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Beyond Meat patties are displayed for sale in New York on Nov. 15, 2019.ANGELA WEISS/AFP/Getty Images

Plant-based meat maker Beyond Meat Inc said on Thursday that it has signed multi-year supply deals with McDonald’s Corp and Yum! Brands Inc , sending shares up 18 per cent in after-hours trading before they dropped back to a gain of 1 per cent.

Shares pared earlier gains as the company reported quarterly sales and a loss that widely missed analyst expectations.

The plant-based meat industry has developed a frenzied following in recent years, and companies like Beyond Meat and rival Impossible Foods are among top players competing aggressively for deals with major food chains to build on this momentum. A deal with McDonald’s, in particular, is highly coveted in the industry.

Beyond Meat said its three-year global deal with McDonald’s would make it the world’s biggest restaurant chain’s preferred supplier for the patty in its new McPlant burger. The two companies will also develop other menu items like plant-based chicken, pork and eggs.

The maker of the Beyond Burger said it plans to create products over the next several years with Yum! Brands for its KFC, Pizza Hut and Taco Bell menus.

Beyond Meat’s statements did not specify if the deals are exclusive, meaning that Impossible Foods and other rivals may still have a shot at working with the two fast-food chains.

Beyond Meat reported an increase in net sales of 3.5 per cent to $101.9 million in the period ended Dec. 31, short of analysts’ forecast of $104.8 million, according to Refinitiv IBES data.

Sales over the last two quarters have been hurt by diners on lockdown visiting fewer restaurants, eating into food service sales of Beyond Meat’s burgers, meatballs and sausages.

The company booked $3.7 million in COVID-19 expenses as it had to write off inventory associated with foodservice products determined to be unsalable.

The El Segundo, California-based company’s loss widened to $25.1 million, or 40 cents per share, from $452,000, or 1 cent per share. Excluding items, Beyond Meat’s loss was 34 cents per share, handily missing analysts’ estimate of 13 cents per share.

“Although weakened foodservice demand resulting from the global pandemic has impacted our near-term profitability, we continue to press forward with strategic investments,” Beyond Meat Chief Executive Ethan Brown said.

The company did not update its suspended outlook, saying the impact of COVID-19 made it difficult to forecast demand.

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