What happened
Beyond Meat's (BYND -0.47%) stock came roaring out of the gate on Tuesday morning, gaining over 6% by 10 a.m. EDT before settling back down to a flat result by 1:15 p.m. EDT.
That compares to a slight uptick in the S&P 500. The stock remains in deeply negative territory so far in 2022 on concerns about the growth opportunity in the plant-based meat niche.
The Tuesday morning rally was sparked by news that Beyond Meat is diversifying and pushing deeper into the plant-based chicken segment through new partnerships with retailers. Its subsequent reversal hints at major challenges ahead for the business.
Image source: Getty Images.
So what
Beyond Meat announced early on Tuesday that it has struck deals with several major grocery store chains, including Kroger (KR 0.56%), to carry its Beyond Chicken Tender products. The move aims to build on its success with Beyond Meat burger patties, which have been popular with shoppers looking to reduce their meat consumption .
More shelf space for these chicken substitute products is good news as it may signal faster growth ahead for Beyond Meat and for the wider plant-based meat niche.
Now what
Beyond Meat is hungry for a marketing win, given that sales growth has slowed significantly over the last two quarters. Many consumers have lost interest in meat substitutes following surging demand in earlier phases of the pandemic. Beyond Meat's fourth-quarter sales to supermarket partners shrank 20% in the U.S. market, in fact.
Management said back in late February that demand will pick back up as the company ramps up its product-launch pace in 2022 and as consumers get more adventurous with trying out new food options.
Today's chicken tender launch is one step in that rebound strategy. But we'll have to wait until the company's next earnings report to learn whether shoppers are responding with enthusiasm to the new releases.
