Q4 2023 Beyond Meat Inc Earnings Call
Speaker Change: [music].
Good afternoon, and welcome to the beyond meat 20, twenty-three fourth quarter conference call.
Operator: Good afternoon, and welcome to the Beyond Meat 2023 fourth quarter conference call. All participants will be in listen-only mode.
Speaker Change: All participants will be in listen only mode.
Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad.
Speaker Change: Should you need assistance. Please signal a conference specialist by pressing the Starkey followed by zero.
Speaker Change: After today's presentation there'll be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad.
Operator: To withdraw your question, please press star then 2. Please note, this event is being recorded. I would now like to turn the conference over to Paul Shepard, Vice President, FP&A, and Investor Relations. Please go ahead. Thank you. Good afternoon.
Speaker Change: To withdraw your question. Please press Star then two.
Speaker Change: Please note this event is being recorded.
Speaker Change: I would now like to turn the conference over to Paul Shepherd, Vice President S. P N E and Investor Relations. Please go ahead.
Paul Shepherd: Thank you good afternoon and welcome joining me on today's call are Ethan Brown, founder, President and Chief Executive Officer, and Lupica, Shaw, Chief Financial Officer and Treasurer.
Paul Shepard: Joining me on today's call are Ethan Brown, Founder, President, and Chief Executive Officer, and Lubbe Kutur, Chief Financial Officer and Treasurer. By now, everyone should have access to the company's fourth quarter and full year 2023 earnings press release filed today after market close. This document is available in the investor relations section of Beyond Meat's website at www.beyondmeat.com. Before we begin, please note that all the information presented on today's call is unaudited and that during the course of this call, management may make forward-looking statements within the meaning of the federal securities laws. These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements.
Paul Shepherd: By now everyone should have access to the company's fourth quarter and full year 2023 earnings press release filed today after market close.
Paul Shepherd: <unk> is available in the Investor Relations section of beyond meat website at www dot beyond meat Dot com.
Paul Shepherd: Before we begin please note that all the information presented on today's call is an audited in the during the course of this call management may make forward looking statements within the meaning of the federal Securities laws.
Paul Shepherd: These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward looking statements.
Operator: Forward-looking statements in today's earnings release, along with the comments on this call, are made only as of today and will not be updated as actual events unfold. We refer you to today's press release, the company's quarterly report on Form 10-Q for the quarter ended September 30th, 2023, and to the company's annual report on Form 10-K for the fiscal year ended December 31st, 2023, to be filed with the SEC, along with other filings with the SEC, for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward- Please also note that on today's call, management may reference adjusted EBITDA, which is a non-GAAP financial measure. While we believe this non-GAAP financial measure provides useful information for investors, any reference to this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Please refer to today's press release for a reconciliation of adjusted EBITDA to its most comparable gap measure. And with that, I would now like to turn the call over to Ethan Brown. Thank you, Paul, and good afternoon, everyone.
Paul Shepherd: Forward looking statements in today's earnings release, along with the comments on this call are made only as of today and will not be updated as actual events unfold.
Paul Shepherd: We refer you to today's press release company's quarterly reports on Form 10-Q for the quarter ended September 30th 2023, and so the company's annual report on Form 10-K for the fiscal year ended December 31st 2023 to be filed with the SEC along with other filings with the SEC.
Paul Shepherd: For a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward looking statements made today.
Paul Shepherd: Please also note that on todays call management May reference adjusted EBITDA, which is a non-GAAP financial measure.
Paul Shepherd: While we believe this non-GAAP financial measure provides useful information for investors any reference to this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP.
Paul Shepherd: Please refer to today's press release for a reconciliation of adjusted EBITDA to its most comparable GAAP measure.
And with that I would now like to turn the call over to Ethan Brown.
Ethan Walden Brown: Thank you Paul and good afternoon, everyone.
Ethan Walden Brown: I will begin my comments by briefly reviewing the five priorities we anchored our activities around in Q4 2023 and then turn to our five forward priorities for 2024. In both instances, these steps are intended to serve and accelerate our progress towards sustainable operations and a return to growth. In Q4 2023, we executed across the following One, we sought to accelerate our transition to a leaner operating structure. As part of these efforts, we established a minimum of $70 million in cuts from our operating budget for 2024.
Ethan Walden Brown: I will begin my comments by briefly reviewing the five priorities. We're anchored our activities around Q4, 2023, and then turn to our five Ford priorities for 2024 in both instances. These steps are intended to serve and accelerate our progress towards sustainable operations and returned to growth in.
Ethan Walden Brown: Q4, 2023, we executed across the following actions one we saw to accelerate our transition to a leaner operating structure.
Ethan Walden Brown: As part of these efforts, we established a minimum of $70 million in cuts from our operating budget for 2024, we recorded.
Ethan Walden Brown: We recorded approximately $95.6 in non-cast charges, primarily relating to inventory and assets now deemed to be in excess or no longer consistent with our path to profitability, and continued to consolidate our production footprint. Two, in U.S. retail, we put the finishing touches on a multi-year renovation of certain core platforms, including Beyond Burger and Beyond Beef. We believe this renovation further positions the brands to overcome misinformation regarding the nutritional and health profile of our products, while providing strong support for certain pricing actions. Third, we conducted extensive pricing analysis, and as discussed momentarily, are now preparing to implement pricing changes to support gross margin expansion. Additionally, throughout the quarter, we continue to use inventory management to free up working capital. In addition, we maintained our investment focus in Europe and served our strategic customers in this important market for plant-based meats, including continued traction in McDonald's across countries such as Austria, Germany, Ireland, the Netherlands, the UK, Malta, Portugal, Slovenia, and Switzerland. Turning to 2024, a pivotal year for Beyond Meat, we are pursuing the following five priorities, several of which simply represent a transition from 2023 planning to 2024 implementation 1.
Ethan Walden Brown: Approximately 95, six and noncash charges, primarily relating to inventory and assets now deemed to be in excess are no longer consistent with our path to profitability.
Ethan Walden Brown: <unk> consolidated our production footprint.
Ethan Walden Brown: Two in U S retail, we put the finishing touches on a multi year renovation of certain core platforms, including beyond Burger and beyond beef.
Ethan Walden Brown: We believe this renovation further positions the brands to overcome misinformation regarding nutritional and health profile of our products, while providing strong support for certain pricing actions.
Ethan Walden Brown: Three we conducted extensive pricing analysis and as discussed momentarily are now preparing to implement pricing changes to support gross margin expansion.
Ethan Walden Brown: Or throughout the quarter, we continued to use inventory management to free up working capital.
Ethan Walden Brown: Five we maintained our investment focus in Europe and served our strategic customers in this important market for plant based meats, including continued traction Mcdonald's across countries, such as Austria, Germany, Ireland, the Netherlands U K Malta.
Ethan Walden Brown: The goal Slovenia and Switzerland.
Ethan Walden Brown: Turning to 2020 for a pivotal year for beyond meat, we are pursuing the following five priorities several of which simply represent a transition from 'twenty to 'twenty three planning to 2020 for implementation.
Ethan Walden Brown: One we are beginning 2024 by executing within a leaner operation consistent with substantially reduced 2024 planned opex and cashews.
Ethan Walden Brown: We are beginning 2024 by executing within a leaner operation, consistent with substantially reduced 2024 planned OPEX and cash use. Part and parcel with this leaner operation is our ongoing tightening of focus relating to portfolio, markets, and consumers. We are, as just one example, discontinuing our Beyond Meat jerky product line, despite its number one position in the plant-based jerky category.
Ethan Walden Brown: Part and parcel with this leaner operation.
Ethan Walden Brown: Our ongoing tightening of focus relating to portfolio markets and consumer.
Ethan Walden Brown: We are as just one example, discontinuing or beyond meat jerky product line.
Ethan Walden Brown: Right its number one position in the plant based jerky category.
Ethan Walden Brown: These refinements of our focus and resources to be put against our latest product platform renovation beyond four.
Ethan Walden Brown: These refinements allow focus and resources to be put against our latest product platform renovation, BEYOND4, and other SKUs which we believe have higher profitable growth potential here in the US and are consistent with my intention to focus more resources on key markets and customers in Europe. Two, we will be rolling out Beyond 4 in U.S. retail and view this renovation as an important and potentially transformative moment for our brand and category. Iron sharpens iron, and we've certainly experienced this ancient metaphor firsthand.
Ethan Walden Brown: Other skus, which you believe have higher profitable growth potential here in the U S.
Ethan Walden Brown: And are consistent with my intention to focus more resources against key markets and customers in Europe.
Ethan Walden Brown: Two we will be rolling out beyond four in U S retail and view. This renovation is an important and potentially transformative moment for our brand and category.
Ethan Walden Brown: Iron Sharpens iron and we certainly experienced this ancient metaphor firsthand specifically the current climate of misinformation and efforts by incumbents, including sadly pharmaceutical interests to poison the plant based meat, well push us to accelerate gains and the health profile of our product platforms to be clear.
Ethan Walden Brown: Specifically, the current climate of misinformation and efforts by incumbents, including, sadly, pharmaceutical interests, to poison the plant-based meat well pushes us to accelerate gains in the health profile of our product platform. To be clear, as I have often repeated, likely to the point of boredom of listeners, we are proud of the health benefits available through our current products, including, for example, those documented in the swap meat study published in the American Journal of Clinical Nutrition, where participants experienced a meaningful drop in LDL, or bad cholesterol, as well as a decline in TMAO, a compound in the gut associated with heart disease, after switching from animal-based meats And we are proud of the certifications associated with our existing product lines, such as the American Heart Association's Heart Check Program certification for our Beyond Steak and Beyond Beef Crumbles. However, as we have also often repeated, we are chasing a perfect build of meat from plants, and this goal encompasses sensory as well as nutritional characteristics.
Ethan Walden Brown: As I have often repeated likelihood appointed boredom of listeners. We are proud of the health benefits available through our current products, including for example, those documented in the swap meet study published in the American Journal of clinical nutrition, where participants experienced a meaningful drop in LDL or bad cholesterol as well as a decline.
Ethan Walden Brown: <unk> compound in the gut associated with heart disease after switching from animal based meats to beyond meat across eight week intervals.
Ethan Walden Brown: And we are proud of the certifications associated with our existing product lines, such as the American Heart Association Heart check program certification of our beyond stake in beyond beef crumbles.
Ethan Walden Brown: However, as we have also asked repeated we're chasing perfect buildup meat from plants and this goal encompasses century as well as nutritional characteristics.
Ethan Walden Brown: On the latter, our job is to deliver as much of the nutritional benefits of plant-based eating as we can in the familiar and satiating form and taste of meat. Over the years, we've surrounded ourselves with a broad ecosystem of doctors, registered dieticians, and leading health institutions to guide us in this effort. The combination of this extensive input and the talent and expertise of our research and development team is what led to what I believe is a significant breakthrough in the BEYOND4 platform. If you come to our facilities in Los Angeles, you will see that one of the analytical areas that we emphasize is the structure, interplay, and distribution of plant-based proteins and fats. In Beyond 4, the team was able to blend high-quality proteins from fava beans, red lentils, peas, and brown rice together with fats from avocado oil in a way to deliver superior nutrition and sensory outcomes.
Ethan Walden Brown: On the ladder, our job is to deliver as much of the nutritional benefits of plant based eating as we can and the familiar and satiating form and taste of meat.
Ethan Walden Brown: Over the years, we surround ourselves with a broad ecosystem of doctors registered dieticians and leading health institutions to guide us in this effort.
Ethan Walden Brown: Combination of this extensive input and the talent and expertise of our research and development team is what led to what I believe is a significant breakthrough in the beyond four platform.
Ethan Walden Brown: If you come to our facilities in Los Angeles, you will see that one of the analytical areas that we emphasize is the structure interplay and distribution.
Ethan Walden Brown: Plant based proteins and fats.
Ethan Walden Brown: And beyond for the team was able to blend high quality proteins from followed these red lentils, Ts and Brown rice together with SaaS from avocado oil and a way to deliver superior nutrition and century outcomes.
Ethan Walden Brown: The nutritionals are clear and compelling, including high levels of plant-based protein, 21 grams specifically, with just 2 grams of saturated fat, which is 75% less saturated fat than a typical 80-20 animal beef patty. Avocado oil has been identified as potentially beneficial across a range of health outcomes, including reducing the risk of various chronic diseases, among them heart disease, as well as potentially helpful with eye and skin health, reflecting its composition of monounsaturated fats, antioxidants, and other plant compounds.
Ethan Walden Brown: Nutritionals are clear and compelling including high levels of plant based protein 21 grams, specifically with the just two grams of saturated fat, which is 75% less saturated fat than a typical 80 20 animal beef Patty.
Ethan Walden Brown: Avocado oil has been identified as potentially beneficial across a range of health outcomes, including reducing the risk of various chronic diseases among them heart disease as well as potentially helpful with eye and skin health, reflecting its composition of mono unsaturated fats antioxidants and other plant compounds.
