Alternative Meat: Wall Street Reacts to McDonald’s P.L.T.

In a series of reactions to market forces McDonald’s is begrudgingly being drug into the chicken wars, but the more interesting of the between-two-buns skirmishes lies in the plant-based burger arena. McDonald’s has begun testing Beyond Meat’s burger patties in two dozen locations in Ontario during September of 2019.

The P.L.T. or Plant, Lettuce, Tomato sandwich is McDonalds first offering didn’t create the buzz KFC’s meatless fried chicken test did, but claimed Ontario was a good area to get a feel for demand in North America. McDonalds spokesmen where quote as saying “We want to get the taste right, we want to get the marketing right, we want to get the operations right”

Marketwatch further quoted a Bernstien analyst, “Based on our channel checks with select McDonald’s based in Ontario, Canada that are currently testing the Beyond P.L.T. burger, the initial feedback has been largely positive, although it seems that the trial has not been a blowout success thus far that justifies an immediate nationwide rollout across both Canada and the U.S.”

Wall Street reacted positively bullish on Beyond Meat sending shares up 11% higher on the McDonald’s announcement. Traders were more cautious when it came to trading MCD, noting that the trials have not been super successful so far in the Ontario trials. However, Canada hasn’t been a hotbed of demand for plant-based meats. Maple Leaf darling Tim Horton’s had a brief flirtation with Beyond Meat’s offerings only to remove them from their menu shortly after offering.

Food Analyst Brian Holland of D.A. Davidson is cautious about the implications of a McDonald’s/Beyond Meat marriage, “I would just call out two caveats to the bullish view. One if it’s a straight supply agreement, I don’t think that’s advantageous to Beyond Meat long-term — that creates volatility in their customer base because it probably implies that McDonald’s down the road might be more inclined to make their purchasing decisions on economics than brand affinity,” 

Adapting to current food trends in America McDonalds has long been ractionary to push for fast casual fresh and the perception of up scale food. Wall Street expects more leadership and perhaps innovation when it comes to new menu offerings, while a long time “safe play” in all economies MCD may need to be more than the 800lb gorilla in the fast food game to maintain its grasp.