What happened
Shares of Beyond Meat (BYND -7.33%) surged sharply higher Wednesday, jumping as much as 11.7%. As of 11:08 a.m. ET, the stock was still up 6%.
The catalyst that sent the maker of plant-based meat substitutes higher was word the company will begin a long-awaited test in partnership with a major fast-food chain.
So what
Taco Bell, a division of Yum! Brands (YUM -1.35%), announced Wednesday that, in partnership with Beyond Meat, the company is unveiling a "first-of-its-kind" vegetarian-friendly meat option -- Beyond Carne Asada Steak. The pair will begin testing the new plant-based protein at about 50 Taco Bell locations in Dayton, Ohio, beginning Oct. 13.
One of the most intriguing facets of this new meat substitute is that there won't be an added surcharge, making it more appealing to those on a budget. Beyond Carne Asada Steak is "crafted with simple plant-based ingredients and Taco Bell's signature spices," and has been certified vegan by the American Vegetarian Association.
Beyond Carne Asada Steak will be served in Taco Bell's quesadillas, which cost $5.19, but will also be available as a substitute protein for any other menu item.
This is the latest product to come from the collaboration between Yum! Brands and Beyond Meat, which have joined forces to create exclusive menu items for the company's quick-service restaurants, which also includes KFC and Pizza Hut. At the same time, Taco Bell has also tested several proprietary meat substitutes that were created outside the partnership.
Now what
Beyond Meat was a market darling when it debuted in early 2019, but has since fallen on hard times. Investors soon realized that in order to prosper, the company would have to convince non-vegetarians to substitute plant-based items for meat as part of their regular diet, a transition that will take some time -- if it's successful at all.
Furthermore, Beyond Meat has long believed that achieving a combination of cost parity and good taste will encourage consumers to venture beyond traditional meat products, changing their diets and including healthier alternatives. This collaboration with Taco Bell shows that it's possible to create plant-based substitutes for cost-conscious consumers, which is certainly a step in the right direction.