Speaker Change: Our critics will undoubtedly continue to agitate.
Ethan Walden Brown: The critics will undoubtedly continue to agitate. My favorite target is sodium levels, and the sleight of hand employed is to compare the Beyond Burger, which is seasoned, to an unseasoned ground beef burger. Keeping in mind that the current Beyond Burger contains 17% of the daily recommended value of sodium, which, when appropriately compared to seasoned beef burgers, often means less, not more, sodium. Nevertheless, BEYOND4 achieves a 20% reduction in the amount of sodium, with the sodium content now registering at 14% of the daily value. Quick math reveals that even if you were to have seven of the Beyond Four burgers in a single day, this consumption alone would not exceed the daily recommended value of sodium.
Speaker Change: A favorite target of sodium levels and the sleight of hand employed is to compare the beyond Burger, which is seasoned to an unseasoned this ground beef burger.
Speaker Change: Keeping in mind that the current beyond Burger contained 17% of the daily recommended value of sodium.
Speaker Change: Which when appropriately compared to season beef burgers, often means less not more sodium.
Speaker Change: Nevertheless, beyond four achieved a 20% reduction in the amount of sodium with the sodium content now registering at 14% of daily values.
Speaker Change: Quick math reveals that even if you were to have seven of the beyond four burgers in a single day. This consumption alone would not exceed the daily recommended value of sodium.
Ethan Walden Brown: And here's the thing, we're not done. As a critic, physician, talk, post, and lobby, we will keep chasing our own true north, that perfect build of meat from plants, and you can expect even lower sodium levels in subsequent generations. These and other advances in BEYOND4 have earned recognition from important members of the health and nutrition community. This includes the American Association's Heart Check Program certification of a series of heart-healthy recipes featuring BEYOND4 beef and burger. The placement of the American Diabetes Association seal on our Beyond 4 beef and burger package, as both products meet the nutritional guidelines of the American Diabetes Association's Better Choices for Life program and the Clean Label Project Certification of the BEYOND4 Beef and Burger. Moreover, in a survey of registered dietitians at a recent conference, 94% of these dietitians answered that they enjoyed the taste of the new Beyond Burger, viewed it as healthful, and While broader consumer testing scored favorably across taste, juiciness, and texture relative to our existing burger, 3.
Speaker Change: Here's the thing we're not done.
Speaker Change: That's a critical position talk post and lobby, we will keep chasing our own true north that perfect build a meat from plants and you can expect even lower sodium levels in subsequent generations.
Speaker Change: These and other advances and beyond four have earned recognition from important members of the health and nutrition community.
Speaker Change: This includes the American Association of Heart check program certification of the series of heart healthy recipes featuring to be on for beef and Burger.
Speaker Change: The placement of the American Diabetes Association seal on our beyond for beef Burger packaging.
Speaker Change: Both products meet the nutritional guidelines of the American diabetes Association's better choices for life program.
Speaker Change: And the clean label projects certification of the beyond for beef and Burger.
Speaker Change: Moreover, in our survey of registered Dietitians at a recent conference 94% of these dietitians answered that they enjoyed the taste the new beyond Burger beauty is helpful in order to recommend it well.
Speaker Change: While broader consumer testing scored favorably across the taste and.
Speaker Change: Texture relative to our existing Burger.
Speaker Change: Three we're implementing changes to our U S trade and pricing programs effective in early Q2.
Ethan Walden Brown: We are implementing changes to our U.S. trade and pricing programs, effective in early Q2. Though varied across channels and product lines, we expect the overall impact of these pricing changes to meaningfully impact margin across the balance of the year. This change in strategy does not reflect an abandonment of our long sought price parity goal, which we have, in fact, achieved in certain very specific offers. Rather, the change reflects three main factors. One, we clearly need to restore our margins, and this, coupled with the network consolidation I discussed momentarily, is expected to aid greatly toward this end. Two, the broad pricing programs we put in place over the last 18 months simply didn't accomplish the goal of crossing from early adopters into the mainstream. In retrospect, the noise and swirls surrounding the category reached decibel levels that were perhaps sufficient to drown out pricing and other messages.
Speaker Change: No varied across channels and product lines, we expect the overall impact of these pricing changes to meaningfully impact margin across the balance of the year.
Speaker Change: This change in strategy does not reflect an abandonment of our long Sault price parity goal.
Speaker Change: We in fact achieved in certain very specific offerings.
Speaker Change: Rather the change reflects three main factors.
Speaker Change: One, we clearly need to restore margins and this coupled with the network consolidation I'll discuss momentarily are expected to aid greatly towards this end.
Speaker Change: Two the broad pricing programs, we put in place over the last 18 months simply didn't accomplish the goal of crossing from early adopters into the mainstream.
Speaker Change: In retrospect, the noise and swirl surrounding the category reached decibels that were perhaps sufficient to ground out pricing other messages.
Ethan Walden Brown: Three, given the aforementioned margin objectives, as well as the inclusion of certain premium ingredients in the beyond four platform, our pricing architecture is putting far more deliberate emphasis on tiered pricing across our product line. Finally, as referenced above, we are nearing the completion of what has been a very difficult but highly worthwhile consolidation or production network. Though we undertook these changes for myriad reasons depending on the site and partner, we expect this rightsizing to substantially contribute to margin. To give a sense of the magnitude of this restructuring effort, it helps to consider that in the last two years, we've contracted our production network from as many as 13 co-factors in North America to just one today. This consolidation, coupled with an emphasis on internal production, has obvious benefits relating to overhead absorption, as well as logistics and quality control.
Speaker Change: Three given the aforementioned margin objectives as well as the inclusion of certain premium ingredients and the beyond four platform. Our pricing architecture is putting far more deliberate emphasis on tiered pricing across our product lines.
Speaker Change: Poor as referenced above we are nearing the completion of what its been a very difficult, but highly worthwhile consolidation or production network.
Speaker Change: We undertook these changes for myriad reasons, depending on the site and partner, we expect this right sizing to substantially contribute to margin.
Speaker Change: To give a sense of the magnitude of this restructuring effort. It helps to consider that in the last two years, we've contracted our production network from as many as 13 co Packers in North America to just one today.
Speaker Change: This consolidation coupled with an emphasis on internal production, it's obvious benefits relating to overhead absorption as well as logistics and quality control.
Speaker Change: Five we are continuing to invest in our European business and related strategic customers.
Speaker Change: In a recent trip to the U K I was struck by what I'm personally certain is the future of plant based meat that is a growing ubiquity.
Ethan Walden Brown: We are continuing to invest in our European business and related strategic customers. On a recent trip to the UK, I was struck by what I'm personally certain is the future of plant-based meat, which is a growing ubiquity. I was able to, within a radius of no more than three blocks, enjoy delicious Beyond Meat offerings at McDonald's UK, Pizza Hut UK, and Starbucks UK. More generally, I routinely enjoy watching with much interest the reaction of visitors at our headquarters in Los Angeles when they taste the McPlant nugget, which is now available in Germany. Almost universally, it is viewed as indistinguishable from its animal protein equivalent.
Speaker Change: Was able to within a radius of no more than three blocks enjoy delicious beyond meat offerings at Mcdonald's U K Pizza Hut U K and Starbucks U K.
Speaker Change: More generally.
We're keenly enjoy watching with much interest the reaction of visitors at our headquarters in Los Angeles, when they taste, the Mcclintock Nugget, which is now available in Germany.
Speaker Change: Almost universally it is viewed as indistinguishable from its animal protein equivalent.
Speaker Change: Similar to the delicious aforementioned products at Pizza Hut U K and Starbucks U K.
Speaker Change: This outcome reflects years of development and investment that helps separate beyond meat.
Speaker Change: Before moving on from Europe, I should note that across 2024, we look forward to a more fulsome entry into the German retail market given our recent satisfaction of local shelf life requirements.
Ethan Walden Brown: Similar to the delicious aforementioned products at Pizza UK and Starbucks UK, this outcome reflects years of development and investment that helped Beyond Meat stand out. Before moving on from Europe, I should note that in 2024, we look forward to a more fulsome entry into the German retail market, given our recent satisfaction of local shelf life requirements. In closing my comments, I want to properly frame the state of our business. Over the last 12 to 18 months, we spent considerable time, energy, and resources reorienting Beyond Meat's trajectory amidst changing and challenging conditions with an eye towards sustainable operations and a return to growth. To reiterate, these major steps include a potential leap forward in the value proposition of our core product line, the contraction of our production network to achieve quality and margin gains, and the Implementation of Pricing Changes, also in support of Margin Expansion
Speaker Change: In closing my comments I want to properly frame the state of our business.
Speaker Change: Over the last 12 to 18 months, we spent considerable time energy and resources reorienting beyond meat trajectory amidst changing and challenging conditions with an eye towards sustainable operations and a return to growth.
Speaker Change: To reiterate these major steps include a potential leap forward and the value proposition of our core product lines.
Speaker Change: A steep reduction in our operating costs and cashews as we continued to implement lean management principles.
Speaker Change: The contraction of our production network to achieve quality and margin gains.
Speaker Change: The implementation of pricing changes also in support of margin expansion.
Speaker Change: As we look forward, we expect the early results from this extensive spadework together with specific actions, we plan to pursue to bolster our balance sheet to make 'twenty 'twenty four and importantly, promising year for the beyond meat story.
Ethan Walden Brown: As we look forward, we expect the early results from this extensive spadework, together with civic actions we plan to pursue to bolster our balance, to make 2024 an important, promising year for the Beyond Meat story. With that, I'll turn it over to Lubbe, our Chief Financial Officer and Treasurer, to walk us through our fourth quarter and full year 2023 financial results in greater detail, as well as provide our outlook for 2024. Thank you, Ethan, and good afternoon, everyone.
Speaker Change: With that I'll turn it over Levine, our chief financial Officer, and Treasurer to walk us through our fourth quarter and full year of 2023 financial results in greater detail as well as provide our outlook for 2024.
Levine: Thank you Ethan and good afternoon, everyone.
Levine: Before diving into the components of our fourth quarter P&L, Let me provide some color more broadly on the significant noncash charges you will have seen in our press release today.
Levine: You'll recall, we announced in November 2023 that we were initiating a review of our global operations spanning five areas first the potential exit of select product lines second changes to our pricing architecture within certain channels.
Lubbe Kutur: Before diving into the components of our fourth quarter P&L, let me provide some color more broadly on the significant non-cash charges you will have seen in our press release today. You'll recall we announced in November 2023 that we were initiating a review of our global operations spanning five areas. First, the potential exit of select product lines.
Levine: Third accelerated cash accretive inventory reduction initiatives.
Levine: Fourth further optimization of our manufacturing capacity in our real estate footprint, and lastly, fifth a review and potential restructuring of our operations in China.
Levine: We recorded $67 5 million in noncash charges and cost of goods sold this quarter in connection with our global operations review.
Lubbe Kutur: Second, changes to our pricing architecture within certain channels. Third, accelerated cash accretive inventory reduction initiatives. Fourth, further optimization of our manufacturing capacity and real estate footprint. And lastly, fifth, a review and potential restructuring of our operations in China. We recorded $67.5 million in non-cash charges in cost of goods sold this quarter in connection with our global operations review.
These charges consisted of a few different items, including the provision for certain inventory now deemed to be excess or obsolete given changes to our strategic priorities as well as more limited internal resources. Following our November 2023 reduction enforced.
Levine: We also recorded a significant charge representing accelerated depreciation expense on certain fixed assets determined to be non core to our strategic priorities within the foreseeable horizon, but for which no recovery or sale value could be reasonably expected.
Lubbe Kutur: These charges consisted of a few different items, including the provision for certain inventory now deemed to be excess or obsolete, given changes to our strategic priorities, as well as more limited internal resources following our November 2023 reduction in force. We also recorded a significant charge representing accelerated depreciation expense on certain fixed assets determined to be non-core to our strategic priorities within the foreseeable horizon but for which no recovery or sale value could be reasonably expected. Also, in connection with the Global Operations Review, we recorded a non-cash write-off for cost of goods sold associated with a prepaid option to purchase certain raw material ingredients, which we no longer expect to exercise. Within operating expenses, we recorded a non-cash charge of $17.6 million, reflecting the write-down to estimated fair value of certain production and R&D fixed assets, which we now intend to sell.
Levine: Also in connection with our global operations review, we recorded a noncash write off to cost of goods sold associated with a prepaid option to purchase certain raw material ingredients, which we no longer expect to exercise.
Levine: Within operating expenses, we recorded a noncash charge of $17 $6 million, reflecting the write down to estimated fair value of certain production and R&D fixed assets, which we now intend to sell.
Levine: Note $16 $3 million of the noncash items recorded in cost of goods sold and $3 6 million of noncash items recorded in operating expenses related to beyond meat jerky, which we have made the decision as part of our global operations review to discontinue.
