5 reasons McDonald’s Beyond Meat test is big

RB’s The Bottom Line takes a look at the giant’s surprising announcement of a plant-based burger test in Canada, and what it means for the company and plant-based products in general.
Photograph courtesy of McDonald's Corp.

The Bottom Line

On Thursday, McDonald’s somewhat surprisingly announced a small test of a burger made with Beyond Meat at a handful of locations in Canada.

It’s not the first plant-based burger in the McDonald’s system, but it still represents something of a shift for the Chicago-based burger giant, which has thus far been content with letting rivals such as Burger King, White Castle, Carl’s Jr. and Subway test out the trend.

As such, there are several interesting points about this Canada test that are worth noting, especially for those who believe the plant-based trend can change the fast-food business:

It’s not a U.S. test, but …

The test is in Canada, at 28 locations. Canada is, last I checked, not the U.S. They are different markets operated by different business units. Canada has many products unique to its market. There’s no indication this would be different.

Just because they offer it north of the border does not mean they will offer it in the U.S.

But it’s as close as you can get to this country without actually being here—the locations are in Southwestern Ontario, after all.

Don’t think for a moment that McDonald’s U.S. division, not to mention top company executives, aren’t paying close attention to this particular test. If it works in Ontario, it’s not much of a stretch (indeed, it’s just a bridge) to start testing it in Detroit.

The test is a surprise

It’s not necessarily surprising that McDonald’s would test a plant-based burger in an international market—the chain has one on the permanent menu in Germany.

But it had been content with waiting this out, arguing at one point that it wanted to see if the trend was “sustaining” before jumping in.

In addition, as we’ve said before, we guessed the company would be more likely to do something with Nestle or Tyson—larger, existing suppliers—than one of the new companies making faux meat.

Few people in the system that we’ve spoken with expected something like this so soon after the trend took off, and they didn’t expect it with one of the newer companies.

Beyond Meat isn’t in the name

This is the most interesting part of the test. The burger is called the P.L.T., or “Plant, Lettuce and Tomato.”

The word “Beyond” isn’t in the name.

That’s a big difference. In the vast majority of cases, and certainly where fast-food chains are involved, the companies have used either Beyond’s or Impossible’s brand name as part of the menu item, taking advantage of co-branding opportunities.

That includes Tim Hortons in Canada, which used Beyond in the names of breakfast sandwiches and burgers it sold in the country, though that brand has pulled back on some of its products.

McDonald’s is keeping the name to itself, a clear play on the “BLT” bacon-topped burgers and chicken sandwiches the brand serves in the country.

That means the company is not beholden to any one provider of plant-based meat. It also can help the company determine whether a plant-based product can stand on its own without the benefit of that branding.

That’s a better long-term possibility for any plant-based burger. McDonald’s would likely prefer not to rely on its supplier’s brand name for the product’s success.

It’s not vegan

As Business Insider pointed out, the burger is not vegan, because it will be made on the same grills as regular patties. That’s actually a good thing for people who want McDonald’s to start serving something like this.

Only 3% of the U.S. adult population is vegan. While that’s about 9 million people, that’s not much, and many of those probably don’t want to go to McDonald’s, anyway. It’s certainly not a market big enough to fret about.

Whether the burger qualifies as vegan is important because it’s a potential sticking point for whether the company actually serves it. If McDonald’s was determined to make the burger vegan-friendly, it would have to devote grill space to the product.

McDonald’s would have to be convinced it’d sell a lot of those fake-meat burgers to do such a thing, because devoting grill space to the burger would be operationally difficult.

This is a potentially big endorsement for a plant-based future

This is just a test, and it might go down in flames. And I personally remain unconvinced that this is a long-term trend, rather than a short-term fad. But McDonald’s is tossing the single biggest mainstream name in the restaurant business into the plant-based ring.

That has to mean something. It suggests McDonald’s sees enough in this trend to warrant such an effort when just a few months ago executives were preaching caution and patience.

Not surprisingly, Beyond Meat’s stock soared Thursday after the announcement, rising nearly 12%.

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