Beyond Meat Faces Doubts Over McDonald’s Collaboration

Kristin Snyder

Kristin Snyder is dot.LA's 2022/23 Editorial Fellow. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.

Beyond Meat Faces Doubts Over McDonald’s Collaboration
Photo by Visual Karsa on Unsplash

Beyond Meat’s high-profile collaboration with McDonald’s is not meeting expectations, with underwhelming sales of the plant-based McPlant burger triggering concerns from Wall Street analysts.

On Monday, analysts at investment bank Piper Sandler downgraded the El Segundo-based food tech company to an underweight rating, sending Beyond Meat’s stock down more than 5% before the opening bell. Shares subsequently rallied to close the day up 1%, at $49.14 per share.


The downgrade came on the back of a tepid report on the McPlant’s rollout last week by analysts at another investment bank, BTIG, who described the burger’s sales performance as “underwhelming” after examining sales at 600 McDonald’s locations across the Bay Area and Dallas-Fort Worth region. According to BTIG, McDonald’s franchisees reported that “they don’t see enough evidence to support a national rollout [of the McPlant] in the near future”—with its lower sales volumes consequently “slowing down service times, as the product was being cooked to order.”

The analysts noted that while McDonald’s was expecting to sell 40 to 60 of the plant-based patties each day, its locations in the Bay Area and Dallas Fort-Worth were only selling 20 per day. Sales at rural East Texas franchises were even more anemic, numbering between three and five sandwiches per day. While remaining open to the product’s viability in “higher income, urban markets,” BTIG said “a wide-scale launch [of the McPlant] seems a ways off at this point.”

The McPlant’s disappointing sales follow Beyond Meat’s recent struggle to find its financial footing. Despite the plant-based food industry in the U.S. surpassing $7.4 billion in market value, Beyond Meat’s shares have fallen roughly 69% since June 2021, with the company posting net losses exceeding $182 million last year (including $80 million in the fourth quarter alone). While the McPlant has underwhelmed thus far, plant-based burgers at large continue to grow in viability, with U.S. sales totalling $1.4 billion last year—representing 1.4% of total meat market share.

Besides its partnership with McDonald’s, Beyond Meat has also teamed with fast food conglomerate Yum Brands to offer plant-based alternatives at KFC and Pizza Hut restaurants.

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Decerry Donato

Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.

LA Tech ‘Moves’: Mapp Gains New CPO and CTO, Prodoscore Taps Boeing Exec
LA Tech ‘Moves’:

“Moves,” our roundup of job changes in L.A. tech, is presented by Interchange.LA, dot.LA's recruiting and career platform connecting Southern California's most exciting companies with top tech talent. Create a free Interchange.LA profile here—and if you're looking for ways to supercharge your recruiting efforts, find out more about Interchange.LA's white-glove recruiting service by emailing Sharmineh O’Farrill Lewis (sharmineh@dot.la). Please send job changes and personnel moves to moves@dot.la.

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Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.

Raises
Image by Joshua Letona

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Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.

Gitai Secures $30 Million in Funding to Continue Space Robotics Developments
\u200bPhoto: Gitai

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