Speaker Change: Let me now briefly review, our fourth quarter financial results before turning to our 2020 for outlook.
Speaker Change: Net revenues decreased seven 8% to $73 $7 million in the fourth quarter of 2023 compared to $79 9 million in the year ago period.
Lubbe Kutur: Of note, $16.3 million of the non-cash items recorded in cost of goods sold and $3.6 million of the non-cash items recorded in operating expenses related to Beyond Meat jerky, which we have made the decision, as part of our global operations review, to discontinue. Let me now briefly review our fourth-quarter financial results before turning to our 2024 outlook. Net revenues decreased 7.8% to $73.7 million in the fourth quarter of 2023, compared to $79.9 million in the year-ago period. The decrease in net revenues was driven by a 14.6% decrease in net revenue per pound, partially offset by an 8% increase in volume of products sold.
The decrease in net revenues was driven by a 14, 6% decrease in net revenue per pound, partially offset by an 8% increase in volume of products sold.
Speaker Change: The decrease in net revenue per pound was mainly driven by changes in product sales mix and increased trade discounts, partially offset by favorable impact from foreign exchange rates. The increase in volumes sold was primarily driven by sales in our international business, where we continue to see solid growth across our retail and foodservice.
Speaker Change: <unk> channels. However, this was partially offset by softness in our U S business, where volumes declined in both our retail and foodservice channels due mainly to continued category weakness and the lapping of certain business in our foodservice channel that did not repeat in Q4 23.
Lubbe Kutur: The decrease in net revenue per pound was mainly driven by changes in product sales mix and increased trade discounts, partially offset by a favorable impact from foreign exchange rates. The increase in volume sold was primarily driven by sales in our international business, where we continue to see solid growth across our retail and food service channels. However, this was partially offset by softness in our US business, where volumes declined in both our retail and food service channels, due mainly to continued category weakness and the lapping of certain business in our food service channel that did not repeat in Q4 23. Turning to gross profit and gross margin, gross profit in the fourth quarter of 2023 was a loss of $83.9 million compared to a loss of $2.9 million in the year-ago period, which included the negative impact of non-cash charges totaling $78 million taken in the fourth quarter of 2023.
Speaker Change: Turning to gross profit and gross margin.
Speaker Change: <unk> profit in the fourth quarter of 2023 was a loss of $83 $9 million compared to a loss of $2 $9 million in the year ago period, which included the negative impact of noncash charges totaling $78 million taken in the fourth quarter of 2023.
Speaker Change: The aforementioned amount 67, 5 million was associated with strategic decisions arising from our global operations review and $10 $5 million was due to other special items driven mainly by additional reserves for inventory associated with a large <unk> customer and the write off of a prepaid fee.
Speaker Change: <unk> from the termination of a co manufacturing agreement in Q4 of 2023.
Speaker Change: Excluding the aforementioned charges gross profit and gross margin were also impacted by lower net revenue per pound, partially offset by reduced logistics cost per pound compared to the year ago period.
Lubbe Kutur: Of the aforementioned amount, $67.5 million was associated with strategic decisions arising from our Global Operations Review, and $10.5 million was due to other special items driven mainly by additional reserves for inventory associated with a large QSR customer and the write-off of a prepaid fee resulting from the termination of a co-manufacturing agreement in Q4 2023. Including the aforementioned charges, gross profit and gross margin were also impacted by lower net revenue per pound, partially offset by reduced logistics costs per pound compared to the year-ago period. Operating expenses were $76.9 million in the fourth quarter of 2023, compared to $62.8 million in the year-ago period. The increase in operating expenses included non-cash charges totaling $17.6 million associated with our global operations review, which I described a moment ago.
Speaker Change: Operating expenses were $76 9 million in the fourth quarter of 2023 compared to $62 8 million in the year ago period.
Speaker Change: The increase in operating expenses included noncash charges totaling $17 $6 million associated with our global operations review, which I described a moment ago.
Speaker Change: Excluding these charges operating expenses also reflected reduced non production head count expenses lower restructuring expenses reduce scale up expense and lower selling expenses, partially offset by higher consulting fees compared to the year ago period.
Speaker Change: Moving down the P&L total other income net of $5 $7 million was lower by approximately $1 2 million compared to the year ago period, reflecting decreased realized and unrealized foreign currency gains.
Speaker Change: Losses related to the company's joint venture with Pepsico, the planet partnership decreased by approximately $8 million year over year, reflecting the reduced scale of our jerky business versus the year ago period.
Lubbe Kutur: Including these charges, operating expenses also reflected reduced non-production headcount expenses, lower restructuring expenses, reduced scale-up expenses, and lower selling expenses, partially offset by higher consulting fees compared to the year-ago period. Moving down the P&L, total other income net of $5.7 million was lowered by approximately $1.2 million compared to the year-ago period, reflecting decreased realized and unrealized foreign currency gains.
Speaker Change: Overall net loss in the fourth quarter of 2023 was $155 1 million or $2 40 per common share compared to net loss of $66 9 million or $1 <unk> per common share in the year ago period.
Speaker Change: Net loss in the fourth quarter of 2023 included noncash charges totaling $95 6 million as previously described.
Speaker Change: Adjusted EBITDA was a loss of $125 1 million in the fourth quarter of 2023 compared to an adjusted EBITDA loss of $56 5 million in the year ago period.
Lubbe Kutur: Losses related to the company's joint venture with PepsiCo, the planet partnership, decreased by approximately $8 million year-over-year, reflecting the reduced scale of our jerky business versus the year-ago period. Overall, the net loss in the fourth quarter of 2023 was $155.1 million, or $2.40 per common share, compared to a net loss of $66.9 million, or $1.05 per common share, in the The net loss in the fourth quarter of 2023 included non-cash charges totaling $95.6 million, as previously described.
Speaker Change: Turning now to our balance sheet, the company's cash and cash equivalents balance, including restricted cash was $205 9 million and total outstanding debt was $1 1 billion as of December 31, 2023.
Speaker Change: Net cash used in operating activities was $107 8 million in the year ended December 31, 2023, compared to $320 2 million in the year ago period.
Speaker Change: Capital expenditures totaled $10 6 million in the year ended December 31, 2023, compared to $70 5 million in the year ago period.
Lubbe Kutur: Adjusted EBITDA was a loss of $125.1 million in the fourth quarter of 2023, compared to an adjusted EBITDA loss of $56.5 million in the year-ago period. Turning now to our balance sheet, the company's cash and cash equivalents balance, including restricted cash, was $205.9 million, and total outstanding debt was $1.1 billion as of December 31st, 2023. Net cash used in operating activities was $107.8 million in the year ended December 31, 2023, compared to $320.2 million in the year-ago period.
Speaker Change: Let me now turn to our full year 2024 outlook we.
Speaker Change: We expect net revenues to be in the range of $345 million and net revenues for the first quarter of 2024, I expect it to be in the range of approximately $70 million to $75 million.
Speaker Change: Gross margin is expected to be in the mid to high teens and is expected to be higher in the second half of the year relative to the first half, reflecting the timing of anticipated pricing actions and further production and sourcing activities.
Speaker Change: Operating expenses are expected to be in the range of $170 million to 190 million weighted slightly more towards the first half of the year in.
Lubbe Kutur: Capital expenditures totaled $10.6 million in the year ended December 31, 2023, compared to $70.5 million in the year-ago period. Let me now turn to our full year 2024 outlook. We expect net revenues to be in the range of $345 million, and net revenues for the first quarter of 2024 are expected to be in the range of approximately $70 million to $75 million. Gross margin is expected to be in the mid to high teens and is expected to be higher in the second half of the year relative to the first half, reflecting the timing of anticipated pricing actions and further production in sourcing activity. Operating expenses are expected to be in the range of $170 million to $190 million, weighted slightly more towards the first half of the year. Capital expenditures are expected to be in the range of $15 million to $25 million.
Speaker Change: Capital expenditures are expected to be in the range of 15 million to $25 million.
Speaker Change: Finally in 2024, we plan to bolster our liquidity and potentially restructure our balance sheet and with that I'll conclude my remarks, and turn the call over to the operator to open it up for your questions. Thank you.
Speaker Change: We will now begin the question and answer session to.
Speaker Change: To ask a question you May press Star then one on your telephone keypad.
Speaker Change: If you were using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: To withdraw your question. Please press Star then two.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Speaker Change: Our first question comes from Andrew <unk> with BMO. Please go ahead.
Speaker Change: Hi, Thanks for taking my question. This is Daniel goes on for Andrew.
Andrew: Hi, Peter.
Andrew: When will the beyond four be rolled out and will that be a phased rollout and is pricing going to be rolled out alongside it.
Andrew: What's the magnitude of pricing you plan on taking.
Operator: Finally, in 2024, we plan to bolster our liquidity and potentially restructure our balance. And with that, I'll conclude my remarks and turn the call over to the operator to open it up to your questions. Thank you. We will now begin the question and answer session. To ask a question, you may press a star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key.
Speaker Change: And kind of what channels and geographies is that planned for.
Speaker Change: Thank you for the question. So we're very excited to have the beyond four come out.
Speaker Change: It will be.
Speaker Change: Shipping.
Speaker Change: This month and probably start to gain broader distribution April timeframe.
Speaker Change: Hey.
Speaker Change: And that'll be in U S retail.
Speaker Change: On pricing there too.
Speaker Change: Separate issues.
Operator: To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Our first question comes from Andrew Strelzick with BMO. Please go ahead. Hi, thanks for taking my question. This is Daniel Gold on for Andrew.
Speaker Change: Beyond for as I mentioned in my remarks was many years in the making.
Speaker Change: And we were able to get it out.
Speaker Change: As we roll into the summer season, this year, but it does coincide well with some pricing changes that we have to take.
Speaker Change: And so.
Speaker Change: They will be largely coincident.
Kenneth B. Goldman: Hi. When will Beyond Four be rolled out? And will that be a phased rollout? And is pricing going to be rolled out alongside it? And what's the magnitude of pricing you plan on taking? And in what channels and geographies is that plan?
Speaker Change: And it certainly.
Speaker Change: Certainly it helps that theres some premium ingredients.
Speaker Change: <unk>.
Speaker Change: Beyond four take an enhanced value proposition and beyond four to help support that pricing.
Speaker Change: In terms of the magnitude, we should probably talk with retailers first before getting into.
Ethan Walden Brown: Thank you for the question. So we're very excited to have the BEYOND 4 come out. It will be shipping next month and probably start to gain broader distribution in the April time frame and into May, and that'll be in U.S. retail.
Speaker Change: This is different details on that.
Speaker Change: But.
Speaker Change: The entire effort is really around making sure that we get back to very healthy margins.
Speaker Change: Did a tremendous amount of work on this.
Speaker Change: Question around elasticity.
Ethan Walden Brown: On pricing, there are two kinds of separate issues. The BEYOND 4, as I mentioned in my remarks, was many years in the making, and we were able to get it out as we roll into the summer season this year, but it does coincide well with some pricing changes that we have to make. And so they will be largely coincident, and certainly it helps that there are some premium ingredients in BEYOND 4, and I think an enhanced value proposition in BEYOND 4 to help support that pricing. In terms of the magnitude, we should probably talk with retailers first before getting into the specific details on that, but the entire effort is really around making sure that we get back to very healthy margins. And we did a tremendous amount of work on questions around elasticity, worked with an external firm, and looked across our portfolio at where we thought pricing had some headroom or room, rather, for growth. And so I think we've made the right decisions here and just look forward to rolling it out.
Speaker Change: With an external firm and looked across our portfolio.
Speaker Change: Where we thought pricing.
Speaker Change: Ted some headroom.
Speaker Change: What room rather for for growth.
Speaker Change: So I think we've made the right decisions here and just look forward to rolling it out but it is really part if I could just reiterate some of things that I was saying on our introductory remarks, it's part of an entire effort to to really reset the business after.
Speaker Change: That 12 to 18 months of effort to reorient, what we're doing from.
Speaker Change: Much more growth at all cost focused.
Speaker Change: Our operating model to one now that is highly focused on sustainability and profitability and so the pricing increase is just one of those things, but if you look at all of the changes that were making whether its a substantial reduction in operating budget will be down significantly from from 2023, if we execute according to our 24.
Speaker Change: <unk>.
Speaker Change: As well as a very substantial reduction in cash use.
Speaker Change: If you look at the global staff cuts we've made over the last several years.
Speaker Change: The one that we did in November was not insignificant and about 19% and so I think where we really rightsize the business to.
Ethan Walden Brown: But it is really part, if I could just reiterate some of the things that I was saying in our introductory remarks, it's part of an entire effort to really reset the business after, you know, about 12 to 18 months of effort to reorient what we're doing from a much more growth at all costs focused operating model to one now that is highly focused on sustainability and profitability. And so the price increase is just one of those things. But if you look at all of the changes that we're making, whether it's a substantial reduction in operating budget will be down significantly from 2023 if we execute according to our 24 plan, as well as a very substantial reduction in cash use. If you look at the global staff cuts we've made over the last several years, because the one that we did in November was not insignificant at about 19%.
