Alternative Proteins Company Beyond Meat, Inc. has secured a 3 year supply deal with US multinational fast food restaurant franchise McDonalds.
The two companies signed a three-year global strategic agreement in late February this year to formalize the supply deal.
As part of the agreement, Beyond Meat® will be McDonald’s preferred supplier for the patty in the McPlant®, a new plant-based burger being tested in select McDonald’s markets globally.
In addition, Beyond Meat and McDonald’s will explore co-developing other plant-based menu items – like plant-based options for chicken, pork and egg – as part of McDonald’s broader McPlant platform.
The agreement will bring together McDonald’s iconic global brand with Beyond Meat’s leading expertise in plant-based protein development to create and market innovative new plant-based menu offerings.
This 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,” said Francesca DeBiase, McDonald’s Executive Vice President and Chief Supply Chain Officer.
“We’re excited to work with Beyond Meat to drive innovation in this space, and entering into this strategic agreement is an important step on our journey to bring delicious, high quality, plant-based menu items to our customers.”
Lucrative deals with fast food giants
Plant-based proteins have become increasingly popular as people preferences shift from animal protein due to a number of reasons including animal welfare and concerns about the impact of animal agriculture on the planet.
According to report published by report linker, the global plant-based protein market size is projected to grow at a compound annual growth rate (CAGR) of 7.1% from US$10.3 billion in 2020 to US$14.5 billion by 2025.
The exponential growth resulted in a number of fast food brands seeking to launch plant-based alternatives of their meat offerings.
Plant-based providers such as Beyond Meat have as a result secured lucrative deals for their meat alternatives.
Apart from the McDonald’s deal, Beyond Meat also signed another deal with Yum to co-create plant-based-protein menu items at KFC, Pizza Hut and Taco Bell over the next several years.
In January, the plant-based protein company announced it had reached a deal to make snacks and beverages with PepsiCo. Inc.
Competition from Impossible foods
Beyond Meat is however, feeling the squeeze competitively from Impossible Foods Inc., which this month announced its third double-digit price-cut in less than a year.
Impossible’s aggressive pricing could complicate Beyond Meat’s efforts to turn turn its first annual profit since its IPO in 2019.
The company posted a bigger-than-expected quarterly loss as the cost of global expansion and weak restaurant sales weighed on the business.
Excluding expenses attributed to the pandemic, Beyond lost 34 cents per share, wider than the loss of 13 cents per share expected by analysts surveyed by Refinitiv.
Net sales rose 3.5% to US$101.9 million, missing expectations of US$103.2 million.
U.S. grocery revenues climbed 76% in the quarter, although the company noted that retail demand has moderated since the early stages of the crisis.