- McDonald’s said it has concluded the U.S. test of its McPlant burger as planned.
- Analyst research reported lackluster demand for the meatless burger, which is made using Beyond Meat patties.
- McDonald’s sells the McPlant burger in several European markets but hasn’t announced a nationwide launch for the menu item in its home market yet.
Shares of Beyond Meat fell 6% in morning trading after J.P. Morgan said McDonald’s ended its U.S. test of the McPlant burger, which uses Beyond’s meatless patties.
The fast-food giant confirmed to CNBC Thursday that the McPlant test concluded as planned. Neither McDonald’s nor Beyond Meat has announced any plans for additional testing or a nationwide launch.
Beyond’s stock has fallen 53% this year, dragging its market value down to $2.06 billion. Wall Street has become skeptical over the company’s long-term growth opportunities as grocery sales lag. Moreover, buzzy partnerships with restaurant giants like Pizza Hut owner Yum Brands and McDonald’s haven’t progressed to many permanent nationwide menu offerings yet.
McDonald’s first tested the meat-free burger in eight restaurants in the U.S. in November to understand how the menu item would impact its kitchens. In mid-February, it rolled the McPlant out to roughly 600 locations to learn more about consumer demand for the menu item.
Analyst research reported lackluster demand for the Beyond burger. BTIG analyst Peter Saleh wrote in a June note that franchisees told him that McPlant sales were disappointing, coming in at or below the low end of projections. J.P. Morgan analyst Ken Goldman wrote in his note on Thursday that some McDonald’s restaurant employees told him that the burger didn’t sell well enough, potentially putting a nationwide launch in jeopardy.
“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,” Goldman wrote.
McDonald’s and Beyond announced a three-year partnership in early 2021. The burger chain has already started selling McPlant burgers in some international markets, including Sweden, Denmark, Austria, the Netherlands and the United Kingdom. In May, Beyond Meat CEO Ethan Brown said that the McPlant is selling well in the U.K. and Austria.
Beyond is expected to report its second-quarter earnings after the bell on Aug. 4.
Source: Business - cnbc.com