Speaker Change: The size of the current opportunity and the growth that we want a critic ahead.
Speaker Change: Pricing.
Speaker Change: It is a very significant tool and historic margin, but it's not the only one we're also.
Speaker Change: Well underway in terms of production efficiencies that we've been chasing and if you think about the magnitude of the effort over the last several years to put the business into a footprint that is consistent with the current opportunities.
Speaker Change: 13 manufacturing locations that are external to our company down to one.
Speaker Change: And bringing a lot of that production in house 2222.
Speaker Change: Benefit from much higher overhead absorption in.
Speaker Change: Material flow efficiencies things of that nature, where just logistics costs, so on and so forth.
Ethan Walden Brown: And so I think we're really on the right side of the business for the size of the current opportunity and the growth that we want to create ahead. Pricing, you know, is a very significant tool in restoring margin, but it's not the only one. We're also well underway in terms of production efficiencies that we've been chasing. And, you know, if you think about the magnitude of the effort over the last several years to put the business into a footprint that's consistent with the current opportunities, we've gone from 13 manufacturing locations that are external to our company down to one. And bringing a lot of that production in-house to benefit from much higher overhead absorption and some material flow efficiencies and things of that nature. And reduce logistic costs, so on and so forth. So it's really part and parcel with an entire effort to reorient the business towards sustainable and profitable organizations. I think I mentioned in the opening remarks that we're going to be discontinuing Jerky because of the same idea there. And then this last one..., https://www.youtube.com.uk That's very helpful.
Speaker Change: So, it's really part and parcel with an entire effort to to reorient the business toward sustainable and profitable organizations I think I mentioned in the in the.
Speaker Change: Opening remarks that we're gonna be discontinuing jerky at the same idea there.
Speaker Change: And then this last.
Speaker Change: Global business due to to take out some of the excess inventory and assets that we have.
Speaker Change: From a write down perspective, and then be able to monetize those a little less pressure on on us. So all of these things again, we werent one size.
Speaker Change: I needed to get a little bit leaner on that now and so in 'twenty four I very much look forward to.
Speaker Change: A lot of this coming to fruition and reset beginning to really show.
Speaker Change: That's very helpful. Thank you.
Speaker Change: Hum.
Speaker Change: Just one more for me can you speak to your confidence in the gross margin guide.
Speaker Change: So I'll give that to Louie, but I think the two main features that I just referenced one is the pricing change as well as this consolidation of our production network and the increased.
Louie: We're continuing rather cogs reductions that you've seen throughout the last 12 months.
Louie: Those will I think help significantly and also clearing out of some of the higher reserve levels.
Operator: Thank you. Mm-hmm. Just one more for me.
Ethan Walden Brown: Can you speak to your confidence in the gross margin guide? I'll give that to Louie, but I think the two main features that I just referenced are the pricing change, as well as this consolidation of our production network and the increase, or, rather, COG reductions that you see throughout the last 12 months. Those will, I think, help significantly in also clearing out some of the higher reserve levels of capital. Yeah, you know, not a whole lot to add to that.
Speaker Change: Yeah.
Speaker Change: Not a whole lot to add to that but you know I think just generally in speaking to sort of our confidence level.
Speaker Change: We feel pretty good about it right and so we did say in the guidance that we provided that we expect.
Speaker Change: Gross margins to be higher in the back half relative to.
Speaker Change: The first half and that's related to some of the timing around some of these actions you know Eaton already discussed the pricing.
Speaker Change: One thing that we have communicated on prior calls as well is that we are.
Lubbe Kutur: But, you know, I think just generally speaking to sort of our confidence level, we feel pretty good about it, right? And so, you know, we did say in the guidance that we provided that we expected gross margins to be higher in the back half relative to the first half. And that's related to, you know, some of the timing around some of these actions. You know, Ethan has already discussed pricing. You know, one thing that we have communicated on prior calls as well is that we are, you know, rolling back to some degree the level of promotions that we've done. We really did some aggressive promotions in 2023 as a means of trying to draw more consumers into the category, and we're taking a little bit of a different approach this year.
Speaker Change: Rolling back to to to some degree right that the level of promotions that we've done we really did.
Speaker Change: Some aggressive promotions in 2023 as a means of trying to draw more consumers into the category, but we're taking a little bit of a different approach. This year. The in sourcing of finished goods production is something that I think.
Speaker Change: It should not be underestimated as Ethan said, it really gives us an opportunity to to sweat our assets more and benefit from.
Speaker Change: The fixed.
Speaker Change: The fixed cost absorption.
Speaker Change: As well as the fact is it helps us.
Speaker Change: From a logistics cost perspective, as well right you can imagine if you have.
Speaker Change: Eight or 10 different co manufacturers in your network.
Lubbe Kutur: You know, the insourcing of finished goods production is something that I think, you know, should not be underestimated. As Ethan said, it really gives us an opportunity to use our assets more and benefit from, you know, the fixed cost absorption, you know, as well as the fact that it helps us from a logistics cost perspective as well, right? You can imagine if you have 8 or 10 different co-manufacturers in your network, you know, you're transporting ingredients and, you know, work-in-process items to multiple locations, that starts to have a, you know, detrimental effect on your logistics costs.
Speaker Change: Youre transporting ingredients in work in process items to multiple locations that starts to have a detrimental.
Speaker Change: The effect on your logistics costs and so all of these these things combined I think give us.
Speaker Change: Pretty pretty good confidence that we should be able to achieve the margin targets that were that were seeking.
Speaker Change: Okay.
Speaker Change: The next question is from Adam Samuelson with Goldman Sachs. Please go ahead.
Adam Samuelson: Yes. Thank you good afternoon, everyone.
Adam Samuelson: Good afternoon.
Adam Samuelson: Hi, So I just wanted to let me Ethan I want to just make sure I'm thinking about 2024 outlet pieces correctly.
Adam Samuelson: And so all of these things combined, I think, give us pretty good confidence that we should be able to achieve the margin targets that we're seeking. The next question is from Adam Samuelson with Goldman Sachs. Please go ahead. Yes, thank you. Good afternoon, everyone.
Adam Samuelson: The revenue outlook, you've given given the gross margin.
Adam Samuelson: Outlook for kind of mid to high teens, the operating expenses and there is some D&A and stock comp. So it's not all cash because also the capex. It would still look like the cash burn based on the gross margin less the Opex Leicester.
Ethan Walden Brown: Definitely. All right, so I just want to, Ethan, I want to just make sure I'm thinking about the 2024 outlook pieces correctly. Given the revenue outlook you've given, given the gross margin, Outlook for kind of mid to high teens, the operating expenses, and there's some DNA in stock comps, so it's not all cash, but there's also the capex, it would still look like the cash burn based on the gross margin less the OPEX less the left the What's the capex addbacks and DNA and stock comp, you would still have a cash Because I'm just trying to think about that level of cash burn in 2024 relative to an ending cash balance in 2023 of $205 million, arguably kind of expecting to burn half or more of your cash balance in 2024 before further liquidity. Yeah, I can. I'll answer that at a very high level and hand it over to Lubbe.
Adam Samuelson: Less that.
Adam Samuelson:
Adam Samuelson: What's the Capex add backs in D&A and stock comp.
Adam Samuelson: You would still have a cash burn from operations in 2024.
Adam Samuelson: $100 million plus.
Adam Samuelson: And what I'm missing something in terms of noncash expenses in there.
Adam Samuelson: Because I'm just trying to think about that level of cash burn in 2024 relative to an ending cash balance in 'twenty, three or $205 million.
Adam Samuelson: Arguably kind of expecting the burn in half or more of your.
Adam Samuelson: Our cash balance from 24 before further liquidity actions.
Speaker Change: Yes, I can exit or how that will then hand, it over but I do think we should probably after the call work through work through this with you on some of the puts and takes.
Speaker Change: We're pretty comfortable that it's going to come in at a reasonable number in.
Speaker Change: Lower than that 170 at the midpoint.
Speaker Change: ILUVIEN can give guidance on that.
Speaker Change: Yeah.
Speaker Change: So Adam I'm not sure what the what assumptions you're baking in there in terms of some of the the noncash add backs but.
Lubbe Kutur: I do think we should probably, after the call, work through this with you on some of the puts and takes. We're pretty comfortable that it's going to come in at a reasonable number, and lower than 100, certainly at the midpoint, but Lubbe can get guidance on that.
Adam Samuelson: I think the number that you're you're sort of.
Adam Samuelson: That you referenced there are roughly $100 million.
Adam Samuelson: I think if you just.
Adam Samuelson: Looked at sort of if you look at some of the big noncash items of depreciation and stock comp from last year and factor that in.
Lubbe Kutur: So, Adam, I'm not sure what assumptions you're making in there in terms of some of the non-cash ad back. But I think the number that you referenced there, roughly 100 million, I think if you just looked at some of the big non-cash items, the depreciation in StockCom from last year and factored that in and then just took our guidance, that would put us right at the range that you' Obviously, we expect to do better in certain areas. The other thing that's not baked into those numbers, part of the reason why we have these significant non-cash charges is that we're writing down certain fixed assets to their estimated fair value so that we can sell them and start to monetize some of those assets, doing the same thing on the inventory side.
Adam Samuelson: And then just take our guidance.
Adam Samuelson: That would put us sort of right at the range that you're talking about.
Adam Samuelson: Obviously, we expect to do better in certain areas of the other thing thats not baked.
Adam Samuelson: Baked into those numbers right. We did you know part of the reason why we have these are significant.
Adam Samuelson: Noncash charges as we're writing down certain fixed assets write too to estimated fair value. So that we can sell them and start to monetize some of those those assets doing the same thing on the inventory side and so that should.
Lubbe Kutur: And so that should provide some benefit to cash as well. We did talk about that we're looking to bolster our liquidity. So, look, we're doing everything that we need to do to fix sort of the fundamentals of the business so that we are fundamentally a lower cash consumption business with a longer-term goal, obviously, of getting to sustained free cash flow positive. But we're being responsible as well.
Adam Samuelson: That should.
Adam Samuelson: Provide some benefit to cash as well.
Adam Samuelson: We did talk about that we're looking to bolster our liquidity. So look we're doing everything that we need to do to fix.
Adam Samuelson: Fix the fundamentals of the business. So that we are fundamentally a lower cash consumption business right with the longer term global obviously of getting to sustained free cash flow positive, but we're being responsible as well and this is why you know why.
Lubbe Kutur: And this is why one of our objectives for 2024 is to bolster the balance sheet. But, like I said, there's other puts and takes that just our guidance alone on its face would not necessarily consider but we think will provide a little bit of upside relative to the number that you are estimating. Okay, all right, that's helpful. Let me take that offline.
Adam Samuelson: One of our objectives for 2024 is to bolster the balance sheet, but you know like I said, there's other puts and takes that.
Adam Samuelson: Our guidance alone on its face would not necessarily consider it but we think will provide a little bit of upside relative to the number that you were estimating.
Speaker Change: Okay, Alright, that's helpful and I can take that offline if I could ask a follow up just on the outlook for revenues, which you have down.
Lubbe Kutur: If I had to follow up just on the outlook for revenues, which you have down, 8%, so it's a roughly flat year over year for 2024. What are volumes assumed in that? At this juncture, I'm just trying to get a sense of how much price elasticity you really think would come from the higher price increases, the higher prices, particularly in US retail. Yeah, so we don't necessarily guide to, you know, volume, right? So we gave you the revenue dollar projection. But what I can say is that we looked at price elasticities very deeply as part of this exercise, and we're looking at our pricing. And it is going to vary by channel and region, etc. But we believe, and we feel pretty confident that in some of the areas where we are looking to raise prices, that the elasticity of the changes in price will offset or more than offset the, you know, anticipated loss of volume as a result of the price increase. And so I don't want to get too specific on volume numbers.
Speaker Change: 8% to roughly flat year over year for 2024.
Speaker Change: What our volumes assumed in that.
Adam Samuelson: At this juncture I'm, just trying to get a sense of how much price elasticity and do you really think would come from the higher price increases higher prices, particularly in U S retail.
Speaker Change: Yes, so we don't.
Speaker Change: We don't necessarily guide to.
Speaker Change: Tom volume right. So we gave you the revenue dollar projection, but what I can say is we.
Speaker Change: We looked at price elasticity is varied.
Speaker Change: Deeply as part of this.
Speaker Change: Extra size and we're looking at our at our pricing and it is going to vary by channel and region et cetera, but we believe and we feel pretty confident right that.
Speaker Change: Somewhat in some of the areas, where we are looking to take pricing.
Speaker Change: That the elasticity.
Speaker Change: With the changes in price will offset or more than offset the.
Speaker Change: Anticipated loss of volume as a result of the price increase and so I don't want to get too specifics are too specific on volume numbers, but generally speaking right. We would expect the elasticity to be less than one.
