McDonald’s (NYSE:MCD) announcement about its new McPlant line has spooked Beyond Meat (NASDAQ:BYND) investors. Many dumped shares in response to questions about whether the company would be supplying the plant-based patties to the fast-food chain.
McDonald's announces McPlant line
McDonald's announced its new McPlant line of meat alternative products, which will launch next year. The line-up will include plant-based burgers, chicken substitutes and breakfast sandwiches. According to the BBC, the fast-food chain already tested a plant-based burger in Canada in partnership with Beyond Meat.
McDonald's is fairly late to get into the meat substitute product market. Burger King and White Castle are two other fast-food chains that already have such products on their menus.
Beyond Meat shares plunge
Shares of Beyond Meat plunged after the announcement, falling nearly 30% in after-hours trading on Monday and continuing their descent today. According to CNBC, a JPMorgan (NYSE:JPM) analyst told Beyond Meat CEO Ethan Brown on the company's earnings call that he thought Brown was "spooking people a little bit" because he didn't provide any major details on the agreement with McDonald's for its McPlant line.
Investors appear to have been confused about whether Beyond Meat would supply the meatless products for McDonald's McPlant line. The company did supply the meatless burger patty that was used for the test conducted in Ontario.
McDonald's CEO Chris Kempczinski told CNBC in an interview that aired today that the fast-food chain has a relationship with Beyond Meat in that the company supported them in their test market. However, McDonald's apparently hasn't made a decision about which suppliers will be supporting the McPlant line-up for their global rollout.
However, a spokesperson for Beyond Meat said in a statement on Monday that the company made a meatless patty with McDonald's that will be part of the McPlant line-up. Brown told JPMorgan analyst Ken Goldman on the earnings call that McDonald's might have wanted to hold the spotlight on its investor day and that revealing Beyond Meat as its supplier could have served as a disruption of that focus.