Shares of plant-based meat company Beyond Meat (BYND -4.70%) soared on Thursday -- a day late. The company made a big announcement on Wednesday, and the stock spiked higher in pre-market trading. However, the broad market sell-off yesterday took Beyond Meat stock down with it. But with volatility dying down today, shares were able to fly, rising 13% as of 2 p.m. ET.
Beyond Meat's chicken alternative will be released at Yum! Brands' Kentucky Fried Chicken (KFC) across the country on Jan. 10, according to yesterday's official press release. Beyond Fried Chicken has been offered for a limited time at KFC before, and this release will also be for a limited time. However, this is the first time KFC is releasing the limited-time menu item to more than just a handful of locations.
KFC isn't the only restaurant chain that's partnered with Beyond Meat for a plant-based chicken alternative. Privately held Panda Express and A&W Canada have also released menu items with Beyond Fried Chicken.
Beyond Meat's partnership with KFC may not be novel, but KFC is a bigger restaurant chain than the other two. Moreover, Beyond Meat first started testing menu items with KFC in 2019. Given how much time had transpired, investors were likely starting to get skeptical about the long-term prospects of Beyond Meat's chicken platform.
This is potentially very substantial news for Beyond Meat shareholders. The company currently generates most of its revenue from beef-alternative products. And the stock trades at a very expensive valuation. Therefore, it needs to grow sales at a high rate. And increasingly diversifying its revenue away from beef-alternative products is one way to do this.
It's also a reminder that Beyond Meat does a good job of developing partnerships over time even as the market loses faith. For example, in December, Bloomberg reported that Taco Bell -- another Yum! Brands chain -- had rejected Beyond Meat, causing the stock to fall. However, a Taco Bell spokesperson subsequently told VegNews that this isn't the case; the two companies continue to co-develop menu items.
Therefore, it's possible we could see another large announcement sometime later this year as Beyond Meat and Taco Bell continue to collaborate.