Lubbe Kutur: But, you know, generally speaking, right, we would expect the elasticity to be less than one. Okay, so just to be clear there, if you're still having revenue dollars down, but the price increase is offsetting the volume declines, is the revenue decline, the dollar decline a function of exiting product lines or regions, or what then would be driving what would be underpinning the revenue dollar decline? Yeah, some of it like, so there is some exit of product lines, you know; we talked about jerky, as an example. The other thing is, you know, the reality is our US retail business, which continues to be challenged. And so there is some assumption in there, which, you know, we hope will turn out to be conservative, but nonetheless, you know, we've seen baseline velocity erosion in the US retail channel. And so we're trying to factor that in, you know, particularly on the downside. So, you know, those are sort of the key drivers, I guess, when you look at the lower end of the range. I think that's right.
Speaker Change: Okay, So just to be clear there.
Speaker Change: If you're still having revenue dollars down at the price increases offsetting the volume declines as the revenue declines the dollar decline a function of exiting product lines or regions or what would be driving what would be underpinning the revenue dollar decline expectation.
Speaker Change: Yeah. So some of it like so there is some exit of product lines, we talked about jerky as an example.
Speaker Change: The other thing is no.
Speaker Change: The reality is our U S retail business right continues to be challenged and so there is some assumption in there.
Speaker Change: We hope will turn out to be conservative, but nonetheless, we've seen.
Speaker Change: Baseline.
Speaker Change: <unk> erosion in U S retail channel and so we're trying to factor that in you know.
Speaker Change: Particularly on the downside.
Speaker Change: So.
Speaker Change: Those are sort of the a D a.
Speaker Change: The key drivers I guess.
Speaker Change: When you look at the lower end of the range I think that's right.
Ethan Walden Brown: The continued kind of vulnerability in U.S. retail is something that just as you do your models, as we do our models, right? We didn't want to tattoo Rosie a picture around her neck. I think the general notion here is that we're doing a massive product launch that's transformative in terms of what we've done over the last eight years. It's probably the most important renovation we've done since the Beyond Burger. And then we're also taking prices. So the two of those make it very hard to predict with a ton of certainty any type of growth. We just don't know.
Speaker Change: The continued kind of.
Speaker Change: Portability and in U S retail.
Speaker Change: It's something that just as you do your models as we do our models right, we didn't want to rosy picture around it.
Speaker Change: The general notion here is that we're doing.
Speaker Change: Asset product launch.
Speaker Change: Synthetic twins.
Speaker Change: What we've done over the last eight years, it's probably the most important renovation we've done.
Speaker Change: Since the beyond Burger.
Speaker Change: And then we're also taking price so the two of those make it very hard to predict with a ton of certainty any type of growth. We just don't know so we wanted to come in with something that was.
Ethan Walden Brown: So we wanted to come in with something that was reflected kind of current information and hope to change it and have a better opportunity. I appreciate all that color. I'll pass it on. Thank you. The next question is from John Baumgartner with Mizuho. Please go ahead. Good afternoon.
Speaker Change: <unk> kind of current information and hope to change it and have a better outcome.
Speaker Change: Okay I appreciate all that color I'll pass it on thank you.
Speaker Change: Yes.
Speaker Change: The next question is from John Baumgartner with Mizuho. Please go ahead.
John Baumgartner: Good afternoon, and thanks for the question.
John Baumgartner: Sure.
John Baumgartner: Thanks for the question. Why don't I stick with the guidance for next year and, specifically, OPEX? I mean, the midpoint you're guiding to is about a 25% drop from your recent sort of run rates. The global forest reduction announced last quarter, I guess, explains a small part of it. But I'm trying to understand the rest of that decline, especially in the context of what I guess seems to be more reinvestment in marketing and brand building at this point. So I think I've said this before, but one of the things I'd like to say about marketing is that, you know, marketing is a lot easier when it's true. And what really gets to is you gotta have a great product. And I think Edward Mann said it in an even more pointed way, which was marketing is what you do when your product's no good.
John Baumgartner: Wanted to stick with the guidance for next year and specifically the Opex I mean, the midpoint, you're guiding to it's about 25% drop from your recent sort of run rates.
John Baumgartner: The Global force reduction announced last quarter, I guess explains a small part of it but I'm trying to understand the rest of that decline, especially in the context of what I guess seems to be more reinvestment in marketing and brand building at this point.
John Baumgartner: So I think I've said this before but you know one of the.
John Baumgartner: Things I'd like to say that marketing is it.
John Baumgartner: Marketing is a lot easier when it's true.
John Baumgartner: And it really gets to is you've got to have a great product.
John Baumgartner: With my answer it in an even more pointed way, which was marketing what you do when your products no. Good.
Ethan Walden Brown: And, and, you know, what we have to do, right, is re-engage the consumer in this entire category with products that are really delivering value to them in a way they understand. And so, for us, that's really about continuing to improve the taste, which I think we've done with Beyond4, but also addressing this fundamental issue around health. You know, as I said in my prepared remarks, we really do have a set of products that can deliver today. Fantastic health, everyone. I've seen it in my own life, in my family's, I've seen it in studies we've done with Stanford, which I won't bore you with today, and others.
John Baumgartner: And what we have to do right is reengage the consumer.
John Baumgartner: This entire category with products that are.
John Baumgartner: Really delivering value to them in a way that they understand and so for us that's really about continuing to improve taste, which I think we've done would be onshore.
John Baumgartner: But also addressing this fundamental issue around health.
Speaker Change: As I said in my prepared remarks.
John Baumgartner: We really do have a set of products that today can deliver fantastic health outcomes.
John Baumgartner: I've seen it in my own life and my family's I've seen it in studies were done with Stanford, which I won't.
John Baumgartner: The labor today.
John Baumgartner: And in others, but.
Ethan Walden Brown: But what we wanted to do was take it to another level, and we wanted to continue this march toward that perfect build. And I think we've taken a really big step here. It is not just an iteration; it's something that's more transformative. And so to be able to have these products where you're enjoying the satiating experience of having a burger or having a bolognese, or whatever you decide to do with it, and yet having an oil that, for example, many in the nutrition community and medical community would characterize as heart-healthy is something that is new. And it's something that changes the dynamic of the decision. You know, this went from five grams to two grams of saturated fat. And it's not just the composition of...
John Baumgartner: What we wanted to do was taken another level and we wanted to continue this march towards that perfect builder and I think we've taken a really big step here. It is not just in the duration, it's something that's more transformative.
John Baumgartner: And so to be able to have these products where you're enjoying.
John Baumgartner: The satiating experience, having a burger or having a <unk> or whatever you decide to do with it.
John Baumgartner: And yet having a an oil that that.
John Baumgartner: For example, many of the Christian community Medical community would characterize as heart healthy.
John Baumgartner: It is something that that is new.
John Baumgartner: It's something that changes the dynamic of the decision.
John Baumgartner: We went from five grams to two grams of saturated fat and it's not just the composition of sorry, it's not just the.
Ethan Walden Brown: Sorry, it's not just the... the level of fat in our product; it's the fact that it now comes from a source that I think is very well identified as delivering benefits, not just because of the low levels but because of what's in it. So this is things like polyphenols and antioxidants and other plant compounds that, depending on what study you want to look up, people have attributed to being helpful in the area of cardiovascular disease or dementia or, you know, the health of your eyes or skin, whatever it is.
John Baumgartner: The level of.
John Baumgartner: And our product is the fact that it now comes from a source that I think is very well identified is delivering benefits not just because of the low levels because of what's in it. So this is things like polyphenol antioxidants and other plant compounds that depending on what study you want to look up.
John Baumgartner: People have attributed to being helpful in the area of cardiovascular disease or dementia or.
John Baumgartner: The health of drives or skin whenever it is theres a lot of benefit here. We've also been able to reduce the sodium which as I've said before is a red herring, but it's still there.
Ethan Walden Brown: There's a lot of benefit here. We've also been able to reduce the sodium, which, as I said before, is a red herring, but it's still there and something we have to address. And so at 14 percent of the daily value now, you know, that's a significant improvement. And then you look at the proteins, you know, whether we're using not just pea protein but by going with red lentils and fava beans and brown rice, we've increased the protein amount.
John Baumgartner: And suddenly we have to.
John Baumgartner: Address so at 14% of daily value now.
John Baumgartner: Significant improvement.
John Baumgartner: And then you look at the proteins whether were using not just our pea protein, but probably growing with red lentil fava beans, as brown rice, we've increased the protein them out. So you have a product that fundamentally delivers a stronger value proposition and they will certainly go to market around that but there's also a word of mouth in this community and there is a strong desire.
Ethan Walden Brown: So you have a product that fundamentally delivers a stronger value proposition, and you'll certainly get a market around that, but there's also word of mouth in this community, and there's a strong desire, whether it's the health community or the environment community or the welfare community, for these products in this category to come back. And so I think we're going to leverage that, and you'll see us work, you know, a lot with registered dieticians and nutritionists in the medical community, as well as with these very large health organizations I mentioned, American Heart Association, American Diabetes Association. In fact, the American Diabetes seal will be on the package itself, Clean Maple Project, and others.
John Baumgartner: Whether it's the health community or the environment community was gonna welfare community.
John Baumgartner: These products in this category to come back.
John Baumgartner: And so I think we're going to leverage that and Youll see us work a lot with better citations nutritionist and the medical community.
John Baumgartner: As well as with these very large health organizations that I mentioned, the American Heart Association American Diabetes Association in fact, the American diabetes.
John Baumgartner: Seal will be on the package itself clean label project and others. So.
John Baumgartner: We're going to have to market for sure, but we're also going to do it in a way that look this is a fundamental shift in the value proposition is enhanced increased.
Operator: So we're going to have to market it, for sure, but we're also going to do it in a way that, you know, this is a fundamental shift in the value proposition. It's enhanced, it's increased, and I think people will begin to realize that. So this use of grassroots marketing, this use of institutions that are standing behind this, I think will allow us to do it much more efficiently, which is some of the, www.youtube.com or www.youtube.com. Okay, I don't know. Now, I think you covered it.
John Baumgartner: And I think people will begin to realize that so there's use of grass roots marketing. This use of institutions that are standing behind this I think will allow us to do it much more efficiently and so some of the.
John Baumgartner: Cost cut out of the business.
John Baumgartner: I think only helps us to become profitable more quickly versus hurt us from a marketing strategy.
John Baumgartner: Okay.
Speaker Change: No I think you've covered it.
Speaker Change: Okay, then it's a follow up on the gross margin guidance for 2024.
Speaker Change: The improvement there.
Speaker Change: How much does that rests on the price increases I mean, I guess it sounds as though you're not building in much operating leverage from new volume growth. The co man consolidation I think has been accruing sort of quietly all along and then what the China anti dumping duties in the Pea protein I imagine input cost can't do all that beneficial this year. So it feels like the gross margin expansion in the guide a fair amount.
John Baumgartner: Okay, then to follow up on the gross margin guidance for 2024. The improvement there, how much does that rest on price increases? I mean, I guess it sounds as though you're not building in much operating leverage from new volume growth. The Coleman consolidation, I think, has been accruing sort of quietly all along.
Speaker Change: And then just boils down to the price increases that I guess can you walk through the kind of the relative contribution of magnitude there for the driver.
Ethan Walden Brown: And then with the China anti-dumping duties and the pea protein, I imagine input costs can't be all that beneficial this year. So it feels like the gross margin expansion in the guide, a fair amount of it just boils down to price, is that right? I guess you can see the kind of relative contribution of magnitude there for the driver. So I think, you know, you hear me talk a lot about. I'm going to be talking about how proud I am of the Research and Development team here. I often spend more time on it than I do with the Operations team. One of the things that I have felt... hasn't been fair, not fair, but just has been unfortunate is that, you know, they're doing a really good job driving our fundamental cost structure down, right, whether it's our facilities in Pennsylvania or Missouri.
Speaker Change: So you'll hear me talk a lot about.
Speaker Change: <unk>.
Speaker Change: How proud I am of the research and development team here.
Speaker Change: And I often spend more time on it as I do and the operations team and one of the things that I have felt hasnt been fair not fair, but just has been unfortunate is that they're doing a really good job driving our fundamental cost structure now alright, whether it's our facilities in Pennsylvania, and Missouri integrate operators that are <unk>.
Speaker Change: Driving efficiency and every quarter, we have something that comes up.
Speaker Change: There is dislocating from one co packer in the fees or.
Speaker Change: It's been high reserves coming in from legacy products or partnerships that are kind of disrupted that right and have not allowed them to shine publicly although I see what they're doing.
Speaker Change: And so as we steady and kind of.
Speaker Change: Bring in the production network I think some of those savings that we're achieving in our facilities will start to come through a little bit better and an example of that is just the.
