Stocks of plant-based meat maker Beyond Meat (NASDAQ:BYND) declined in morning trading Thursday after the news media belatedly learned that McDonald's (NYSE:MCD) had ended its Beyond Burger trial run in Canada. While the trial actually ended on April 6, little fanfare accompanied the event, leaving investors uncertain about the plans between the fast-food giant and its would-be supplier. After falling by nearly 9% earlier, at 1:30 p.m. EDT, shares were down by about 4.4%, while the broader markets were close to flat.
McDonald's launched a half-year Ontario trial of the PLT, or "Plant, Lettuce, and Tomato," a Beyond Burger based vegetarian burger first offered on Sept. 30. It was McDonald's first North American foray into vegetarian burgers since a failed soy-based offering almost 20 years ago. "We've been taking our time to get it right," said the fast-food chain's consumer insights lead, Michaela Charette, last year when describing how McDonald's had worked out the precise recipe for the PLT.
The vegetarian burger offering quietly disappeared from the menus of test locations at the end of its trials. Responding to inquiries, the company tweeted, "Our Plant-Based Burger was being tested in several Markets until April 6th. We have no current plans to bring it back to our menu at this time."
During Beyond Meat's May 5 earnings call, an analyst brought up the McDonald's trial and the absence of an immediate continuation or partnership. CEO Ethan Brown responded, "I can assure you, there's no issue with McDonald's. Let me put it that way."
While Beyond Meat's efforts to reduce its prices recently won investor support, Thursday's stock market reaction suggests investors are wary about the plant-based meat industry in general. Dalhousie University professor Sylvain Charlebois, a food industry expert, said predicting what Beyond Meat and McDonald's will do next is impossible, remarking that either "their courting is over, or they're planning the wedding."
Of the partnership, McDonald's Corporation said, "There has been no change in the relationship between McDonald's and Beyond Meat. We’re evaluating learnings from our recent test to inform future menu options. As we look ahead, we will plan to bring plant-based options to the menu at the right time for customers in individual markets."
Beyond Meat's founder and CEO, Ethan Brown, corroborated, saying “We feel very good about our relationship with McDonald's. The test had a start and an end as planned, and discussed during our most recent earnings call. This is not new information.”