As the meatless burger wars heat up, the McDonald’s McPlant shows promise as sales outperformed initial projections for its first U.S. test locations.
U.S. sales of the McDonald’s McPlant burger have exceeded expectations by three-fold, the company said yesterday.
The news comes as McDonald’s plans to expand the meatless burger to 600 locations across the U.S.
According to Piper Sandler analyst Michael Lavery, the chain was selling approximately 70 burgers per location per day during its test run at eight locations. By comparison, the average number of Big Macs sold per location per day is about 110.
Next month, the leading fast-food chain will expand to locations across San Francisco and the Dallas-Fort Worth areas.
The early sales are notable, according to Lavery, even within the small sample size of the initial launch—the handful of locations in Texas and California. But the chain is optimistic about the expansion potential.
According to Lavery, the early interest could amount to big earnings for the chain and the producer of the vegan patty, Beyond Meat. His initial forecasted revenue of $75 to $100 million for Beyond Meat was upgraded after a look at sales.
“While we believe test stores likely received a lift from exclusivity (drawing some sales from nearby stores that did not offer it), and that sustainable, repeat sales will settle in at a much lower rate; initial McPlant sales could prove to be closer to 8 percent to 10 percent of burger sales, or $170 million to $215 million (annualized),” Lavery said.
The move follows McDonald’s success with the McPlant in European markets including the U.K., Sweden, Denmark, the Netherlands, and Austria.
McDonald’s saw similar success following its trial launch in the U.K., where it trialed the burgers last year. Earlier this month, following the successful soft launch, the chain said it was making the McPlant a permanent menu addition in all of its U.K. stores.
Fast-food goes meatless
McDonald’s had lagged behind its competition with its chief rival Burger King launching the Impossible Whopper in 2019. Other burger chains including Carl’s Jr., and White Castle also beat McDonald’s to market.
The race to bring meatless fast-food items to market has seen players across categories introduce items. January has become a launchpad month as it overlaps with the month-long vegan campaign Veganuary.
Other chains including Taco Bell, have taken bigger steps in offering meatless and vegan options; the Mexican-inspired fast-food chain has an entire vegan menu.
The McPlant expands to 600 more locations on February 14th. The exceptional sales news sent shares of McDonald’s stock up one percent and Beyond Meat up three percent.