24 Tuesday, October 1, 2019 19:01

Why McDonald's New PLT Sandwich Isn't the Huge Win for Beyond Meat It Seems

Its a small start, but the announcement by McDonalds (NYSE:MCD) that it will be testing Beyond Meat (NASDAQ:BYND) burgers at 28 restaurants in the Province of Ontario obviously seems like a big deal for the plant-based protein producer.If the three-month trial goes well, its quite likely McDonalds will roll it out to the rest of its 1,400 restaurants in Canada, and theres a good chance that could serve as a gateway to seeing it introduced to the 14,000 restaurants in the U.

S. Thats a lot of burgers Beyond Meat would be selling.But this may be a case of Beyond Meat getting ahead of itself. Theres good reason to think this deal with the fast-food giant wont be as expansive as it looks.
Image source: McDonalds.McDonalds is not the fit-and-trim choiceMy Motley Fool colleague Dan Kline recently argued that McDonalds new P.

L.T. (for plant, lettuce, and tomato) is doomed to failure because the fast-food chain has a poor track record of introducing new, healthy menu items. He writes: People who visit fast-food chains generally want a full-on fast-food experience. Theyre not looking for healthy options, because they already view the meal as an indulgence or an earned cheat.

Hes right. McDonalds has a history of trying to make its menu better for you, whether it was the McLean Deluxe in the early 1990s or -- when it chased millennials looking for fresher, more wholesome ingredients -- its kale bowls and lobster rolls. Diners voted with their feet, and the chain lost a half-million customers over the past few years.

I agree with Dan: Youre not going to McDonalds to get healthy food. Youre looking for a good, tasty meal at an affordable price.Not entirely a healthier alternative anywayWhich is another problem for the Beyond Burger P.L.T. It costs $6.49 Canadian, or $4.90, nearly triple the cost of a regular hamburger and even more expensive than a Big Mac.

 Theyre also not necessarily healthier by all nutritional measures, either. A P.L.T. comes with 25 grams of fat and 920 milligrams of sodium, compared with a regular McDonalds hamburgers eight grams of fat and 510 milligrams of sodium. The P.L.T. only slightly beats out a Big Mac at 28 grams of fat and 950 milligrams of sodium, respectively.

Of course, some argue that Beyond Burger and other plant-based beef alternatives dont have to be healthier, pointing to other considerations such as environmental impact. However, theres been debate historically about environmental aspects as well, with some arguing that raising cattle is good for the environment.

Capacity will constrain a wider rolloutA more practical concern for Beyond Meat is whether it would be able to actually meet the demand from over 15,000 McDonalds restaurants in North America.The maker of plant-based meat alternatives has experienced capacity constraints in the past and has had to invest heavily in more equipment to simply meet current demand.

. Its also had to find additional partners to help produce its orders.Earlier this year, it more than tripled.....

News Code: 371617  |  Motley Fool
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