McDonald’s expands its Beyond Meat vegan P.L.T. burger trial to 52 Canadian restaurants

McDonald’s said on Wednesday it would expand its vegan burgers trials using Beyond Meat patties to 52 restaurants in Canada, signaling a stronger push from the world’s No. 1 fast-food chain into plant-based meat options.

The move follows a Tuesday report that said Beyond Meat’s rival Impossible Foods was no longer pursuing McDonald’s as it cannot produce enough of its imitation meat to partner with the burger chain.

Beyond Meat shares closed up 12.5 per cent on Tuesday after the news.

McDonald’s said on Wednesday it would expand its vegan burgers trials using Beyond Meat patties to 52 restaurants in Canada. McDonald’s vegan burger (pictured) is called P.L.T., short for plant, lettuce and tomato, a play on the popular bacon, lettuce and tomato or BLT sandwich

McDonald’s vegan burger is called P.L.T., short for plant, lettuce and tomato, a play on the popular bacon, lettuce and tomato or BLT sandwich.

The fast-casual restaurant chain in September rolled out P.L.T.s in 28 South Western Ontario restaurants and now expands the test to 52 restaurants from January 14 for 12 weeks in the same region, including Kitchener-Waterloo, Guelph and nearby areas.

In late September, McDonald’s launched a 12-week test of a P.L.T. burger in Canada, using patties made by Beyond Meat. 

But McDonald’s has yet to offer a plant-based burger as a regular feature on its menu at any of its roughly 14,000 US outlets.

‘The P.L.T. is a craveable plant-based burger with a patty recipe that is made by McDonald’s, for McDonald’s,’ the fast-food chain said in a statement. It declined to provide any specifics on the results of the Canada test.

McDonald’s also said on Wednesday that its vegan burgers would be 50 Canadian cents cheaper at C$5.99 ($4.60), but added the price would vary by outlet.

A report from a Canadian business newspaper, Financial Post, citing a company executive, said the change in price did not have to do with customer feedback, but to see how the change would influence demand.

Swiss investment bank UBS said in December McDonald’s could sell more than 250 million P.L.T. burgers annually, if it rolled out the product across its nearly 14,000 US outlets, based on its tests that showed McDonald’s was selling nearly 100 burgers a day at some Canadian outlets.

On Tuesday, Impossible Foods said it was no longer trying to win a coveted deal to supply McDonald’s with plant-based burgers, telling Reuters it cannot produce enough of its imitation meat to partner with the world’s No. 1 fast-food chain.

It is the latest twist in the battle of imitation-meat makers hoping to convince more restaurants to offer their patties. 

Referring to McDonald’s, Impossible Foods CEO Pat Brown told Reuters in an interview that ‘it would be stupid for us to be vying for them right now … Having more big customers right now doesn’t do us any good until we scale up production’.

Impossible Foods and its rivals are duking it out over partnerships with fast-food chains to cash in on the roughly $3,500 per person average that Americans spend each year on food away from home.

The move follows a Tuesday report that said Beyond Meat's (file image, Ontario, Canada) rival Impossible Foods was no longer pursuing McDonald's as it cannot produce enough of its imitation meat to partner with the burger chain

The move follows a Tuesday report that said Beyond Meat’s (file image, Ontario, Canada) rival Impossible Foods was no longer pursuing McDonald’s as it cannot produce enough of its imitation meat to partner with the burger chain

The privately held, Silicon Valley-based Impossible Foods teamed up with Burger King last year to launch its soy-based Impossible Whopper in the US. 

Impossible Foods is now working to more than double production instead of trying to win a deal the size of McDonald’s, Brown said.

‘I wish we had vastly more capacity than we do right now because the demand is high,’ he said. 

Impossible Foods said it had previously met with McDonald’s but declined to disclose details about when it decided it would be unable to support a potential deal.

Beyond Meat told Reuters that talks with McDonald’s are going ‘very well’ and that its new and upcoming facilities around the world are guaranteed to help it keep up with demand – not just in the United States, but globally.

‘We would have to work with them (McDonald’s) on timing but, yes, we would be able to meet their demand globally,’ Beyond Meat´s chief growth officer, Chuck Muth, said last month in an interview at the Los Angeles-based company’s office.

Beyond Meat, which is valued at about $5billion after its IPO in May, weathered supply issues in 2017 and 2018, when hamburger chain A&W Canada ran out of Beyond Burgers soon after launching nationwide. 

But Muth said recently announced facilities in Canada and the Netherlands would prevent future snafus.

Beyond Meat, whose products are made with pea protein, told Reuters in November that it aims to have production up and running in Asia by the end of next year.

‘Beyond Meat doesn’t want to drop the ball while there is amazing awareness building in the market, and they need to balance that with not over-committing themselves,’ said Dan Altschuler Malek, managing partner at Beyond Meat investor Unovis Partners. 

‘The industry will continue to talk about pressure on supply for years – not because output hasn’t increased but because consumer demand continues to exceed expectations.’

McDonald’s typically works with multiple suppliers to provide components for major menu items like burgers and French fries. 

Other fast-food companies – including Yum! Brands KFC and Dunkin Brands – have tested and rolled out plant-based versions of items on their menus, made by dominant suppliers Beyond Meat or Impossible Foods.

Impossible Foods declined to comment on when it believes it might have enough supply or manufacturing capacity to partner with McDonald’s.

‘When we are ready to do it, we would certainly like them to be a customer,’ Impossible’s CEO, Brown, said. 

‘Right now, if McDonald’s said they wanted us to be in all the restaurants, we’d have to say “Sorry, we can’t do it.”‘

Impossible Foods has had capacity issues that have hurt customers in the past. 

In June, hamburger chain White Castle suffered a month-long shortage of Impossible Slider patties, for instance.

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