PepsiCo, Beyond Meat Form Plant-Based Foods Venture
By Jacob Bunge and Jennifer Maloney
PepsiCo Inc. plans to form a joint venture with imitation-meat
maker Beyond Meat Inc. to develop snacks and drinks made from
plant-based protein, the companies said Tuesday.
PepsiCo, which makes such products as Doritos and Quaker Oats
and is a joint owner of Sabra hummus, has over the past several
years looked at different options for adding plant-based
ingredients to its lineup, including experimenting with soluble
oats as a protein in drinks. The broader market for meat
alternatives has grown rapidly, with plant-based burger patties
proliferating across fast-food drive-throughs and grocery-store
Pushing into snacks and beverages would give California-based
Beyond a broader reach into supermarkets, which have claimed a
greater share of consumers' food buying during the pandemic.
Covid-19 concerns and restrictions pushed Beyond's sales of
plant-based burgers to restaurants 41% lower in the company's most
Terms of the deal with PepsiCo weren't disclosed. The companies
declined to comment on the size of the investment in the venture. A
PepsiCo spokeswoman said it would be managed jointly by the two
Beyond's shares, which gained 65% in 2020, were up 18% Tuesday
afternoon. while PepsiCo was ahead less than 1%.
The companies didn't specify what sorts of snacks and beverages
will be developed by the new venture, called the Planet Partnership
LLC. Its products will be marketed to North American consumers, and
later could be expanded to the U.K. and China, a Beyond spokeswoman
PepsiCo currently uses some animal-based ingredients in products
like Doritos and Tostitos salsas, some of which contain cheese, and
certain Frito-Lay products contain pork-based enzymes, according to
JPMorgan Chase & Co. analysts. The company's Muscle Milk
products incorporate whey. Overall, those products represent a tiny
percentage of PepsiCo's costs, JPMorgan said.
Beyond Chief Executive Ethan Brown said that PepsiCo's marketing
and distribution heft would help propel the new venture's
plant-based products to more consumers. Beyond and other makers of
plant-based meat alternatives, such as Impossible Foods Inc., have
been working to make more inroads in supermarket meat sections over
the past year after Covid-19 infections spread through meat plants
and left some traditional meat products in short supply.
Last year, Beyond launched its pea protein-based burgers in
Walmart Inc.'s Sam's Club stores and the BJ's Wholesale Club
Holdings Inc. chain, and introduced value packs while cutting
prices. Those efforts haven't always succeeded in offsetting slower
sales to convention centers, bars and other food-service
operations, and Beyond in November reported a $19.3 million
Retail sales of plant-based snacks and beverages are a small
part of the overall market, but in most cases are growing faster
than traditional varieties, according to market research firm
Nielsen. Sales of snacks marketed as part of a plant-based diet
jumped 10.6% over the 52 weeks ended Jan. 16, Nielsen's data
showed, while plant-based beverage sales grew by 13.5%.
Write to Jacob Bunge at firstname.lastname@example.org and Jennifer Maloney
(END) Dow Jones Newswires
January 26, 2021 13:37 ET (18:37 GMT)
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