Beyond Meat Signs Supply Deals With McDonald's, Yum
By Jacob Bunge
Beyond Meat Inc. said it struck deals to supply plant-based meat
imitations to McDonald's, KFC and Pizza Hut, a victory in the
company's effort to take meat alternatives into the American dining
Under separate agreements announced Thursday, California-based
Beyond said it would be the preferred supplier for a new
plant-based burger from McDonald's Corp., while helping develop new
plant-based menu items for Yum Brands Inc. chains KFC, Pizza Hut
and Taco Bell.
The deals boost Beyond's prospects as more restaurants resume
in-person dining, after Covid-19 forced shutdowns and restrictions
on eating out over the past year. The pandemic's blow to the
food-service industry hurt Beyond's business, which had been
heavily propelled by restaurants in recent years, and prompted the
company to focus more on supermarket sales.
Beyond reported Thursday a $25.1 million loss for 2020's fourth
quarter, as restaurant orders remained sluggish.
"They are the biggest deals you could possibly put together in
food," said Ethan Brown, Beyond Meat's chief executive and founder,
of the new agreements with McDonald's and Yum.
Beyond, founded in 2009, processes yellow pea protein, canola
oil, potato starch and other ingredients to produce patties and
sausages meant to mimic the taste, appearance and feel of
traditional meat. Along with competitor Impossible Foods Inc., the
companies have pitched their high-tech faux meats as an animal- and
environment-friendly option for consumers that have been more open
to "flexitarian" diets.
Fast-food chains like Burger King, White Castle and Carl's Jr.
have credited meat-free burger patties for bringing in new diners,
boosting overall checks and building buzz. Before the pandemic, the
rapid rollout of plant-based burgers at times had generated
shortages, prompting producers to invest in new manufacturing
For plant-based food makers like Beyond and Impossible, teaming
up with burger chains has represented a way to take meat-free
products beyond a health-food niche, to be sold in familiar forms
at thousands of restaurant locations across the country.
Beyond's three-year global strategic agreement with McDonald's
includes working with the burger giant on potential chicken, pork
and egg alternatives. McDonald's announced its McPlant products in
November, saying that the chain envisioned a line of plant-based
menu offerings, following an earlier test of Beyond-made
Yum's partnership with Beyond will focus on creating new menu
items that expand on the companies' earlier introductions, which
included Beyond-made fried chicken tested by KFC in 2019, and
Beyond-made toppings launched in 2020 at Pizza Hut. Mr. Brown said
that Beyond wasn't likely to generate many sales from the new
ventures until the end of 2021.
McDonald's Chief Supply Chain Officer Francesca DeBiase said
partnering with Beyond was an important step in the company's
long-term strategy to develop plant-based menu items. Chris Turner,
Yum's chief financial officer, said his company's tests with
Beyond-developed entrees had good potential to draw younger
consumers to Yum's chains.
Beyond's sales for 2020's fourth quarter increased 3.5% to $102
million, despite its U.S. food service sales dropping 43% from the
same quarter a year ago. The company's quarterly loss came in
bigger than analysts projected and grew from the third quarter of
2019, when Beyond reported a $19 million loss.
Mr. Brown said that the late-2020 surge in Covid-19 infections
added more pressure to Beyond's restaurant sales, and that
prospects now look better as coronavirus cases ease.
Write to Jacob Bunge at firstname.lastname@example.org
(END) Dow Jones Newswires
February 25, 2021 18:52 ET (23:52 GMT)
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