An expanded deal with Dunkin', a leading baked goods and coffee chain owned by Dunkin' Brands (NASDAQ:DNKN) and formerly known as Dunkin' Donuts, is the latest in a string of victories for plant-based meat substitute company Beyond Meat (NASDAQ:BYND).
Following a successful market test of a meat-alternative breakfast sandwich in Manhattan Dunkin' locations in July, Dunkin' Brands announced this week it would be accelerating the schedule for the release of the sandwich to over 9,000 Dunkin' locations. Sales of the breakfast sandwich doubled company expectations during the limited trial at 163 locations.
Here are the details investors in both companies and those looking to invest should be aware of.
The successful breakfast sandwich deal with Dunkin'
As mentioned, tests of the meat-alternative breakfast sandwich far exceeded what Dunkin' Brands expected. Specific sales numbers were not made public, but the company did say the sandwich was the No. 2 best-selling sandwich in the trial locations. In response, the company announced a change to the original nationwide launch date, from January 2020 to Nov. 6 of this year. While not directly mentioned, this looks to be a rollout to all U.S. Dunkin' locations. According to the company's website, it has over 8,500 domestic locations, which would be covered by the 9,000 restaurants mentioned in the company's press release.
Priced at $4.29 during the Manhattan trial, the sandwich contains 470 calories, 24 grams of fat, and 24 grams of plant-based proteins. The meat version of the same sandwich has 550 calories, 34 grams of fat, and 22 grams of protein. If the taste is comparable, calorie- and health-conscious breakfast shoppers might be attracted to this sandwich. Full nutrition reflects 80 fewer calories, 29% less total fat, lower cholesterol, lower sodium, and 33% less saturated fat.
The lower-calorie, healthier traits of this sandwich are important, as it's not the case with all meat-alternative releases. Burger King, owned by Restaurant Brands International (NYSE:QSR), tested a partnership earlier this year with Impossible Foods and the Impossible Whopper. The plant-based alternative Whopper had 630 calories, 34 grams of fat, 11 grams of saturated fat, 1,240 milligrams of sodium, and 25 grams of protein. Its meat counterpart had 660 calories, 40 grams of fat, 12 grams of saturated fat, 980 milligrams of sodium, and 28 grams of protein. While there was a small decrease in total fat content, those opting for the Impossible Whopper would only see 30 fewer calories, 1 fewer gram of saturated fat, less protein, and 26% more sodium. Health-conscious eaters not concerned about eating meat might not be as tempted to make the switch. In August, following the test run, Burger King announced the availability of the Impossible Whopper at 7,000 locations in the U.S.
A growing streak of wins for Beyond Meat products in the fast-food market
The successful market test and nationwide partnership between Beyond Meat and Dunkin' Brands is not the first win for the meat-alternative brand. Beyond Meat has found a steady place in the news recently, with its products earning spots in many popular fast-food and restaurant establishments. Current restaurants offering a Beyond Meat product include:
- Carl's Jr., a subsidiary of CKE Restaurants
- Del Taco
- Dunkin' (as of Nov. 6)
- TGI Fridays
- Veggie Grill
The most notable recent news for the company is a test of the product with McDonald's (NYSE:MCD). At the end of September, McDonald's began a 12-week test in select Canadian locations of the P.L.T. (plant, lettuce, tomato), a play on the B.L.T. The trial will conclude Dec. 23, though results may not be made public immediately.
While there are concerns McDonald's customers are not interested in healthy alternatives, the test should still be monitored closely by investors of both companies. Beyond Meat's stock jumped 11% just on the announcement of the test between the two companies. You can begin to guess what might happen to the stock if the tests are successful, and Beyond Meat earns a permanent spot on the McDonald's menu.
Dunkin' Brands will report earnings on Oct. 31. Investors should look for more information on specific expectations for the new breakfast sandwich. Beyond Meat is scheduled to report earnings on Oct. 28, a few days before Dunkin' Brands. Investors should look for expectations with the Dunkin' Brands partnership, any information on the success or failure of the McDonald's test, and what other restaurants might be on the docket for potential partnerships.