Shares of Beyond Meat (NASDAQ:BYND) soared on Thursday morning after Taco Bell, a restaurant chain owned by Yum! Brands (NYSE:YUM), made an important announcement. Taco Bell is pursuing more vegetarian friendly menu items and it's looking to Beyond Meat for help. As of 10:15 a.m. EST, Beyond Meat stock was up 7%.
In 2020, Taco Bell cut certain menu items because of the COVID-19 pandemic. Many other restaurants did, too. With many dining rooms closed or limited, restaurant companies have struggled with how to best keep things going. Delivery and carryout sales have helped. But this puts a strain on restaurant operations, motivating many to cut menu items that weren't considered core. For Taco Bell, this meant cutting some vegetarian menu items, including potatoes.
Taco Bell's menu cuts were only intended to be temporary and indeed, the company already has a game plan for bringing them back. Taco Bell's CEO appeared in a social media video (as a potato) to announce potatoes are returning to the menu on March 11. Moreover, the restaurant chain intends to launch new menu items in collaboration with Beyond Meat.
According to CNBC, Taco Bell and Beyond Meat haven't revealed what the new menu item will be or even what the plant-based substitute is for. Management was simply quoted as saying the menu item is "going to be unique."
For Beyond Meat, this is the first new menu item at a major chain in some time. The coronavirus caused many chains to pause menu innovation, hurting growth for Beyond Meat's foodservice segment. But this news from Taco Bell is a sign things are getting back to normal.
Moreover, it's intriguing that Taco Bell says the menu item will be unique. Del Taco already has menu items using Beyond Beef Crumbles from Beyond Meat, so one would assume Taco Bell's menu item will use something different. Could we see Taco Bell launch a plant-based chicken or plant-based pork option? We'll have to wait and see.