Beyond Meat fast food tie-up with McDonald’s and Yum! Brands accelerates plant-based menu offerings
26 Feb 2021 --- Beyond Meat has struck two high-profile deals with fast food giants McDonald’s and Yum! Brands, the corporation that operates KFC, Pizza Hut and Taco Bell. The moves will see plant-based products proliferating fast food menus as the tie-up accelerates the co-development of chicken, pork and egg products as part of a plant-based platform.
These mega partnerships are hailed as a “new chapter for plant-based meat” by Good Food Institute executive director Bruce Friedrich.
At the same time, Beyond Meat’s CEO, Ethan Brown, calls this moment a “tipping point” in terms of plant-based meat’s cultural relevance.
Simultaneously, Beyond Meat posted a larger-than-expected quarterly loss, partly due to weakened restaurant sales because of COVID-19’s impact on the foodservice sector.
Disappointing earnings report
Beyond Meat’s net revenues were US$101.9 million, an increase of 3.5 percent year-over-year. However, the net loss was US$25.1 million, or US$0.40 per common share.
KFC was the first national US quick-service restaurant to introduce plant-based chicken when it tested Beyond Fried Chicken. (Credit: KFC)The adjusted net loss was US$21.4 million, or US$0.34 per common share, reflecting the exclusion of expenses attributable to COVID-19.
“With these two deals, the world’s largest restaurant chains are placing plant-based meat directly on the plates of millions of customers around the world,” Friedrich tells FoodIngredientsFirst.
“McDonald’s and Yum! Brands have doubled down on plant-based meat and have demonstrated the long-term potential they see in the category. This is the clearest sign yet that the future of meat will be plant-based.”
With more restaurants and revenue than any other food chains on the planet, McDonald’s and Yum Brands will bring plant-based meat onto the mainstream menus of millions of people, he adds.
“When these restaurant chains move, the entire food industry takes notice. These agreements will reverberate throughout the global supply chain and send a strong signal for the future of plant-based meat in restaurants,” says Friedrich.
Investing in choice
This agreement announcement further solidifies the relationship between McDonald’s and Beyond Meat, which began in 2019 with the Canadian test of a sandwich made with Beyond Meat’s plant-based patty.
“Our new McPlant platform is all about giving customers more choices when they visit McDonald’s,” says Francesca DeBiase, McDonald’s executive vice president and chief supply chain officer.
“Entering into this strategic agreement is an important step on our journey to bring high-quality, plant-based menu items to our customers.”
“We will combine the power of Beyond Meat’s rapid and relentless approach to innovation with the strength of McDonald’s global brand to introduce craveable, new plant-based menu items that consumers will love,” adds Brown.
Meanwhile, Yum! Brands expects to leverage their research and development capabilities to meet the evolving tastes of health-conscious consumers looking for plant-based options that are better for the planet.
Beyond Meat’s strategic partnership with Yum! Brands is also expanding the companies’ growing track record of collaborations to offer sustainable plant-based products.
Expanding in quickservice
KFC was the first national US quick-service restaurant (QSR) to introduce plant-based chicken when it tested Beyond Fried Chicken at an Atlanta-area restaurant in 2019.
Since the initial rollout, KFC has expanded testing of Beyond Fried Chicken in other US cities.
McPlant by McDonald’s. (Credit: McDonald’s)Last April, following its foray into expanded protein options for foodservice and retail customers, agri-food supplier Cargill partnered with fast food conglomerate Yum China to launch plant-based KFC fried chicken across China. The meat-free chicken substitute was tested in Shanghai, Guangzhou and Shenzhen.
Last year, Pizza Hut US also launched the Beyond Italian Sausage Pizza and the Great Beyond Pizza nationwide, becoming the first national pizza chain to introduce a plant-based meat pizza coast-to-coast.
Through this collaboration, Yum! Brands will build on their food innovation pipeline and create new consumer markets for industry-defining items and increase the number of plant-based options that appeal to flexitarians – consumers looking to incorporate meat alternatives or more diverse protein options into their diets.
“This builds on our strong relationship with Beyond Meat and – given the consumer response during recent tests with Beyond Meat – we’re excited about the long-term potential plant-based protein menu items have to attract more customers to our brands, especially younger consumers,” says Chris Turner, Yum! Brands CFO.
“We expect this Beyond Meat partnership to strengthen our brands’ capability to offer plant-based menu items that are driven by consumer demand for more diverse protein options and our brands’ strategies in local markets.”
Terms of the global strategic partnership are subject to mutually agreeable definitive agreements.
From strength to strength
The adoption of plant-based meat is gaining traction globally, mainly driven by consumers’ environmental concerns, as evidenced by one of Innova Market Insights’ Top Trends for 2020, “Plant-Forward.”
Even in the midst of a global crisis, more people are turning to plant-based foods, which is pushing up demand for alternative plant proteins to feed the world’s ballooning population.
“Progress happens when the more sustainable choice is the default choice. This agreement between Beyond Meat, McDonald’s, and Yum! Brands get plant-based meats a giant step closer to becoming standard fare and the default choice,” concludes Friedrich.
Update on COVID-19 & 2021 outlook
Due to the COVID-19 pandemic, Beyond Meat continues to significantly reduce demand in its foodservice channel as decreased foot traffic, streamlined menu offerings and restrictions on foodservice locations’ operating capacity have resulted in closures or meaningfully curtailed operations of many of its foodservice customers.
Simultaneously, the surge in demand from retail customers that characterized the early stages of the pandemic as consumers abruptly shifted toward more at-home consumption has moderated, the company notes.
Given that the ongoing evolution of consumer demand patterns across retail and foodservice channels has significantly increased the difficulty in forecasting the company’s customer demand levels, management says it will not provide 2021 guidance until further notice.
By Gaynor Selby
