In January, Impossible Foods dropped out from pursuing a partnership with McDonald's because it was incapable of meeting the wider demand. Now, less than two months later, Beyond Meat has announced its three-year partnership with McDonald's.
Over the next three years, Beyond Meat will develop plant-based McDonald's items including chicken, pork, and eggs. Beyond Meat founder and CEO Ethan Brown announced the deal during their earnings call on February 25, alongside a parallel but independent partnership with Yum! Brands’ KFC, Pizza Hut, and Taco Bell. Beyond has worked with Yum! in the past. KFC’s Beyond Fried Chicken was already piloted in 2019, and Pizza Hut’s Beyond Pan Pizza (topped with plant-based sausage) rolled out earlier this year. Beyond tacos are close behind. The deals follow on the heels of another huge win for Beyond Meat — the first deal of its kind for a plant-based food company. In late January, the company announced a partnership with Pepsi to develop and plant-based meatless snacks.
The fast food industry has become a battleground for Beyond Meat and Impossible Foods, as they each prove their products aren’t just health foods. Back in 2018, Beyond Meat first debuted in Tim Hortons and A&W, while Impossible scored menu spots with White Castle, Little Caesars, and infamously, Burger King in the form of the “Impossible Whopper.” But McDonald's is a white whale. The chain first dabbled with plant-based meat in 2019, with a “P.L.T” (“plant, lettuce, tomato”) sandwich which it partnered with Beyond to pilot in Canada. The test ended with McDonald's announcing their “McPlant” burger but they were initially hesitant to confirm that Beyond Meats would be the patty supplier. While the word “exclusive” doesn’t appear in either of Beyond Meat’s new deals, the announcement cements the company as McDonald's go-to source.
“These deals are enormous,” Brown said per VegNews. “They are the biggest deals you could possibly put together in food in our sector.”
Numbers-wise, Beyond Meat is winning the war. The company smothers Impossible Foods in a map of the stores where they can each be purchased. Impossible Foods is currently only available in 30,000 retail and food service outlets nationwide, and a handful of countries outside the US and Canada. Meanwhile, Beyond Meat was available in roughly 122,000 stores across 80 countries.
Beyond’s decision to partner with McDonald's suggests they have the manufacturing abilities to do so. In part, they’ve been able to scale up because Beyond’s pea and soy-based recipe, which doesn’t require Impossible’s signature lab-made molecule heme, has proved legally and logistically simpler. Beyond has also been preparing for huge volumes and quick service for years.
In the last year, Beyond acquired a co-packer in Pennsylvania, a new manufacturing facility in the Netherlands, and even new facilities in China, reports FoodDive. Soon, the company will start scaling to enter many of Yum Brands’ 50,000 restaurants and McDonald's 36,000. The number of Beyond Meat’s employees listed on LinkedIn has grown over 70% in the past 12 months, outpacing Impossible Foods’ 56% increase. Meanwhile, their job listings have more than tripled.
But, despite Beyond Meat’s good news, its share price, along with its Facebook mentions, have been unstable throughout the winter as a result of mixed fourth quarter results. Also dragging the company down is the news that Chief Financial Officer Mark Nelson is moving on, plus the fact that Impossible Foods cut its beef price by 20%, making the competitor more affordable than ever. Impossible Beef is now $5.49 for two patties, and $6.99 for a 12-ounce package.
Overall, Beyond’s share price is still up 43% year-over-year, on par with the plant-based meat industry’s banner year, as the meat industry was disrupted by Covid-19. Founder of the Good Food Institute Bruce Friedrich called Beyond Meat’s McDonald's deal the “clearest sign yet that the future will be plant-based.”
“When these restaurant chains move, the entire food industry takes notice," Friedrich said. "These agreements will reverberate throughout the global supply chain and send a strong signal for the future of plant-based meat in restaurants."
The McPlant burger is currently being sold on a trial run in Denmark and Sweden, but likely won’t be in the US until the end of the year or early 2022. That gives Impossible Burgers time to lock down its own headline-making partnership, one on a scale it can actually handle.
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