McDonald's to test Beyond Meat burger, plant-based company's stock surges
McDonald’s will test a new plant-based burger from Beyond Meat in 28 restaurants in Southwestern Ontario on Sept. 30, according to Reuters. The burger has a clever name: the P.L.T. (plant, lettuce and tomato).
Spokespeople for McDonald’s and Beyond Meat didn’t immediately return Yahoo Finance’s request for comment.
Beyond Meat shares exploded 13% in pre-market trading on Thursday. McDonald’s rose slightly.
Investors have long expected a tie-up for the two companies, which could bring a good bit of sales to both outfits.
Remember, Beyond Meat counts former McDonald’s CEO Don Thompson as a board member. Meanwhile, consumer interest in plant-based foods continues to surge — so it’s bizarre it has taken McDonald’s so long to launch a test with Beyond Meat.
Wall Street is cautious
Now Wall Street could speculate even more about a larger tie-up between the two companies. A deal would likely be bigger news for the upstart Beyond Meat, even though some on Wall Street advise caution on that line of thinking.
“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, who initiated coverage on Beyond Meat’s stock with a Sell rating several weeks ago due to concerns on the adoption of plant-based food by consumers, added “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.”
But for today, it’s all about the Beyond Meat solution coming to 28 McDonald’s locations.