McDonald's Launches Plant-Based Civil War Show with Burger King

McDonald's plant-based burger

Source: McDonald's

Let the plant-based burger wars begin.

McDonald's announced Thursday testing of P.L.T., a plant-based burger, in Canada. The Rival Burger King is already several steps ahead. It launched its own meatless burger nationwide in August, led by Carl & # 39; s Jr. and White Castle.

Plant-based burgers from Impossible Foods and Beyond Meat offer fast food chains the opportunity to attract different customers, including the growing population of consumers who want to reduce meat intake. Like Burger King, McDonald's will cook veggie burgers on the same grill as meat. Ninety-five percent of customers who have bought a plant-based burger have also purchased a beef burger in the past year, according to NPD Group.

Chris Finazzo, president of Burger King North America, said in August that tests of Impossible Whopper showed that it was attracting new customers to the chain. Consumers typically shop at places like Trader Joe's, Whole Foods and Panera Bread, he said.

In addition to missing out on new customers, McDonald's could lose business to restaurant chains offering plant-based burgers, says Edward Jones analyst Brian Yarbrough.

On the flip side, plant-based burgers in the United States by McDonald's could put a dent in Burger King.

"If McDonald's is finally launched in the United States, it is eating away at Burger King's first-ever benefit," Yarbrough said.

But a single test in 28 Canadian restaurants is still far from a nationwide or worldwide roll out of the PLT burger, and not all tests or offers with limited time result in fixed menu items.

Tim Hortons, the Canadian coffee chain owned by Burger King parent Restaurant Brands International, withdrew from selling Beyond & # 39; s sausages and burgers in all provinces except British Yarbrough said to Columbia & Ontario as the limited time offer .

"It makes you wonder if it really sold well or what the story was there," Yarbrough said, pointing out that Tim Hortons is also not known for burgers. [1[ads1]9659002] Morningstar analyst RJ Hottovy said that the Canadian test doesn't mean much until McDonald's announces US-focused plans for meat alternatives. He expects a plant-based burger test in the United States early next year.

Others think McDonald's will be slower to shop.

"While we are excited to see MCD consider entry into the plant-based market, at this point we are not looking for a full blown alternative beef rollout in the US in the short term, primarily for supply chain reasons," Stephens wrote analyst Will Slabaugh in a research note.

Beyond Meat CEO Ethan Brown said in June that the company has the opportunity to supply the country's largest fast food chains, as long as a wider distribution is planned.

Slabaugh wrote that he thinks a meat-free chicken product made by Tyson Foods – which owns McDonald's chicken nugget processor – is a more likely nationwide launch in 2020 or 2021. A team of Bernstein analysts led by Sara Senatore said in a research note in June that McDonald's is likely to have a more subdued impact on sales growth in the same store if it added a plant-based burger because of how much chicken it sells.

Impossible Foods vs. Beyond Meat

McDonald's meatless burger sample is also the latest development in the contest between Impossible and Beyond, which has long insisted that their only rivalry is with the meat industry.

Legacy food brands such as Nestle – the manufacturer of McDonald's veggie burgers in Germany and Israel – and the grocery store's private label brands also make their own versions of the plant-based carbonate. But Impossible and Beyond are still the two most profiled, with a number of restaurant deals between the two.

Delivery restrictions probably mean at this time that it would be impossible for either supplier to have enough capacity to sell to both chains at the same time. With 14,000 American restaurants, McDonald's has a little less than double Burger King's total US storefront.

McDonald's also has ties to Beyond. Former McDonald's CEO Don Thompson was an early investor in Beyond and sits on the company's board of directors.

If McDonald's continues with Beyond as its meatless supplier, customers could choose based on their loyalty to both brands.

Although both companies try to emulate a beef burger as realistically as possible, they use different ingredients. Impossible to use genetically modified soy and heme to mimic meat. The Food and Drug Administration recently approved the use of soy leghemoglobin – its plant-based inhibitory ingredient – as a color additive.

Beyond & # 39; s plant-based burgers primarily use pea protein, hoping to avoid controversy over genetically modified foods or soy.

Restaurant Brands International CEO Jose Cil has said that customers chose Impossible Burger over other taste test options and focus groups. Research company Mintel has found that the majority of consumers care more about taste than specific ingredients when it comes to plant-based proteins.

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