Investors snapped up shares of Beyond Meat (BYND) - Get Report Tuesday after Starbucks (SBUX) - Get Report announced it would be expanding plant-based meat options, raising the prospect of a big boost in demand for the imitation-meat maker's products.
Beyond Meat's stock price jumped 12.55% to $122.81 after Starbucks CEO Kevin Johnson unveiled a public letter outlining the giant coffee chain's plans to expand "plant-based options, migrating toward a more environmentally friendly menu."
The decision to use more plant-based meat alternatives was the first of five strategies the Starbucks chief outlined as part of what he described as the Seattle-based company's "multi-decade commitment to be a resource-positive company."
Oppenheimer analyst Rupesh Parikh said Starbucks' announcement was a sign that plant-based meat is going "mainstream" and that Beyond Meat now "likely has a chance of at selling products at Starbucks."
Starbucks is "clearly a big player" in the food services sector and so its announcement means the "addressable market continues to grow," the Oppenheimer analyst told Bloomberg in an email.
While the letter from the Starbucks CEO didn't give any details on how the coffee giant intends to expand plant-based options, the company indicated separately that it was looking at meat alternatives for its breakfast menu,.
The Starbucks announcement comes as competition also mounts among companies interested in supplying plant-based meat alternatives.
Kit Kat maker Nestle recently announced it will soon start selling a soy-based sausage in Europe and a pea-based version in the United States, with a plant-based version of tuna also in the works.