McDonald’s McPlant burger may be inevitable, but it’s apparently not imminent.
That, at least, is based on a report from BTIG Analyst Peter Saleh, who in a note on Thursday indicated that tests of the product have underwhelmed in Dallas and San Francisco, casting doubt on the plant-based burger’s nationwide introduction in the second half of the year.
Saleh said that sales in the markets have been “disappointing,” coming in at the low end of expectations and said that the product will not be launched nationally later this year.
“The modest-to-underwhelming performance of McPlant in the two test markets … suggests broad appeal or a plant-based burger at McDonald’s isn’t there yet,” Saleh wrote.
But, he noted, operators believe McDonald’s is committed to plant-based offerings—meaning it’s not as if the McPlant is dead in the U.S.
McDonald’s did not comment, though the company is still evaluating results from its tests.
The McPlant is being closely watched for a variety of reasons—namely that McDonald’s is the world’s largest restaurant chain, and the product’s addition in its largest market would represent a massive victory for those advocating the burger giant provide a plant-based offering.
It would also represent the clearest sign yet that plant-based burgers have hit the mainstream. Wall Street, for one, has cast doubt on that idea. Beyond Meat, which is working with McDonald’s on the McPlant, has lost more than 60% of its stock value this year. Its stock price declined more than 3% Thursday on the Saleh report.
McDonald’s unveiled its McPlant burger platform in 2020. The product has been introduced in several markets, at least in tests, including Sweden, Denmark, the Netherlands, Austria and the U.K. in addition to the U.S. The McPlant was rolled out in the U.K. and Ireland in February after successful tests there.
Saleh has been correct on his McPlant predictions before. He had suggested an expanded test after a limited early test last year proved successful.
But it’s sometimes difficult for that kind of success to translate on a much broader scale and the challenge with a product like McPlant and a big chain like McDonald’s is how different consumer tastes are from one market to the other. Plant-based burgers have often done well in urban markets filled with more vegetarians and others concerned about the impact of beef on the environment. But they’ve struggled in more rural areas.
Saleh’s report mirrors those concerns. Sales in San Francisco were at the low end of the sales projection of 125 to 300 sandwiches per week. But in the Dallas-Fort Worth market, the restaurants sold only about 13 of the burgers a day. “Demand was practically non-existent in more rural East Texas at a few sandwiches per day,” he wrote.
Views of the McPlant have been on something of a roller-coaster ride. Saleh wrote in March that the product was disappointing, but the product in January was expanded to 600 locations after the early eight-store test apparently did well enough to warrant more attention.
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