Beyond Meat has been a big hit on Wall Street lately, and you can credit a new agreement with McDonald's as the reason for its newest surge. McDonald's revealed it will be utilizing Beyond Meat in a new plant-based burger in 28 of its restaurants. The restaurants will be located in Southwestern Ontario and it will start being offered at those locations on September 30th. As for the name of the burger, that will be the P.L.T., which stands for Plant, Lettuce, and Tomato. The news kicked off a new surge in Beyond Meat's shares, rising by 13% with the news, while McDonald's also rose, though not nearly as high (via Yahoo! Finance).
The new campaign makes sense in a number of ways. The success of Burger King's Impossible Burger shows there is a market for it, as many on specialized diets or just looking for healthier options still want fast food without throwing themselves off for a week thanks to a standard burger or sandwich.
It also makes sense because former McDonald's CEO Don Thompson sits on the board of Beyond Meats, but as the report notes, the market opportunity is the real motivation, and it is surprising that McDonald's didn't start moving this way sooner.
So far this is only an agreement to try out the products and in a limited set of locations, and some Wall Street analysts don't see this as something people should get overly excited about.
“I would just call out two caveats to the bullish view. One if it’s a straight supply agreement, I don’t think that’s advantageous to Beyond Meat long-term — that creates volatility in their customer base because it probably implies that McDonald’s down the road might be more inclined to make their purchasing decisions on economics than brand affinity,” said D.A. Davidson food analyst Brian Holland.
Holland also cites other competition to Beyond Meat. “Nestle makes a vegan sandwich for McDonald’s in Germany and Israel as well. They are bringing a plant-based burger to the U.S. this fall. I just think there are other solutions out there," Holland said.
If you're unfamiliar with Beyond Meat, here's the official mission statement from their website.
"At Beyond Meat, we believe there is a better way to feed the planet. Our mission is to create The Future of Protein® – delicious plant-based burgers, sausage, crumbles, and more-- made directly from simple plant-based ingredients. By shifting from animal, to plant-based meat, we are creating one savory solution that solves four growing issues attributed to livestock production: human health, climate change, constraints on natural resources and animal welfare."