Beyond Meat (BYND) - Get Report is the biggest winner from news that rival Impossible Foods can't produce enough plant-based patties to satisfy McDonald’s (MCD) - Get Report demands and the stock was rising after it announced it was expanding its partnership with the fast-food giant.
Beyond Meat and McDonald’s announced an expansion of the test for its “P.L.T.” sandwiches - plant, lettuce and tomato - to 52 restaurants in southwestern Ontario for 12 weeks starting Jan. 14.
That news comes after Beyond Meat rival Impossible Foods announced that it was terminating its bid to be McDonald’s plant-based burger supplier because it does not yet have the capacity to meet the fast food chain’s demand.
“It would be stupid for us to be vying for them right now ... Having more big customers right now doesn't do us any good until we scale up production,” Impossible CEO Pat Brown told Reuters on Tuesday. "I wish we had vastly more capacity than we do right now because the demand is high.”
That news led Beyond Meat to jump 12.5% during Tuesday's session and move higher by another 6% in premarket trading Wednesday.
Impossible Foods is now working on more than doubling its production after it struck a distribution deal with Burger King last year to launch the company’s Impossible Whopper.
Meanwhile, McDonald’s first launched a 12-week test of the P.L.T. burger in Canada in September. That sandwich hasn'tt made its way to the United States yet and the company has not provided a timetable for when customers in the United States will be able to purchase the plant-based sandwich.