Beyond Meat shakes up the plant-based chicken tender market
Beyond meat will sell its new plant-based chicken tenders at nearly 400 U.S. restaurants. Yahoo Finance’s Brain Sozzi shares the details.
Video Transcript
JULIE HYMAN: So let's talk about chicken tenders, or chicken tenders.
BRIAN SOZZI: Yeah, so this is Beyond Meat's, I would say, first serious hardcore attempt to cracking the code at transforming the mighty fast food chicken nugget. They're out this morning saying that they have released or they're about to release at 400 restaurants, fast food restaurants-- more local restaurants, so they're not McDonald's-- they're not Yum Brands yet-- a new chicken tender.
The starring ingredient in this chicken tender here-- and very helpful graphic up there on what these actually are. The star ingredient is the good old fava bean. I talked to Beyond Meat's founder and CEO Ethan Browning. He tells me the fava beans is essentially what gives these chicken tenders their chicken taste. So again, that is coming up at 400 restaurants here.
Now this is not the first time Beyond Meat has experimented with chicken. It had grilled chicken strips earlier on in its life. Those are no longer in the market. Early last year, they started testing bucket-- started testing with KFC. I'm being careful on what to actually call this stuff because it is not normal chicken here. But they tested product, a chicken product, with KFC last year at certain locations here. But this is their first real attempt at cracking the code on a plant-based chicken nugget or a tender.
And this would be-- when it eventually likely arrives at other fast food restaurants, it would be the first plant-based chicken tender on the market. As our very own nugget expert, Myles Udland, knows, McDonald's is not selling plant-based nuggets yet. Burger King is not selling plant-based chicken tenders yet. Beyond Meat is coming in here with a tender here.
And of course, we have to tie this back to the stock price because that's what we do here. We're not a food show. Beyond Meat shares up about 12% year to date, being held back, I think, by restaurants still under pressure from the pandemic. Interesting, though, Tyson Foods shares, the king of chicken, up 15% year to date.
JULIE HYMAN: I have to say a couple of things. First of all, I don't think they're the first chicken tenders on the market-- maybe in fast food stores. But you could go to your local grocery store and buy fake chicken tenders, right?
BRIAN SOZZI: In fast food.
JULIE HYMAN: In fast food. The other thing I would say is, I happened to have had fava beans in a dish last night. I mean, certainly, in their unadulterated fava bean form, they don't taste like chicken. But, you know, I can be proven wrong until I taste these things.
BRIAN SOZZI: I have not tried this, and I'm looking forward to, in fact, trying this product. But, you know, ultimately, Myles, more of these chicken tenders on the market, maybe it could alleviate some of the chicken shortage we're seeing through the country. Maybe that cools inflation. Maybe that backs the Fed off of tapering its bond purchases. And maybe the S&P 500 goes higher, all because of these tendies, Myles, all because of the tendies.
MYLES UDLAND: I'm just-- I'm kind of tired of this story of like, oh, they're going to have a product. I mean, we say, like, they're not in McDonald's yet. We're not in Burger King yet. The yet-- yet is an assumption. Yet is like, oh, of course, this product is going to be in all these places. There's really not a lot of evidence that people are clamoring for this specific replacement.
And also, you know, this came up a little bit in talking to some folks about the Traeger S-1 filing. And they, of course, sell expensive, high-end wood pellet-burning grills. And the risk is like, OK, you know, climate change, it's not really-- grilling meat isn't exactly a green play. How do they work around that? And I'm not really sure that they're going to try to because the green play is to eat less meat. The green play is not to eat processed fake meat.
The green play, the climate conscious thing that consumers are doing more often and I think are going to start doing, continue doing, in larger numbers going forward, is not eating meat. And I don't think a 17,000 ingredient or that-- ah, it's probably 30 ingredients, right? Reengineered meat-like product, to me, is not consistent with that view. So I feel like the market is not-- the opportunity in the market is just not what we continue to hear for a company that has a $9 billion market cap. And we were supposed to get excited about every test run they do in a national chain.
BRIAN SOZZI: Myles, are you a McNugget guy or a Burger King chicken tenders guy?
MYLES UDLAND: McNugget.
BRIAN SOZZI: Hm. How about you, Julie?
JULIE HYMAN: Good market research there. One more point to what Myles was saying about the yet, about the inevitability supposedly of this. There's one product that they tried to introduce that didn't work, right? Wasn't that the Dunkin' sausage, the Beyond Meat sausage? They ended up pulling it. And to me, sausage is one of the things that would make the most sense, would allow, for example, people who don't eat pork, of which there are many, to do this instead. Sausage is already a heavily spiced thing, so it can work well in a meatless form. And that one didn't work. So if that doesn't work, we'll see if the tendies work.
MYLES UDLAND: And I just-- the other thing, too, again, this is, like, this green future of food kind of thing. But yesterday, you know, Beyond Meat CEO was telling the Wall Street Journal, no, the goal is to be in every fast food chain. So we're cleaning up the planet or whatever and helping people with their diet, but our distribution channel that we're really striving for is every fast food chain.
