What happened
Shares of imitation-meat maker Beyond Meat (BYND +20.70%) are getting a lift from fast-food giant McDonald's (MCD +1.21%) today, which just announced that next week, it will begin a 12-week trial run selling "a new plant-based burger called the P.L.T., which stands for Plant. Lettuce. Tomato," at 28 of its restaurants in southwestern Ontario.
Beyond Meat stock is up 10.8% as of 10:20 a.m. EDT in response to the news, and McDonald's shares are up 0.6%.
Image source: Getty Images.
So what
Which makes sense. This is a much bigger deal for Beyond Meat than it is for McDonald's, offering the potential to get Beyond Meat's meatless patties into circulation at the world's largest fast-food chain.
In the press release, McDonald's noted that the P.L.T. "is made with a Beyond Meat plant-based patty that has been crafted exclusively by McDonald's, for McDonald's," formulated to give "the iconic McDonald's taste customers have come to love from McDonald's." This suggests, too, that Beyond Meat has the ability to tailor the taste of its product to satisfy different customer desires, thus segmenting its market and permitting it to add margin to its business.
Now what
And the news could be good for McDonald's as well. Priced at $6.49 Canadian -- about $4.89 U.S. -- the new veggie burger will sell for about a $1 premium to the average price of a McDonald's Quarter Pounder with cheese, potentially building in a nice slice of profit margin for the world's biggest burger flipper.
McDonald's says it will be looking for the trial run to generate data on "customer demand and impact on restaurant operations." If all goes well, the P.L.T. could soon roll through a set of Golden Arches near you.
