Advertisement for the McPlant burger, a vegetarian, plant-based alternative to more traditional meat burgers from fast food giant McDonalds on July 11, 2022 in London, United Kingdom.
Mike Kemp | In photos | Getty Images
Shares in Beyond Meat fell 6% in morning trading after JP Morgan said McDonald’s had ended its US test of the McPlant burger, which uses Beyond’s meatless patties.
The fast-food giant confirmed to CNBC on Thursday that McPlant’s test had ended as planned. Neither McDonald’s nor Beyond Meat has announced plans for additional testing or a nationwide rollout.
Shares of Beyond have fallen 53% this year, reducing its market value to $2.06 billion. Wall Street has grown skeptical about the company’s long-term growth prospects as grocery sales lag. Also, buzzy partnerships with restaurant giants like Pizza Hut owner Yum Brands and McDonald’s have yet to result in many permanent national menu offerings.
McDonald’s first tested the meatless burger at eight U.S. restaurants in November to find out how the menu item would affect their kitchens. In mid-February, it rolled out McPlant to approximately 600 locations to learn more about consumer demand for the menu item.
A survey of analysts reported weak demand for the Beyond burger. BTIG analyst Peter Saleh wrote in a June note that franchisees told him McPlant’s sales were disappointing, coming in at or below the low end of forecasts. JP Morgan analyst Ken Goldman wrote in a note Thursday that some McDonald’s restaurant employees told him the burger wasn’t selling well enough, potentially jeopardizing the nationwide rollout.
“Consensus calls for growth of 21% for BYND’s total top line this year, followed by another 25% next year. These levels will not be easy to achieve, in our opinion, without [McDonald’s] in the US,” Goldman wrote.
McDonald’s and Beyond announced a three-year partnership in early 2021. The burger chain has already started selling McPlant burgers in some international markets, including Sweden, Denmark, Austria, the Netherlands and the United Kingdom. In May, Beyond Meat CEO Ethan Brown said McPlant was selling well in the UK and Austria.
Beyond is expected to report second-quarter earnings after the bell on Aug. 4.
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