McDonald's Plant-Based Burger Trial Isn't a Slam Dunk, Analyst Suggests

Plant-based meats are arguably the biggest trend in fast food. And McDonald's is inarguably America's largest burger chain. So needless to say, the big question on many pundits' mind has been when is Ronald going to start selling a plant-based burger? It's a question that intensified this year when Burger King took its Impossible Whopper nationwide.

Last month, McDonald's partnered with Impossible Foods' top rival, Beyond Meat, to begin a test run of a new plant-based burger called the P.L.T. But short of letting any U.S. customers try it, the company instead trialed the burger at 28 locations around Ontario, Canada. Perhaps testing a Beyond Burger in America would have created too much hoopla, and Canada, while not quite as far away as Finland, where McDonald's launched a different fake meat burger, is a bit of a buffer from the U.S.

Regardless, whatever McDonald's is planning with plant-based meat, a hiccup has apparently occurred: Yesterday, MarketWatch reported that sales of the P.L.T. aren't as strong as analysts had hoped. "A key question is whether McDonald's will partner with Beyond Meat in the U.S.," a Bernstein analyst was quoted as noting earlier this week. "Based on our channel checks with select McDonald's based in Ontario, Canada that are currently testing the Beyond P.L.T. burger, the initial feedback has been largely positive, although it seems that the trial has not been a blowout success thus far that justifies an immediate nationwide rollout across both Canada and the U.S."

Of course, not "a blowout success thus far" certainly isn't a failure. One could argue that blowout successes like KFC's meatless fried chicken test in one single location only did so well simply because of a confluence of publicity and scarcity, and doesn't correlate to national demand. And we shouldn't rush past the "feedback has been largely positive" part either. Still, part of the appeal of plant-based options is the excitement that surrounds them: Avoiding a lukewarm rollout is likely one of the reasons McDonald's has been slow to jump into the plant-based business to begin with. If that's the case, this talk sounds like a bad omen.

And yet, maybe this is just Canada being Canada. In July, the Canadian chain Tim Hortons added Beyond Meat items to its menus only to axe them by September. Meanwhile, in the U.S., Dunkin' also trialed a Beyond Meat breakfast sandwich in July and has just announced it is taking it nationwide. It could just be that Americans are more interested in plant-based beef than our neighbors to the north.

I reached out to McDonald's for a reaction to MarketWatch's report and a McDonald’s spokesperson pointed us towards a statement CEO Steve Easterbrook made during the company’s most recent earnings call cautioning that the trial was still in its early days. Easterbrook also indicated that while the Ontario rollout is indeed a limited run, it's less about timidity to enter the plant-based market and more about literally testing how the P.L.T. would be implemented while getting a read on the "flexitarian customer."

"We want to get the taste right, we want to get the marketing right, we want to get the operations right," he said. "So there's a number of important factors that we are learning quickly, and we think Ontario is a great spot, because it will give us a good read across North America frankly, but also into the developed markets in Europe as well [...] we think the read across will be beneficial and help us speed up our intelligence on this. So, more to come clearly, but it's an area of interest for sure."

Despite being the most successful fast food restaurant on the planet, McDonald's has a history of adding products people don't want. (I'm old enough to remember the Arch Deluxe!) So today's McDonald's may be warier of a big plant-based burger rollout than its competitors. And though the company is a late entry into the fake meat market, its commitment to the test phase means we're probably less likely to see a quick Dunkin'-style turnaround and a more measured rollout. If the Canada trial does turn out to be a bust, McDonald's plant-based burger timeline might get even slower. Either way, it seems the "when will McDonald's add a plant-based burger?" questions won't be going away any time soon.

UPDATE: Oct. 31, 2019: This article has been updated with a response provided by McDonald's.