yuan. 83 Foreign currency translation losses, net of tax, reported as cumulative translation adjustments through “Other comprehensive loss” were $0.4 million and $4.2 million in 2023 and 2022, respectively.
For additional information, see Risk Factors—Risks Related to Our Business—Inflationary price pressures of raw materials, labor, transportation, fuel or other inputs used by us and our suppliers, including the effects of rising interest rates, could negatively impact our business and results of operations . 76
Risk Factors—Risks Related to Our Business—Inflationary price pressures of raw materials, labor, transportation, fuel or other inputs used by us and our suppliers, including the effects of higher interest rates, has negatively impacted, and could continue to negatively impact our business and results of operations . 84
Our inability or failure to do so could harm our business, results of operations and financial condition.
Our inability or failure to do so could harm our business, results of operations and financial condition. For additional information, see Part 1, Item 1A .
Foreign currency transaction losses included in “Other, net” were $4.9 million and $0.2 million, respectively, in the years ended December 31, 2022 and 2021.
Net realized and unrealized foreign currency transaction gains (losses) included in “Other, net” were $1.1 million and $(4.9) million, respectively, in 2023 and 2022.
See Note 7 , Debt , to the Notes to Consolidated Financial Statements included elsewhere in this report. The Notes do not bear regular interest, and the principal amount of the Notes do not accrete.
The Notes do not bear regular interest, and the principal amount of the Notes do not accrete.
Our investment policy has as its primary objective investment activities which preserve principal without significantly increasing risk. On March 2, 2021, we terminated our revolving credit facility. In the year ended December 31, 2021, we incurred $0.3 million in interest expense related to our bank credit facilities.
Our investment policy has as its primary objective investment activities which preserve principal without significantly increasing risk. In March 2021, we issued a total of $1.15 billion aggregate principal amount of our 0% Convertible Senior Notes due 2027.
Removed
Upon termination of the revolving credit facility, unamortized debt issuance costs of $1.0 million associated with the revolving credit facility were written off as “Loss on extinguishment of debt,” which is included in “Other, net” in our consolidated statement of operations for the year ended December 31, 2021.

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