It’s been a busy week for news on the plant-based meat front, and it’s only Wednesday. To wit:
Dunkin’ announced plans to introduce its Beyond Sausage Sandwich nationwide next month, just more than three months after it started testing the product in a single market.
Pizza Hut, following the example of sister company KFC, announced a limited, one-store test of a plant-based sausage topping made by Kellogg’s Morningstar Farms.
Del Taco stock plunged after its sales and profits fell despite the apparent popularity of its own Beyond Taco.
Now there’s this: Domino’s CEO Ritch Allison, speaking to reporters at the company’s Ann Arbor, Mich., headquarters, acknowledged that his chain is looking into the plant-based trend. It’s not testing a product in stores, something the company generally doesn’t do, but it’s also hard to ignore all of this interest in fake meat.
Meanwhile, McDonald’s CEO Steve Easterbrook said this week that the company is paying close attention to its 28-store test of a Beyond Meat burger, called the P.L.T., in Canada.
“We’re interested in this,” Easterbrook said. “Clearly there’s been competitive activity, which you’re aware of, which I’m sure helped create some more immediate interest or some shorter-term consumer response.”
As the flurry of activity this week indicates, restaurant chains are falling all over themselves trying to add a plant-based product to their menu. They’re conducting very public tests, even in limited, one-day events. And the strategies generate a lot of attention.
This is drawing other competitors to the mix. Pizza Hut’s introduction is notable because of who is not involved: For the most part, restaurant chains have been using the names of Beyond Meat or Impossible Foods to market their new products. The Plano, Texas-based pizza chain is using meat analogues in its own branded pizza with a product made by a traditional supplier.
That follows a decision by the chain Dave & Buster’s last week to ditch its Impossible Burger for one made by a Canadian company called Greenleaf Foods.
Those pieces of news probably contributed to a continued decline in Beyond Meat's stock price, which fell 6% on Wednesday. The stock fell below $100 per share for the first time since June. It was above $150 as recently as last month.
Another factor in the Beyond stock decline may well be Del Taco’s results.
Del Taco’s Beyond Taco was one of the most successful product launches in the company’s history, then settled into a 6% mix last quarter before declining to 4% more recently. While company executives say the performance was strong for a new product, the plant-based meat trend has clearly generated higher expectations than that.
What’s more: The product wasn’t enough to generate traffic at the chain. Its same-store sales last quarter rose just 0.4%, while average check rose 4.1%—traffic declined 3.7%. In other words, the plant-based meat trend is hardly a panacea.
Still, a far bigger test will come from Burger King, which reports earnings next week along with parent company Restaurant Brands International. The fast-food burger chain put the plant-based trend into high gear this spring when it started testing the Impossible Whopper in April and quickly moved to expand that nationwide this summer. It has been advertising the burger heavily.
By all accounts, the sandwich has drawn rave reviews and has helped generate sales and traffic. Investors will be paying a lot of attention to how much. So, too, will the chain’s competitors, including McDonald’s—which is carefully watching its own test.
“There are a number of factors that we are learning quickly, and we think Ontario is a great spot, because it will give us a good read across North America, but also into the developed markets in Europe,” Easterbrook said. “It’s an area of interest for sure.”
Pushing plant-based meat on fast-food customers has been a brilliant strategy by Impossible Foods and Beyond Meat, the two companies that helped spark the trend with their higher-quality fake-meat products aimed at traditional meat consumers.
That strategy helped change the expectations for the products, broadening their target market and putting the trend at the top of restaurant executives’ to-do list. It would have been almost laughable to think of the CEOs of Domino’s and McDonald’s talking about fake meat products just a year or two ago.
This doesn’t mean the products make sense for the chains themselves.
For the most part, fast-food consumers are more about getting convenient, low-cost meals that meet their expectations for quality. Eating healthier or changing the world tends to come secondary to those needs. So plant-based meat might not be quite the game-changer some people are expecting.
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