McDonald's Teaming Up With Beyond Meat For Plant-Based Burger Test

McDonald’s imminent test of a plant-based burger in Canada proved to be a healthy development for Beyond Meat’s investors yesterday, with the company’s stock gaining more than 11% after the news broke.

Called the P.L.T. (plant, lettuce, tomato), it’s made from pea protein, rice protein, potato starch, and more ingredients that Beyond Meat uses in its blend, Maria Yagoda reports  for Food & Wine. It “will be available at 28 restaurants in Ontario, Canada, starting September 30. The sandwich will be sold for 12 weeks at the participating Canadian locations, allowing McDonald’s to assess whether they’ll make the item widely available,” she adds.



“We know the news around plant-based burgers has driven a lot of interest -- now we want to see what that demand is,” Chris Young, McDonald’s senior director of global menu strategy, tells Yagoda. “Equally as important is, given that demand, what is the impact on our kitchens? I think it’s important to understand how those two things work together, and from that we’ll have some very interesting data.”

“Though it’s made from Beyond Meat, McDonald’s isn’t calling the sandwich vegetarian, as it’ll be cooked on the same griddle as its burgers,” Jaya Saxena points out  for Eater

“The P.L.T. doesn’t contain artificial colors, flavors or preservatives, McDonald's said. It will cost $6.49 in Canadian dollars, which equates to $4.90 U.S. dollars,” Dalvin Brown writes  for USA Today.

Speaking of dollars, “Beyond Meat’s stock, trading around $150, is now up about 500% from its initial public offering price of $25. The company debuted on Wall Street in May and has been one of the year’s splashiest IPOs. Shares have fallen more than 30% from their all-time high though as investors have recently grown more skeptical about unprofitable startups like Uber, Lyft, Slack and WeWork, which is shelving plans for an IPO until later this year,” Paul R. La Monica writes for CNN Business.

McDonald’s shares were flat, but shed no tears for its investors. CNBC’s Anna Hecht reveals tha t a $1,000 investment in McDonald’s in 2009 “would be worth more than $5,000 as of Sept. 20, 2019, for a total return of around 400%, according to CNBC calculations. In the same time frame, by comparison, the S&P 500 earned a total return of nearly 250%.”

“McDonald's is far from the first to experiment with Beyond Meat’s patty,” USA Today’s Brown observes. “Earlier this summer, Dunkin' announced a partnership with Beyond Meat to create a breakfast sandwich with fake sausage. KFC tested a ‘Fried Chicken' version of the vegan patty in August. Burger King, Del Taco, Red Robin and Qdoba Mexican Eats also offer meatless options through companies like Beyond Meat and Impossible Foods.”

But at least one analyst believes McDonald’s should focus on alternative faux chicken instead, Teresa Rivas reports for Barron's.

“Shortages of Beyond Meat have been well documented, and that could spell trouble for a big player like McDonald’s that would need a massive, steady supply. Thus, [Stephens analyst Will] Slabaugh writes that ‘an alternative chicken product (nugget, tender, sandwich) in the U.S. is a more likely nationwide launch in 2020/2021,'” Rivas writes. 

“That could have a dual benefit of moving McDonald’s away from the hottest area of the faux-meat market to a product that might have smoother sourcing, and perhaps be a way for it to finally wade into the chicken wars, without directly challenging players like Chick-fil-A.” 

Besides the issue of supply, there may be one of demand.

“Tim Hortons, the coffee-and-doughnut chain owned by Restaurant Brands Inc., introduced Beyond Meat sausage breakfast patties and burgers in Canada this summer. The chain cut back the plant-based burger offering earlier this month, saying demand was better for real beef,” Heather Haddon writes for& ;amp ;amp ;nbs p;The Wall Street Journal.

“McDonald’s has served vegetarian offerings for some time in other markets, including the McAloo Tikki, made of potatoes and peas, in India. It tested a vegetarian burger made by Nestlé SA earlier this year in Germany,” Haddon adds.

And some vegan options in other overseas markets are apparently faring quite well.

“Both Finland and Sweden offer the McVegan, a completely plant-based sandwich featuring a soy-based patty. Last February, the chain reported that the vegan burger had exceeded sales expectations in Sweden. And earlier this month, it was revealed that McDonald’s launched another vegan burger -- called the McVeggo -- at all 65 Finnish restaurants. Like the McVegan, it features a soy-based patty and is served with spicy sauce,” Kat Smith writes for LiveKindly.

As for the advertising for the McAloo Tikki, you gotta be lovin’ it.

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