A national rollout of McDonald’s meatless McPlant Burger could add $200 million in sales for Beyond Meat and increase top line by as much as 35 percent, according to global financial services firm BTIG.
That forecast is based on the burger chain selling about 25 McPlant sandwiches per day, per location. That’s similar to Burger King, which sells roughly 20 Impossible Whoppers each day per restaurant.
BTIG analyst Peter Saleh said the likelihood of a national rollout in 2022 across more than 13,000 stores is “fairly high.” The analyst also noted it will be “exceptionally important” to see whether McDonald’s uses Beyond Meat’s name and logo as part of the launch, which would be a significant national advertising boost for the plant-based company.
“We expect Beyond Meat to lean on its balance sheet, investing heavily behind advertising to promote the McPlant and ensuring healthy trial,” Saleh said in his note. “Assuming McPlant launches nationally in 2022, we believe our 2022 sales forecast for Beyond Meat could prove achievable if not conservative.”
The McPlant patty includes like peas, rice, and potatoes. It's served on a sesame seed bun with tomato, lettuce, pickles, onions, mayonnaise, ketchup, mustard, and a slice of American cheese. The McPlant lineup was introduced in the fall of 2020, and a few months later Beyond Meat was selected as the preferred supplier. The item has already been introduced in various overseas markets, including Sweden, Denmark, the Netherlands, Austria, and most recently the U.K.
McDonald’s revealed earlier this month that it would start testing the product domestically in November. The pilot will go live in eight restaurants across Irving and Carrollton, Texas, Cedar Falls, Iowa, Jennings and Lake Charles, Louisiana, and El Segundo and Manhattan, Beach, California.
The burger giant said these eight restaurants will help it understand how offering plant-based patties affects kitchens. However, because patties will be cooked on the same grill, Saleh doesn’t anticipate there being too many operational obstacles. That’s why he believes the current pilot is more about testing demand than thru-put or training. He added that McDonald’s already has a testing facility in Romeoville, Illinois, to experiment with different layouts for both in-store and drive-thru.
BTIG’s revenue estimate assumed the McPlant is a quarter-pound patty and that Beyond Meat sells the product for approximately $5.91 per pound, or $1.48 per patty. Saleh said the amount of marketing behind the product will ultimately determine the initial sales pace. He expects Beyond Meat to draw down its cash position to heavily market the McPlant and ensure immediate success.
“We believe this dynamic could boost the initial sales of the McPlant, but have an adverse effect on Beyond Meat's profitability,” Saleh said.
Saleh noted that interest in adding plant-based options domestically is accelerating among fast-food operators. Burger King is one of the best examples; the chain rolled out its Impossible Whopper nationwide in 2019, and did the same for its Impossible Croissan’wich in 2020. Earlier in October, Burger King said it will start testing Impossible Nuggets.
Also, Wendy’s is piloting a plant-based Spicy Black Bean Burger and Jack in the Box said it will test the Impossible Burger patty across its menu with an additional upcharge.
“We believe that 2022 will be a pivotal year for plant-based meat in the [quick-service restaurant] segment with many brands introducing the product or increasing their offering to further differentiate themselves from competitors,” Saleh said. “In our view, many of the brands that are testing the offering will launch the product systemwide in effort to leverage national advertising to determine the true sales potential of the products.”