In a note issued Wednesday, Saleh said BTIG analysts had visited McDonald’s locations where the McPlant is being tested and gathered franchisee feedback.
According to Saleh, operators in early tests of the McPlant in eight locations (starting late 2021) were selling about 70 plant-based burgers per day, triggering a wider rollout to 600 locations starting mid-February.
However, recent channel checks indicate that operators have been selling around 20 McPlant burgers a day in Dallas and San Francisco, and just three to five burgers a day in some rural areas in East Texas, he claimed.
“These figures don’t leave franchisees outside the test markets clamoring for the product and are not enough to warrant a national rollout.”
“The market tests in North Texas and the San Francisco Bay Area are a little more than halfway through their six- to eight-week LTO [limited time offer] schedule, and franchisee sentiment on the sales performance was underwhelming….”
‘We expect both McDonald’s and Beyond Meat to continue to tweak the product and messaging’
The product “seemed to appeal more to female customers in more affluent communities,” claimed Saleh, who added: “In our view, for McPlant to be more ubiquitous, the price point needs to be more competitive with traditional burgers, and the health and climate benefits need to have greater emphasis.
“[McDonald’s] may continue to test and even offer McPlant in higher-income, urban markets that appear more receptive to plant-based meat offerings, but a wide-scale launch seems a ways off at this point.
“We expect both McDonald’s and Beyond Meat to continue to tweak the product and messaging to drive broader acceptance.”
McDonald’s and Beyond Meat did not respond to a request for comment on the McPlant’s US trial, which is being watched closely by analysts as the debate over the addressable market for meat alternatives - and Beyond Meat’s potential - heats up.
Speaking on the firm’s Q4 earnings call in late February, Beyond Meat CEO Ethan Brown noted that McDonald’s has rolled out the McPlant burger to “every [McDonald’s] restaurant across the UK and Ireland, nearly 1,500 stores,” while Beyond Italian Sausage Crumbles are now on the permanent menu nationwide at over 450 Pizza Hut Canada locations.
Beyond Chicken is also being tested in several thousand KFC outlets, said the company, which - as of Dec 31, 2021 - had a presence in 38,000 foodservice outlets in the US and 28,000 foodservice locations overseas.
Beyond Meat Q4 results: US retail down, US foodservice up…
Beyond Meat, which has just launched a plant-based jerky product with PepsiCo, has experienced a sharp slowdown in sales in the US retail market, with sales in the three months to Dec 31, 2021, down -19.5% YoY. However, sales in foodservice outlets in the US rose 34.7% to $20.6m over the same period, with international foodservice sales up 36% to $15.7m.
For the full year (2021), Beyond Meat posted a $183.1m net loss on net revenues up 14.2% to $464.7m, but predicted stronger growth in 2022, with net revenues in the $560-620m range (+21-33% vs 2021).
US retail sales of frozen meat alternatives dipped -1.7% to $722.8m in the year to February 27, while sales of refrigerated meat alternatives fell -3.9% to $475m over the same period, according to IRI data crunched by 210 Analytics.
Cumulatively, the two segments - at $1.198bn in sales - accounted for 1.2% of the overall meat, chicken, and seafood market by value, and 0.7% by volume, highlighting the mountain alt meat players must climb to make a dent in the conventional market.
Volume sales (lbs sold) fell more sharply than dollar sales, with pounds sold of frozen meat alternatives down -8.1%, and pounds of refrigerated meat alternatives declining -4.6% over the same period (52 weeks to Feb 27, 2022).
Sales of conventional meat also dropped over the same period, with dollar sales down -1.7% to $17bn for frozen meat, and down -1.1% to $83.2bn for refrigerated meat. Volumes were down -8.7% for frozen meat, and -7.4% for refrigerated meat.
On a two-year basis, however, while volumes of meat alternatives were up double digits (frozen +14.1%, refrigerated +57.4%), volumes of conventional meat, which dwarf those in alt-meat, were also up solidly off a far larger base, with frozen meat in particular seeing a huge surge in volumes (+18.1%), and refrigerated meat up +3.2%.
