The ‘McPlant’: McDonald’s enters the Plant Based Market

The plant based industry has become a billion-dollar industry, surpassing annual sales of over $5 billion in 2019. According to the Plant Based Food Association’s report, one-third of Americans are actively reducing their meat and dairy consumption. “Millennials and Gen Z make up 30 and 32 percent of the population, respectively, creating enormous market potential for plant-based foods.” McDonald’s is finally entering the plant based food industry. Last year, McDonald’s began testing its McPlant burger in Ontario, Canada. The McPlant is a plant-based version of McDonald’s beef patties and will launch in the United States soon.

CBS released an article stating that McDonald’s will test the new sandwich in select U.S. cities, although they did not say when the McPlant would officially launch. If the launch is successful, the McPlant menu may be expanded to also include chicken substitutes and breakfast sandwiches. McDonald’s officials stated that McPlant has a similar taste as its signature Big Mac and Quarter Pounder. McDonald’s is entering a competitive plant based market. Burger King launched its Impossible Whopper in 2018. The Impossible Whopper is a plant-based protein version of Burger King’s famous Whopper sandwich, made with an Impossible Foods’ burger patty. KFC and Dunkin’ Donuts have also added plant based options to their menus.

McDonald’s co-created the McPlant with Beyond Meats. Beyond Meats, founded in 2009, is a Los Angeles-based supplier of plant-based meat substitutes. McDonald’s failed to release to the media that Beyond Meats was the co-creator. Thus, when news of the McPlant burger hit the media, the shares of Beyond Meat fell by 10%. The shares mostly returned to normal once the confusion was corrected and Beyond Meats stated that they were a co-creator. It is unclear why McDonald’s refused to release this information. However, each entity seems excited for the launch and partnership. McDonald’s team stated “there are other plant-based burgers out there, but the McPlant delivers our iconic taste in a sink-your-teeth-in kind of sandwich.”

Questions:

1. Do you think it is a smart strategic move for McDonald’s to enter the plant-based market? Explain.
2. When news of the McPlant was released to the media, shares of Beyond Meats initially fell by 10%. Why do you think this occurred?

Sources: Plant Based Foods: Consumer Insight: Who is the Plant-Based Shopper?, CNBC: McDonald’s unveils its own meatless patty — the “McPlant”