Fake meat is having a moment. And now, the world’s most famous burger chain is getting in on the action – and using Canada as a test market. McDonald’s Corp. has chosen 28 restaurants in Southwestern Ontario to launch a new partnership with Beyond Meat Inc.
Starting on Monday, the fast-food giant will give a burger it’s calling the “P.L.T.” (Plant Lettuce Tomato) its global debut at locations in the city of London, Ont., and nearby towns. The 12-week trial is designed to gauge customer demand for the buzzed-about Beyond Meat product, and will help the company decide whether to roll it out more widely, though, as of yet there are no concrete plans to do so.
Canada has frequently acted as a test market for multinational companies. Social-media giants Facebook and Twitter have recently rolled out new features here before going global. Back in 2002, Procter and Gamble Co. gave the Swiffer Wet Jet a dry run here. And McDonald’s has tested menu items here before as well.
“You can get a great cross-section of cultures, incomes, languages," said Brett Donald, vice-president of strategy activation at Toronto-based consulting firm Jackman Reinvents. He added that the Southwestern Ontario area provides a favourable demographic for such pilots.
"So, a lot of multinationals will test here because it’s a barometer of what global success could look like.”
London itself has often been a test bed for products, including the Tim Hortons dark roast coffee and the Chicken McNugget.
Consumers are being encouraged to eat more plant-based foods, both for their own health and to mitigate the toll that meat production takes on the environment. In May, analysts at Barclays predicted the global market for alternative meat could grow to US$140-billion over the next 10 years, up from US$14-billion today. Fast-food chains and grocery stores are selling alternatives that some say are tastier and more meat-like than substitutes of the past. Investors have responded, sending shares in Beyond Meat Inc. from their US$25 debut price in May to more than US$150.
“There is a growing demand, globally, for plant-based products,” said Michaela Charette, head of consumer insights at McDonald’s Canada.
Beyond Meat shares spiked 11.58 per cent to a Thursday close of US$154.34 after news of the test became public on Thursday. McDonald’s represents a mammoth potential market for Beyond Meat, with approximately 38,000 restaurants in 100 countries.
However, some have argued that the stock price overestimates the potential of the meatless-meat market, which still represents a small niche. Aswath Damodaran, a professor at New York University’s Stern School of Business who teaches about valuation, recently wrote an analysis of Beyond Meat arguing the fair value for the stock is around US$47 a share – more than US$100 lower than its current trading value.
A number of McDonald’s competitors have already introduced new plant-based products to their menus. Beyond Meat has had partnerships with chains such as Subway and KFC. In Canada, A&W initially sold out of its Beyond Meat burgers when it introduced them last July. Burger King has partnered with another company, Impossible Foods, to create a meatless version of the Whopper.
Fake meat products are also popping up on grocery store shelves and major companies are eyeing the competitive opportunity: Maple Leaf Foods Inc., Tyson Foods Inc., Nestlé S.A. and Kellogg Co. have all invested in producing more meat alternatives.
McDonald’s sells veggie burgers elsewhere in the world, including Britain, United Arab Emirates, Germany, Finland and Sweden. It also sold one in Canada before, launching the McVeggie Deluxe in 2002. Its patty was made with soy protein, and it had a different bun and different ingredients than the new sandwich. After sales lagged, the McVeggie was pulled from menus in Canada in 2005.
Beyond Meat says that its un-burger recipe – which includes pea protein, beet juice, canola oil, refined coconut oil, and rice protein – more convincingly mimics the taste and texture of a beef burger than veggie burgers of the past did.
The sandwich is not strictly vegetarian: Like veggie burgers at many fast-food chains, it will be grilled on the same surface as burgers containing meat.
The phrase “plant-based” gives such products a health halo, which helps to market them to consumers hoping to incorporate more vegetables into their diets. But while plant-based burgers can help consumers cut down on meat, questions have been raised about how healthy they are. Faux-meat patties are still processed foods, and get their flavour from a not-insignificant portion of fat and salt.
Over all, the P.L.T. sandwich contains 920 milligrams of sodium, 11 grams of sugars and 25 g of fat, of which 7 g is saturated fat. That’s less sodium and less saturated fat than the Quarter Pounder with Cheese, to pick one example, but more sugar and about the same overall fat: The Quarter Pounder with Cheese has 1080 mg of sodium, 9 g sugars and 26 g of fat, of which half is saturated fat.
Health Canada’s guidelines for the daily intake of sodium is 1,500 mg for adults aged 14-50, 1,300 mg for those between 51-70, and 1,200 mg for those older than that. The department does not have a recommended daily intake of sugar, but says 100 g of total sugars, from sources such as fruits, vegetables and plain milk, are consistent with a healthy eating pattern. Additionally, Health Canada says the amount of saturated fat consumed on a daily basis should be as low as possible.
McDonald’s will be watching its Canadian test closely as it considers whether more meatless options could drive traffic to its restaurants.
“Our menu is always evolving to meet the taste of our consumers,” Ms. Charette said.
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