Ethan Walden Brown: I mean, these are great operators that are really driving efficiency. And every quarter, we have something that comes up. You know, whether it's dislocating from one co-packer and there's some fees or, you know, some high reserves coming in from legacy products or partnerships that have kind of disrupted that, right? And have not allowed them to shine publicly, although I see what they're doing.
Speaker Change: As were taking production out of external networks into internal the utilization rates in our facilities are significantly improving overhead absorptions significantly improvement.
Speaker Change: So these are things that I think even though we're gonna be using for example, and beyond for some more premium ingredients, they kind of offset and then even driven down somewhat.
Ethan Walden Brown: And so as we steady and kind of bring in the production network, I think some of those savings that we're achieving in our facilities will start to come through a little bit better. And an example of that is just the, you know, as we're taking production out of external networks and into internal, the utilization rates in our facilities are significantly improving, and overhead absorption is significantly improving. So these are things that I think, even though we're going to be using, for example, in BEYOND4 some more premium ingredients, they kind of are offset and then even driven down somewhat over time by the internalization of our production and the continued production. In overall cost. So for the guys who are listening and the gals who are listening, appreciate it. And, you know, you guys get to keep it up. We're finally going to be able to show it.
Speaker Change: Time Bye bye.
Speaker Change: Renovation of our production and the continued reduction in.
Speaker Change: Dan.
Speaker Change: Overall cost so the guys are listening to the calls or listen I appreciate it.
Speaker Change: You guys got to keep it up we're finally going to be able to show it.
Speaker Change: Yeah, I would just add you know.
Speaker Change: It's fair to say that.
Speaker Change: The the.
Speaker Change: Price increases are a significant factor that play into the gross margin expansion that we're targeting.
Speaker Change: For for next year, but it's not just that.
Speaker Change: As Ian mentioned right, there's a lot of stuff that's been going on.
Speaker Change: Across the the production in our operations.
Speaker Change: The organization et cetera.
Speaker Change: The other thing in addition to just you know price increases we talked about pulling back on trade. So the combined.
Speaker Change: Impact of those two things right actually has a pretty potentially meaningful impact on <unk>.
Lubbe Kutur: Yeah, I would just add, you know, I think it's fair to say that, you know, the price increases are a significant factor that plays into the gross margin expansion that we're targeting for next year. But it's not just that, as Ethan mentioned, right, there's a lot of stuff that's been going on, you know, just across the production, our operations, organization, etc. You know, the other thing is that, in addition to just, you know, price increases, we talked about pulling back on trade.
Speaker Change: Overall net revenue per pound.
Speaker Change: And then you know you mentioned the.
Speaker Change: Internalization rate increased in sourcing of our of.
Speaker Change: Of our finished goods production.
Speaker Change: And you mentioned that some of that has.
Speaker Change: Pretty much been accruing already.
Speaker Change: I think that's true, but there still was a lot of noise in our cost of goods.
Speaker Change: In 2023, even as we we're internalizing, we're still dealing with.
Speaker Change: Things like Underutilization fees, and things like that and I think you know.
Speaker Change: That type of stuff should be significantly reduced in 2024, and so now I think we are in a position where we start to benefit in a much more meaningful way from bringing a lot of those production volumes in house, and then I mentioned, a little bit earlier that there should be benefits as well from just.
Lubbe Kutur: So the combined, you know, impact of those two things, right, actually has a pretty potentially meaningful impact on overall net revenue per pound. And then, you know, you mentioned the internalization, right, the increase in sourcing of our finished goods production, you know, and you mentioned that, you know, some of that has, you know, I think that's true, but there still was a lot of noise in our cost of goods in 2023. You know, even as we were internalizing, we're still dealing with things like underutilization fees and things like that.
Speaker Change: A more streamlined network overall from in terms of logistics costs. When you look at some of these initiatives that we're we're targeting now to.
Speaker Change: Reduce overall inventory balances that benefits, you know warehousing costs and things like that even the reclassification of some of these fixed assets to held for sale right.
Speaker Change: We will have a beneficial impact from a depreciation perspective right.
Lubbe Kutur: And I think, you know, that type of stuff should be significantly reduced in 2024. And so now I think we are in a position where we start to benefit in a much more meaningful way from bringing a lot of those production volumes in-house. And then I mentioned a little bit earlier that, you know, there should be benefits as well from, you know, just a more streamlined network overall in terms of logistics costs. When you look at some of these initiatives that we're targeting now to, you know, reduce overall inventory balances, that benefits, you know, warehousing costs and things like that. You know, even the, you know, reclassification of some of these fixed assets to held for sale will have a beneficial impact from a depreciation perspective, right? And so, you know, you combine all of these things together, and that makes us feel pretty optimistic about where gross margins can go this year. Thanks, Ruby.
Speaker Change: So you combine all of these things together and.
Speaker Change: That makes us feel.
Speaker Change: Pretty optimistic about where gross margins can go this year.
Speaker Change: Okay. Thanks.
Speaker Change: Sure.
Speaker Change: The next question is from Robert Moskow with CD Cowen. Please go ahead.
Robert Moskow: Hi, Thanks for the question.
Robert Moskow: Ethernet Luby.
Robert Moskow: It looks like that the center of gravity is going to continue to shift to international markets for your business.
Robert Moskow: Can you speak to the profit margin profile of operating internationally, how is it different from domestic.
Robert Moskow: Can you operate at a respectable margin overseas or are there complicating factors that make it more difficult than here.
Speaker Change: Thanks, Rob good to hear from you.
Speaker Change:
Robert Moskow: So.
Speaker Change: When we think international obviously as I've said, a lot about Europe in the past.
Robert Moskow: Some sense.
Robert Moskow: Yes.
Robert Moskow: Coming kind.
Robert Moskow: Kind of its own.
Robert Moskow: Operation over there so it's not necessarily like were shipping things here or anything of that nature of their driving.
Robert Moskow: Now the same cost reduction we have a terrific partner there.
Robert Moskow: Sure. The next question is from Robert Moskow with C.D. Cowan.
Robert Moskow: It doesn't have a production.
Robert Moskow: It's really a true partner to us as well as a very good general manager their team so I think.
Ethan Walden Brown: Please go ahead. Thanks for the question. Ethan and Lubbe, it looks like the center of gravity is going to continue to shift to international markets for your business. Can you speak to the profit margin profile of operating internationally? How is it different from domestic?
Robert Moskow: I don't foresee that being particularly challenged from a cost reflected now.
Robert Moskow: We're still pretty nascent there. So we do have to continue to adjust downward the cost structure, but that's possible.
Ethan Walden Brown: Can you operate at a respectable margin overseas, or are there complicating factors that make it more difficult than here? Thanks, Robert. It's good to hear from you. When we think international, obviously, I've said a lot about Europe in the past, and in some sense... the U.S., coming, kind of its own operation over there. So it's not necessarily like we're shipping things from here or anything of that nature. They're driving a lot of the same cost reductions. We have a terrific partner there who does some of our production and is really a true partner to us, as well as a very good general manager there and team. So I think, you know, I don't foresee that being particularly challenged from the cost perspective now. We're still pretty nascent out there.
Robert Moskow: It's something that we'll continue to focus on some of our retail pricing. For example is just too high for those markets. So we need to continue to adjust it but that comes with time and further localization of our of our network, which is doable.
Robert Moskow: At the time to do it.
Robert Moskow: And then on the kind of foodservice side.
Robert Moskow: We will continue to drive cost out of out of those products and improve margin.
Robert Moskow: I think youll start to see that come through.
Robert Moskow: And 24.
Speaker Change: Yeah, no it's not.
Robert Moskow: And what I would add to that Rob, but I think fundamentally if you look at our international business relative to U S. It does skew more towards foodservice and we have we've built a pretty meaningful business now with.
Lubbe Kutur: And so we do have to continue to adjust the cost structure downward, but that's possible. And it's something that we'll continue to focus on because some of our retail pricing, for example, is just too high for those markets. And so we need to continue to adjust it. But that comes with time and further localization of our network, which is doable. We just need the time to do it.
Robert Moskow: Some of the large.
Robert Moskow: <unk> customers.
Speaker Change: National and so as you can imagine the margin profile for that business will look somewhat different than on the retail side, but I guess the short answer to your question about you know.
Speaker Change: Yeah.
Robert Moskow: Do we have.
Robert Moskow: And then on the, you know, kind of food service side, we'll continue to drive cost out of those products and improve margin. And I think you'll start to see that come through. Yeah, not a lot I would add to that, Rob, you know, but I think fundamentally if you look at our international business relative to U.S., it does skew more towards food service and, you know, we have, we've built a pretty meaningful business now with, you know, some of the large, you know, QSR customers in international and so, you know, as you can imagine, the margin profile for that business would look somewhat different from then on the retail side, but, you know, I guess the short answer to your question about, you know, do we, you know, have respectable margins in international, I would say yes, right, but as Ethan mentioned, there's still, you know, a number of things and initiatives that we're pursuing to, you know, to bring about even further improvement in margin in international business.
Robert Moskow: Have respectable margins and then international I would say, yes, alright, but as Ian mentioned there is still.
Robert Moskow: A number of things and initiatives that we're pursuing to.
Robert Moskow: Two to bring about even further improvement in margin international business and it is striking to you and that is directly responsive, but gives us the opportunity as it is.
Robert Moskow: Is striking to see the difference there in terms of uptake of the category of products that I mentioned.
Robert Moskow: In my prepared remarks is significant.
Robert Moskow: Within a several block radius in London.
Speaker Change: Youre going to Macau.
Speaker Change: Mcdonald's getting beyond Burger, you're going to Starbucks getting beyond sausage piece.
Robert Moskow: Pizza and getting.
Robert Moskow: Pepperoni and it's.
Robert Moskow: These trends tend to be stronger in Europe, and then come over here and.
Robert Moskow: That's certainly our hope that we'll get through the political nation of these protein choices here in the U S and just get back to Hey, let's do something that's good for our <unk> environment.
Speaker Change: But I'm very impressed that youre going to Mcdonald's and Burger King in London, when you visit there so.
Robert Moskow: And it is striking as you, and that is not directly responsive, but it is an opportunity, it is striking to see the difference there in terms of uptake of the category and products, the thing I mentioned, you know, in my prepared remarks is significant, you know, within a several block radius in London, you know, you're going to McDonald's and getting Beyond Burger, you're going to Starbucks getting a Beyond Sausage, Pizza and getting, you know, Beyond Pepperoni and it's, you know, these trends tend to be stronger in Europe and then come over here and that's certainly our hope that we'll get through the politicalization of these protein choices here in the U.S. and just get back to, hey, let's do something that's good for our health, good for the environment. Well, Ethan, I'm very impressed that you're going to McDonald's and Burger King in London when you visit there.
Robert Moskow: Keep up the good.
Robert Moskow: Fight.
Robert Moskow: Yes.
Speaker Change: Yeah, but you you also mentioned that pricing is too high.
Robert Moskow: For several of your products in the market I think you've said that before can you be more specific as to why that is is it is it more commoditized category in Europe or.
Robert Moskow: How do I think about that.
Speaker Change: Let me give the details on it but I was talking about retail.
Robert Moskow: It's just we're.
Robert Moskow: Still.
Robert Moskow: Think about beyond 2009 here in the United States like we're still kind of getting going there in terms of the overall.
Robert Moskow: Production processing things of that nature, but clearly for the long.
Speaker Change: We were at that point, but loop you can give us some.
Speaker Change: Detail.
Loop: Yeah, Rob you know I think.
Loop: One of the differences.
Loop: When you look at the retail landscape in the EU versus the U S. As they have a much larger.
Loop: Private label.
Loop: Presence right and so I think that the penetration of private label in the EU is about double.
Loop: You know here in the U S and so there are there are.
Ethan Walden Brown: So keep up the good fight. But you also mentioned that pricing is too high for some of your products in the market. I think you've said that before. Can you be more specific as to why that is?
Robert Moskow: There is a much.
Robert Moskow: Broader I guess portfolio of of items that compete in our category that at a much lower price and the consumer in the EU does seem to be.
Robert Moskow: Is it more commoditized, the category in Europe? Or, what do I think about that? Yeah. No, I'll let Libby give the details on that, but I was talking about retail, and it just – we're still – Thanks for. Yeah, Rob. One of the differences when you look at the retail landscape in the EU versus the U.S. is that they have a much larger private label presence, right? And so I think the penetration of private label in the EU is about double that of the U.S. And so there is a much wider, I guess, portfolio of items that compete in our category at a much lower price, and the consumer in the EU does seem to be, you know, a little bit more predisposed to private label than maybe the average U.S. consumer.
Robert Moskow: A little bit more predisposed towards private label than maybe the average U S consumer.
Robert Moskow: Two years ago. It took some steps to close the the price gap of our products relative to the broader competitive set.
Robert Moskow: In the EU, but certainly certain product categories, where we still remain at a pretty healthy premium and I think over time the goal would still be to try to.
