After JP Morgan reported that McDonald’s concluded its test of Beyond Meat Veggie burger patties in its McPlant burger, shares of Beyond Meat plummeted 5% in morning trading, before gradually recovering to close up 1.78% at the bell.
McDonald’s confirmed to CNBC Thursday that it it had concluded the testing of the McPlant burger’s market demand with temporary offerings in 600 locations. There has been no word from either McDonald’s or Beyond Meat of any additional testing, marketing, or any nationwide launch of the product.
Beyond Meat’s shares have lost 53% so far this year, reducing its overall value down to $2.06 billion. As grocery sales have lagged, customer reticence over the product has caused Wall Street to grow skeptical over the company’s long term prospects. In addition, although it has scored big-name partnerships with companies like McDoanld’s and Pizza Hut, so far permanent deals for nationwide product sales have yet to materialize.
Starting last November, McDonald’s began offering the McPlant in eight locations to test how the item would impact food preparation operations in its restaurants. In mid-February, McDonalds began offering the McPlant burger at roughly 600 locations, to test demand in various markets.
According to reports, there was lackluster demand for the product. BTIG analyst Peter Saleh said franchisees recounted sales at and below the low end of estimates. J.P. Morgan analyst Ken Goldman wrote in a note his sources said the burger had not sold well enough to warrant inclusion on McDonald’s menu, meaning a nationwide launch of the product was in jeopardy.
Goldman wrote, “Consensus contemplates 21% growth for BYND’s total top line this year, followed by another 25% next year. These rates will not be easy to hit, in our view, without [McDonald’s] in the US.”
In early 2021, McDonald’s and Beyond Meat launched a three year partnership. The fast food giant already began offering the McPlant in some markets internationally, including Sweden, Denmark, Austria, the Netherlands and the United Kingdom. Beyond meat CEO has claimed the burgers are selling well in the U.K. and Austria.
Beyond Meat’s Q2 earnings report will be out Aug 4th, after the bell.
