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Taco Bell Passes On Beyond Meat's Plant-Based Carne Asada

Beyond Meat's version of carne asada Is 'no bueno' for Taco Bell, which is reportedly not happy with the test run it had for the meat substitute offering.
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Beyond Meat  (BYND) - Get Beyond Meat, Inc. Report continues its fall from grace after Taco Bell reportedly told the company that its version of carne asada didn't meet the fast-food chain's rigorous standards. 

Taco Bell, which is part of Yum! Brands (YUM) - Get Yum! Brands, Inc. Report, canceled a test product that featured Beyond's plant-based steak after the samples didn't get the response the company wanted, according to a Bloomberg report. 

The two companies are still going to work together to find a fit and Beyond Meat did fire two employees who worked on the carne asada, according to the report. 

Evaluating multiple iterations when scaling a product is standard practice in our industry. The bottom line is that our partnership with Taco Bell is strong and continuing, and we look forward to further announcements with them," a Beyond spokesperson said, in a statement Beyond Meat's head of communications said was a joint statement from both companies.

Beyond Meat Has Struck Out Before

This isn't the first time Beyond Meat has missed with a product designed for the fast-food market. 

Earlier this year, Dunkin' Donuts  (DNKN) - Get Dunkin' Brands Group, Inc. Report limited the availability of the Beyond Sausage Breakfast Sandwich to just 10 states in the Western part of the country after it failed to catch on in other locations. 

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The company said that it will continue to work with Beyond, but analysts at J.P. Morgan at the time said that the decision was likely because the product wasn't selling.

Beyond Meat Sales Have Dropped

Beyond is not only falling out of favor with fast fooders, however. In the second quarter, Beyond reported a more than 14% decline in grocery sales.

In the third quarter, the company said its decline in revenue was partly a result of lower overall demand. The company reported revenue of $106.4 million for the quarter but guided for even lower revenue between $85 million and $110 million for the fourth quarter. 

Beyond does have a potential deal with McDonald's (MCD) - Get McDonald's Corporation Report to partner on its McPlant burger, but it's very unclear if that deal will actually happen. McDonald's, however, has not committed to rolling the partnership out in the U.S. beyond initial tests.

Beyond Meat shares were down more than 5% in early market trading Friday, but the stock has been in a nose dive all year, losing nearly half of its value since the start of 2021.