Robert Moskow: Compressed that gap somewhat not necessarily I don't know that theres a needs to come down to the level of private label in the region. For example, but there are areas, where we think that the price gap is still.
Robert Moskow: Wider than where it needs to be but that's something that will occur over time, you know I don't I don't think it's something that we're immediately looking to too.
Robert Moskow: We took some steps two years ago to close the price gap of our products relative to the broader competitive set in the EU, but there are certainly certain product categories where we still remain at a pretty healthy premium. And I think over time the goal would still be to try to compress that gap somewhat, you know, not necessarily, you know. I don't know that there's a need to come down to the level of private label in the region, for example, but there are areas where we think that the price gap is still wider than where it needs to be. But that's something that will occur over time. You know, I don't think it's something that we're immediately looking to address. And so those are just some general fundamental differences, I think, between trade in the EU versus the U.S.
Robert Moskow: To address and so.
Robert Moskow: That's a yes.
Robert Moskow: That's just some some general fundamental differences I think between the the trade in the EU versus the U S.
Speaker Change: Okay. Thank you.
Robert Moskow: Sure.
Speaker Change: Thanks, Roger and thanks, Rob.
Speaker Change: The next question is from Alexia Howard with Bernstein. Please go ahead.
Alexia Howard: Thank you good evening everyone.
Robert Moskow: Everybody likes it.
Alexia Howard: So can we just get back he loved the dynamic in the U S and how how do you go about recruiting last chemo.
Alexia Howard: If people with somehow disappointed in previous product what compels them back into this.
Alexia Howard: Especially if the price gaps in animal products are expanding because of the price increases you're planning to take and then specifically I guess linked to that marketing spend expected to be up or down in 2024.
Speaker Change: I think on the question of bringing people back into the <unk>.
Alexia Howard: Okay, thank you. Thanks, Rob. Thanks, Rob. The next question is from Alexia Howard with Bernstein. Please go ahead. Thank you. Good evening, everyone.
Speaker Change: Category.
Robert Moskow: The biggest deterrent.
Robert Moskow: In this health question Alright.
Robert Moskow: You've heard me talk about it before that there is a.
Robert Moskow: No.
Robert Moskow: It's not.
Ethan Walden Brown: I like it. So, can we just get back to the dynamic in the U.S. and how do you go about re-recruiting lapsed consumers if people were somehow disappointed in previous products? What compels them back into this, especially if the price gaps for animal meat products are expanding because of the price increases you're planning to take? And then specifically, I guess, linked to that, is marketing spend expected to be up or down in 2024? I think on the question of bringing people back into Category, the biggest Current has been this health question, right?
Robert Moskow: Without impetus in and support from the industry.
Robert Moskow: That needs to really be looked at as well I mean, it is it's not just the animal protein players and their lobbyists, but it's actually the pharmaceutical part.
Robert Moskow: Members of the pharmaceutical industry, which I find to be.
Robert Moskow: Kind of disturbing actually.
Robert Moskow: And so we had to write the message and you know we can do that by yelling from the.
Robert Moskow: Rooftop about the benefits of our existing products or we can just trying to make them even more.
Robert Moskow: Healthier an unassailable at some point so that's what we've done I think would be on forward will continue to do it you can expect future iterations to continue to drive improvements.
Ethan Walden Brown: And you know you've heard me talk about it before that there is a, you know... It's not without impetus and support from the incumbent industry. And that needs to be really looked at as well.
Robert Moskow: And then it's just linking up with associations and national institutions.
Robert Moskow: Really can validate what we're talking about and to help develop these products. That's a fascinating part about this work as we didn't just do this.
Ethan Walden Brown: I mean, it's not just the animal protein players and their lobbyists, but it's actually the pharmaceutical members of the pharmaceutical industry, which I find to be kind of disturbing. And so we had to write the message, and we can do that by yelling from the rooftop about the benefits of our existing products, or we can just try to make them even healthier and unassailable at some point. So that's what we did, I think, with Beyond 4. And we'll continue to do it. You can expect future iterations to continue to drive improvement. And then it's just linking up with associations and national institutions that can really validate what we're talking about. And they help develop these products. That's the fascinating part about this work is that we didn't just do this, you know, in a conference room on our own; we were out in the community talking to doctors and nutritionists, and each of these institutions, our head of communications did an amazing job.
Robert Moskow: In a.
Robert Moskow: The conference room on our own we were out in the community talking to doctors and nutritionists on each of these institutions are head of communications did amazing job.
Robert Moskow: Pulling together, an ecosystem of doctors and nutrition us.
Robert Moskow: Different national health organizations, as well as universities and we listened.
Robert Moskow: And we work very closely with them and I can go back to individual conversations with individual doctors.
Robert Moskow: That relates to specific inputs that we used.
Robert Moskow: And so I do think that there's an opportunity here for more organic style of marketing that relies on the power of social media.
Robert Moskow: It relies on the fundamental truth of the products.
Robert Moskow: To bring people back in and this wasn't just a health upgrade.
Robert Moskow: This was something that for years, we've been focusing on creating much more of a neutral beef taste.
Robert Moskow: As I've mentioned many times there is over 4000 molecules that make me.
Robert Moskow: Tastes like meat and our job is to use the scientific expertise we have here to match those with now I guess what are the same Molly.
Ethan Walden Brown: Pulling together an ecosystem of doctors and nutritionists and different national health organizations as well as universities, we listened, and we worked very closely with them. And I can go back to individual conversations with individual doctors that relate to specific inputs that we used. And so I do think that there's an opportunity here for a more organic style of marketing that relies on the power of social media and relies on the fundamental truth of the products to bring people back in. And this wasn't just a health upgrade.
Robert Moskow: Molecules in Plas and then find out what the main drivers are and incorporate those into our products and I think the team has done an amazing job with this product doing that so you get benefit and help you get a benefit in taste and you get the word out and we've been very successful.
Robert Moskow: Over the last decade, and using people in a position of influence within society.
Robert Moskow: To carry that message because they believe in it and when the messages. This powerful when you go to the opportunity to help people really improve the cardiovascular health to really improve.
Robert Moskow: The risk outcomes that they face in their day to day life from a health perspective, there are folks in a position of influence that want to talk about that and so you're going to see us go back to that playbook and a very big way.
Ethan Walden Brown: This was something that for years we've been focusing on creating much more of a neutral beef taste. You know, as I've mentioned many times, there are over 4,000 molecules that make meat taste like meat. And our job is to use the scientific expertise we have here to match those with analogous or the same molecules and plants and then find out what the main drivers are and incorporate those into our products. And I think the team has done an amazing job with this product doing that. So you get a benefit in health, you get a benefit in taste, and you get the word out. And, you know, we've been very successful over the last decade in using people in a position of influence within society to carry that message because they believe in it.
Robert Moskow: To get this message out and whether it's ambassadors and influencers, whether it's some of the institutions when you're trying to do some of that good people recognize it and theres a lot of truth to it.
Robert Moskow: You tend to get help and I think.
Robert Moskow: We're gonna get a little help from our friends on this one.
Robert Moskow: And when will it be optimum shelf is a national launch in the first half of the year.
Speaker Change: Well, if that's a personal question I can send you something.
Speaker Change: Hi.
Speaker Change: It really is that big of a leap.
Speaker Change: Just coming back to the marketing spend.
Speaker Change: Is that going to be up or down.
Ethan Walden Brown: And when the message is this powerful, when you have the opportunity to help people really improve their cardiovascular health, to really improve the risk outcomes that they face in their day-to-day life from a health perspective, there are folks in a position of influence that want to talk about that. And so you're going to see us go back to that playbook in a very big way to get this message out. And, you know, whether it's ambassadors or influencers, whether it's some of the institutions, when you're trying to do something that's good and people recognize it, and there's a lot of truth to it, you tend to get help.
Speaker Change: And then I'll pass it on.
Robert Moskow: Okay.
Speaker Change: Like I said, we do expect in the aggregate our marketing spend to be down as you can imagine if you look at our guidance our opex guidance.
Speaker Change: What that implies in terms of year over year decline, we are taking pretty broad cuts.
Speaker Change: Across the organization.
Speaker Change: But I think when you start to.
Speaker Change: Dig down into specific areas of the business specific departments.
Ethan Walden Brown: And I think we're going to get a little help from our friends on that. And when will it be out on the shelf? Is it a national launch in the first half of the year? Well, if that's a personal question, I can answer, Okay, it's kind of.
Speaker Change: What really matters is how that spend is going to be directed and so ethan.
Speaker Change: <unk> touched on this but.
Speaker Change: It's really the mix of the marketing spend and really taking a targeted approach being very deliberate.
Ethan Walden Brown: I don't know if it really is that big of a leap forward. And just coming back to marketing spend, is that going to be up or down this year overall? And then I'll pop it on.
Speaker Change: You know about where we want to spend those marketing dollars and so in aggregate, yes, it will be lower but they just one comment on pricing.
Lubbe Kutur: Yeah, Alexia, we do expect, in aggregate, our marketing spend to be down. As you can imagine, if you look at our guidance, our OPEX guidance, and what that implies in terms of a year-over-year decline, we are taking pretty broad cuts across the organization. But I think when you start to dig down into specific areas of the business, specific departments, what really matters is how that spend is going to be directed. So Ethan touched on this, but it's really the mix of marketing spend and really taking a targeted approach, being very deliberate about where we want to spend those marketing dollars. And so, in aggregate, yes, it will be lower.
Speaker Change: You're right that in certain areas there will be.
Speaker Change: A more of a delta.
Speaker Change: Between animal protein ourselves, but in others they will not be.
Speaker Change: And so this is not a kind of.
Speaker Change: Crude application of the price increase.
Speaker Change: Some very important partnerships and relationships.
Speaker Change: Sure.
Speaker Change: On the product line, there won't be much change.
Speaker Change: And so and including in retail that Youll see some products, where there's really not that much change but in the aggregate.
Speaker Change: Based on the elasticity studies, we did well.
Speaker Change: We'll get a nice bump in terms of margin.
Speaker Change: While still offering the consumer.
Ethan Walden Brown: But just one comment on pricing, you know. You're right that in certain areas there will be more of a delta between animal protein and ourselves, but in others, there will not be. And so this is not a kind of crude application of a price increase. We have some very important partnerships and relationships where, depending on the product line, there won't be much. And so, including in retail, you'll see some products where there's really not that much change, but in the aggregate, based on the elasticity studies we did, we'll get a nice bump in terms of margin while still offering the consumer value for those that want it. Thank you very much.
Speaker Change: For those that want it.
Speaker Change: Great. Thank you very much I'll pass it on.
Speaker Change: Sure.
Speaker Change: The next question is from Peter Sally with BTG. Please go ahead.
Peter Thomas Galbo: Great. Thanks for taking the question.
Peter Thomas Galbo: Sounds like you guys have done a lot of work on pricing and the level of pricing and it sounds like it's a pretty meaningful change in your strategy. So I'm just curious is this.
Peter Thomas Galbo: Thinking about this as a one time price hike to kind of get you in order here.
Peter Thomas Galbo: Or is this just a real meaningful change in strategy, where you're thinking you know this will be a hike this year or maybe two hikes this year and more price hikes as we go forward just trying to understand how this strategy is really evolving on pricing and then can you just elaborate a little bit on your tiered pricing comments is this.
Alexia Howard: I'll pass it on. Sure. The next question is from Peter Saleh with BTIG. Please go ahead. Great, thanks for taking the question. Sounds like you guys have done a lot of work on pricing and the level of pricing. It sounds like it's a pretty meaningful change in your strategy.
Peter Thomas Galbo: Cheered by by distribution channel by product.
Peter Thomas Galbo: Some prices coming down or are all prices going up just trying to understand those comments. Thanks.
Peter Saleh: So I'm just curious, is this, are you thinking about this as a one-time price hike to kind of get you in order here, or is this just a real meaningful change in strategy where you're thinking, you know, this will be a hike this year or maybe two hikes this year and, you know, more price hikes as we go forward? Just trying to understand how this strategy is really evolving in terms of pricing. And then can you just elaborate a little bit on your tiered pricing comments? Is this tiered by distribution channel, by product? Are some prices coming down, or are all prices going up? Just trying to understand those comments; thanks. I don't think it's a change in the long-term strategy. I mean, if you think about, and this is something I find endlessly fascinating, but we won't dive into too much here, but just the incredible efficiency you have when you take a set of amino acids from plants versus waiting for the animal to process and develop and bacteria to turn nitrogen into protein, all that stuff, it's just more efficient.
Peter Thomas Galbo: Sure.
Speaker Change: I think it is a change in the long term strategy I mean, if you. If you think about and this is something I find it fascinating, but won't dive into too much of it.
Peter Thomas Galbo: Just the incredible efficiency when you take a set of amino acids from class versus.
Peter Thomas Galbo: Waiting for the.
Peter Thomas Galbo: Well to us to process and develop them bacteria for nitrogen in the protein.
