What happened
In recent weeks, the stock of Beyond Meat (BYND 0.24%) has staged something of a comeback. But that was thrown into reverse on Thursday with disquieting news about an important business partner that drove its share price down by over 4% on the day.
So what
This morning, CNBC reported that Taco Bell -- the Mexican fast-food restaurant chain owned by Yum! Brands (YUM 1.05%) -- is testing a proprietary, plant-based meat substitute. This product, derived from soy and pea protein, is being sold in Taco Bell outlets in Birmingham, Alabama.
Investors were understandably concerned about this. In early 2021, Beyond Meat and Yum! Brands signed a deal to co-develop alt-meat ingredients for exclusive menu items in the latter's restaurants. In addition to Taco Bell, the company also operates the KFC and Pizza Hut brands.
Yet this isn't the first instance of Taco Bell experimenting with its own meatless solution. The Birmingham pilot program is the third test of protein alternatives for the chain. Last year, it had a pea/chickpea-based product in its Cravetarian taco, and concocted a plant-protein shell for its Naked Chalupa.
Beyond Meat has not yet responded to the CNBC report.
Now what
To badly paraphrase the old saw, once is an accident, twice is coincidence, three times is a pattern. At least, that's the impression Beyond Meat investors seem to have gotten on Thursday.
Taco Bell appears determined to be its own Beyond Meat with the alt-protein products, judging by its latest move. The news also is an uncomfortable reminder that the Yum! Brands co-development deal hasn't actually resulted in many products making their way to Taco Bell/KFC/Pizza Hut menus yet.