Peter Thomas Galbo: It's just more efficient.
Peter Thomas Galbo: So there will be a day when this dramatically underprice animal protein, but that's not today.
Peter Thomas Galbo: We did achieve price parity with certain products in certain markets.
Peter Thomas Galbo: Recently.
Peter Thomas Galbo: But my.
Peter Thomas Galbo: My view.
Peter Thomas Galbo: That was not.
Peter Thomas Galbo: Certainly a global statement at all in terms of the products that we still have a big delta from most of our products.
Peter Thomas Galbo: But I will say that the pricing measures. We took I don't know they may not much difference.
Peter Thomas Galbo: There was so much noise in the category.
Ethan Walden Brown: And so there will be a day when this dramatically underprices animal protein, but that's not today. We did achieve price parity with certain products in certain markets recently, but in my view, and that was not certainly a global statement at all in terms of the products, we still have a big delta for most of our products, but I will say that the pricing measures we took, I don't know if they made that much of a difference. I think there was so much noise in the category, so much noise about the category, so much agitation outside the category with people saying negative things about the category, scaring consumers away, that pricing just wasn't as effective a tool.
Peter Thomas Galbo: It was always about the category so much agitation outside the category with people, saying negative things about the category of scaring consumers away that pricing just wasn't as effective tool in my view is we probably ended up selling them.
Peter Thomas Galbo: A lot of our products to the same consumer.
Peter Thomas Galbo: At this price. So so we learned that it moved away from it but I do think theres, a real opportunity to continue to offer us.
Peter Thomas Galbo: Ending innovation.
Peter Thomas Galbo: After a year.
Peter Thomas Galbo: It does have a more premium price on it while you continue to offer some of the rest of your portfolio at lower pricing and so I do think youll see that from us and so when we talk about tiered part of that is that type of dynamic I think the other is with particular customers and channels.
Ethan Walden Brown: And my view is that we probably ended up selling a lot of our products to the same consumer at a reduced price. So we learned from that and moved away from it. But I do think there's a real opportunity to continue to offer outstanding innovation year after year that does have a more premium price on it, while you continue to offer some of the rest of your portfolio at a lower price. And so I do think you'll see that from us. And so when we talk about tiering, part of that is that type of dynamic. I think the other is with particular customers and channels. If you think about very large strategic customers that are selling, let's say, billions of burgers a day, that type of customer price sensitivity is so important.
Peter Thomas Galbo: About very large strategic customers that are selling.
Peter Thomas Galbo: Let's say billions of burgers a day.
Peter Thomas Galbo: You know that type of customer price sensitivity is so important.
Peter Thomas Galbo: And so.
Peter Thomas Galbo: We will continue to drive those type of products two to parity as quickly as we can.
Speaker Change: I hope that helps.
Speaker Change: Yes, no. That's very helpful. And then just lastly on my end given all the changes that you guys are making do you expect this to have a material impact on the number of doors that you're in in 2024.
Ethan Walden Brown: And so we'll continue to drive those types of products to parity as quickly as we can. I hope that helps. Yeah, I know that's very helpful. And then, just lastly, on my end, given all the changes you guys are making, do you expect this to have a material impact on the number of doors that you're in in 2024? Yeah, I think it's too early to tell. I meant to say billionth serve, not to predict.
Speaker Change: Yes.
Speaker Change: Too early John I meant to say <unk> billion serve not to predict.
Speaker Change: Hi.
Speaker Change: Sure.
Speaker Change: I think it's just too early.
Speaker Change: Sure.
Speaker Change: Yes.
Speaker Change: But the one thing that I would call out in terms of.
Speaker Change: Distribution outlets as we are.
Speaker Change: We said that we are discontinuing the Cherokee product.
Speaker Change: As you know they were.
Ethan Walden Brown: I think it's huge, it's huge. Yeah, I mean, Peter, the one thing that I would call out in terms, distribution outlets is you know we are we said we are discontinuing the jerky product and as you know there were you know there was a pretty significant distribution presence related to that product you know it got us into certain channels like convenience for example where you know you look at the the rest of our portfolio it doesn't really play there and so you know certainly on the US retail side you know if you include right the impact of jerky that the those numbers should come down but you know out apart from that I think we're pretty well distributed across US retail so I wouldn't expect too much movement in in those numbers I think we would expect over time to continue to grow our presence across US food service and then it still feels like pretty early days for us in international quite honestly and so I think there's there's room for further distribution expansion in an international markets in the EU and other areas and you know even same on the International Food Service, Great, thank you very much. The next question is from Ben Theurer with Barclays. Please go ahead. Yeah, thank you very much. And I'll keep it short.
Speaker Change: There was a pretty significant distribution presence related to that product it got us into certain channels like convenience for example, where you look at the rest of our portfolio. It doesn't really play there and so certainly on the U S retail side.
Speaker Change: If you include the impact of jerky that that those numbers should come down but you know.
Speaker Change: Apart from that I think we're pretty well distributed across the U S. Retail so I wouldn't expect too much movement in those numbers I think we would expect over time to continue to grow our presence across.
Speaker Change: The us foodservice and then it still feels like pretty early days for us in international quite honestly and so I think there is there is room for further distribution expansion.
Speaker Change: In international markets in the EU and other areas.
Speaker Change: And even the same on the international foodservice side.
Speaker Change: Great. Thank you very much.
Speaker Change: The next question is from Vince <unk> with Barclays. Please go ahead.
Vince: Yes, thank you very much and I'll keep it short.
Peter Saleh: So thanks for squeezing me in, to follow up a little bit on some of the dynamics in food service and kind of the success overseas versus the declining trends in the U.S., and also wanted to bring this back to some of the partnerships over the years you've laid out with Yum! Brands, with McDonald's, and so on. So I know, Ethan, you've talked a lot about the McDonald's case over in the U.K., but what are you seeing, particularly with those food service players in the U.S. as it relates to your product and the rollout of it? Any color you can share on that would be much appreciated.
Vince: Thanks for squeezing me in.
Vince: Sure follow up a little bit on <unk>.
Vince: Some of the dynamics in foodservice and candidly the success international worse.
Vince: The declining trends in the U S and also wanted to bring this back to some of the partnerships over the years, you've laid out with Yum brands with Mcdonald's and so on so I know.
Vince: You've talked a lot about the Mcdonald's acacia over in the UK.
Vince: Are you seeing particularly with those food foodservice players in the U S. As it relates to your products into <unk> does that and any color you can share on that that would be much appreciated.
Benjamin M. Theurer: Yeah, thank you very much for the question. It's a fair one. As I've done in the past, I really need to let those partners, you know, comment on their view of the category versus, Inporters to Supplier to them; nadie aprueba entonces tomar el suelo dels emigrados. So I want to be careful on that front.
Vince: Yes.
Speaker Change: Thank you very much for the question that's fair one.
Speaker Change: You guys have done in the past I really need to.
Vince: Those partners comment on their view on the category.
Vince: Versus.
Vince: As a supplier to them.
Speaker Change: So I want to be careful on that front.
Speaker Change: I think that they look to the type of success, we're having in Europe.
Ethan Walden Brown: I think that they look at the type of success we're having in Europe and then make decisions based on what they're going to bring here, but I will say the climate here has been so, We were criticized earlier and clouded with misinformation and things of that nature that we really have to straighten that out first, get the right information out there, make sure the consumer understands the value proposition, and I think the rest will follow from there. I mean, if I could, just on this BB4 that we're rolling out, what we're trying to do here is create a question in the consumer's mind as to why wouldn't they do this, right? And, of course, if it's too pricey, that's an answer, but we don't think it'll be prohibitive in its pricing, and the health benefits are so clearly there, the support from the medical and nutrition communities is there, and, you know, the taste is there.
Speaker Change: And then make decisions based on what their spring here, but I will say the climate here has been so.
Speaker Change: I think we're politicize earlier.
Speaker Change: And clouded.
Speaker Change: This misinformation and things of that nature of that we really have to straighten that out first.
Speaker Change: You'll get the right information out there basically two of them understand that value proposition.
Speaker Change: And I think the rest will follow from there.
Speaker Change: If I could just on this before that we're rolling out.
Speaker Change: What we're trying to do here is create a question.
Speaker Change: It was mined as to why wouldn't you do this right and of course, if it's too pricey.
Speaker Change: Answer, but we don't think it'll be prohibited based pricing.
Speaker Change: And health benefits are so clearly there the support from.
Speaker Change: The medical industry and communities there.
Speaker Change: And.
Speaker Change: So.
Ethan Walden Brown: So, obviously, the environmental benefits, and I will answer your question. The ability to solve the main issue that people are wringing their hands about with climate change through a change in how we get protein to the center of the plate is absolutely phenomenal. And if you talk to people who've studied these issues, whether it's the gentleman at Yale that's in the video we did for Beyond Four, or folks at NYU, Matthew Hayek is one of them, who have studied this.
Speaker Change: And obviously environmental benefits.
Speaker Change: I will answer your question, but B b.
Speaker Change: The ability to choose all main issue that people have in their hands about with climate.
Speaker Change: Through a change in how we get protein to the center of the plate.
Speaker Change: He is absolutely phenomenal and if you talk to people who study these issues whether it's the gentlemen of Yale it's in the video we did for beyond four.
Speaker Change: Or folks at NYU.
Speaker Change: Who studied this in the use of land and biomass to bring carbon back out of the atmosphere.
Ethan Walden Brown: And the use of land and biomass to bring carbon back out of the atmosphere and cool our climate and to reduce methane emissions associated with livestock, etc., so on and so forth, it's an incredible opportunity. And so we're going to make sure that consumers understand that, that when we're talking about healing their bodies and helping them to achieve better health outcomes, we're also able to do that on the planetary side. At some point, it becomes such a powerful value proposition that the consumer does come back in. We need to take it away from politics; we need to take it away from us versus them. Farmers should be very much involved in this and making a great living doing it, not only growing our crops but potentially receiving funds from the government to sequester carbon.
Speaker Change: And cool, our climate and to reduce methane emissions associated livestock et cetera, so on and so forth.
Speaker Change: Incredible opportunity and so we're going to make sure that consumers understand that that when we're talking about healing their body and helping them to achieve better health outcomes.
Speaker Change: Also able to do that on the planetary side at some point it becomes such a powerful value proposition.
Speaker Change: Tumor does come back and we've taken away from the politics will be taken away from us versus them.
Speaker Change: Farmers should be very much involved in this and making.
Speaker Change: Living doing it not only growing our crops, but potentially receiving funds from the government to two.
Speaker Change: Just a question of carbon.
Ethan Walden Brown: And it's a real path forward for our country and for the globe. So I think we just have to get people excited about that concept again, and the rest of the industry will follow in terms of restaurants and things of that nature. But for us to apply a lot of focus on that this year is probably not the right area.
Speaker Change: And it's a real path forward for our country.
Speaker Change: So I think we just have to get people excited about that concept again.
Speaker Change: And the rest of the industry will follow.
Speaker Change: Restaurants or things of that nature, but.
Speaker Change: It's for us to apply a lot of focus on that this year is probably not the right area, let's continue to be successful with them in Europe, and then let's see what unfolds here in the U S in the future.
Ethan Walden Brown: Let's continue to be successful with them in Europe, and let's see what unfolds here in the U.S. This concludes our question and answer session. I would like to turn the conference back over to Ethan Brown for any closing remarks. Great, thank you. I would encourage folks to visit and put it in the press release with the video that we put together around Beyond 4. Again, to get a sense of the health benefits and to get a sense of the global environmental benefits. Both of them are very strong.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Ethan Brown for any closing remarks.
Ethan Walden Brown: Great. Thank you.
Ethan Walden Brown: I would encourage folks to visit it put it in the press release.
Speaker Change: With the video that we put together around beyond four.
Speaker Change: Again to get a sense of the health benefits and to get a sense of the global environmental benefits.
Speaker Change: Both of them are very strong I think both will bring.
Speaker Change: We're back to this discussion.
Speaker Change: And.
Speaker Change: Tasting is believing we're trying by type.
Speaker Change: Brand.
Speaker Change: And as folks taste this new iteration I think there'll be.
Speaker Change: There'll be quite pleased with it so.
Speaker Change: We're cautious in our optimism, obviously hasnt tough years, but.
Ethan Walden Brown: I think both will bring the consumer back to this discussion. Pasting is believing. We're trying by type and brand.
Speaker Change: But by making these changes.
Speaker Change: Creating a sustainable baseline from which we can grow.
Speaker Change: We're going to create some room for ourselves to execute them get back on track for growth. Thanks, everybody.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Ethan Walden Brown: And as folks paste this new iteration, I think they'll be... they'll be quite pleased with it. But we're cautious in our optimism. We've obviously had some tough years, but by making these changes and creating a sustainable baseline from which we can grow, we're going to create some room for ourselves to execute and get back on track for growth. Thanks, everybody. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. The Ultimate Parody Site! BF-WATCH TV 2021
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