CHICAGO -- McDonald's is weighing whether to jump on the plant-based bandwagon, as Burger King prepares to roll out meatless Whoppers nationwide.
"Our menu teams are clearly paying close attention to it," McDonald's CEO Steve Easterbrook said last week. "The key for us is to identify sustaining consumer trends."
The world's biggest burger chain, which has 14,000 U.S. restaurants and 38,000 worldwide, is considering whether the complexities associated with rolling out a plant-based burger are worth it, said Easterbrook, during a call with analysts to discuss the company's first-quarter earnings.
"There may be more to come but nothing much to say about it in the moment," Easterbrook said.
Many of McDonald's fast-food competitors have decided to take the gamble.
After a test run in St. Louis just last month, Burger King said last week that it plans to offer Impossible Whoppers at all U.S. restaurants by the end of 2019. White Castle offers meatless sliders using burgers from Impossible Foods, and Carl's Jr. offers plant-based patties from Beyond Meat. Taco Bell in April started testing meatless versions of some of its classics, such as a Vegetarian Crunchwrap Supreme and a Vegetarian Quesarito.
Plant-based burgers are no longer just the purview of vegetarians and vegans as more consumers try to cut back on meat.
Still, it isn't surprising that McDonald's is waiting to ensure the plant-based trend has staying power before jumping in, given the chain's global scope and diverse customer base, said Zak Weston, food-service analyst at the Good Food Institute, a nonprofit think tank that promotes protein alternatives.
But "it would shock me if they don't have something on the menu in the next 18 months," Weston said.
Yet Bob Goldin, co-founder and partner at Chicago-based food industry consultancy Pentallect, said he wonders if the mania around plant-based proteins is a flash in the pan.
"This is 'monkey see, monkey do' right now," Goldin said. "I think this thing has a shorter shelf life than we think."
McDonald's is wise to wait and see, he said, especially given that its efforts to push healthier fare like salads and yogurt parfait have not resonated with customers.
"I think they should innovate around their core offerings," Goldin said.
Consumer trends have made it a business imperative for big food companies to at least consider adding plant-based options to their offerings, Weston said.
U.S. sales of plant-based meat substitutes jumped 42 percent over the past three years, to $888 million, according to Nielsen, while traditional meat sales rose 1 percent, to $85 billion, during that time. Two-thirds of U.S. consumers say they are trying to reduce meat in their diets, according to a study by the Johns Hopkins Center for a Livable Future.
McDonald's recently offered a vegan burger in Germany, made with Nestle's soy- and wheat-based Incredible Burger. It has vegetarian sandwiches in other international markets, including India's McAloo Tikki made of potatoes and peas, which is available in the restaurant at McDonald's West Loop headquarters in Chicago.
But a broad U.S. rollout of a meatless burger would mark an inflection point that plant-based protein alternatives have arrived on Main Street, Weston said.
"It's understandable that they're being deliberate about it because if McDonald's puts a plant-based burger on the menu it's going to shake the world," he said.
Interest in plant-based burgers has grown rapidly as vegetarian burgers have evolved from overcooked tofu and mushy black bean burgers to meat-like substitutes that offer the same sensory experience as the real thing, Weston said. Most plant-based protein alternatives are made of soy, wheat and, increasingly, peas, though companies are experimenting with other options such as mung bean, he said.
Improved quality combined with a health-focused consumer mindset has pushed demand so high that the only constraint to growth is that plant-based protein manufacturers can't produce enough to keep up, Weston said.
Big food companies like Cargill have been investing in plant-based startups to get a slice of the action. One such startup, 10-year-old Beyond Meat, began its initial public offering Thursday that values the company at about $3.7 billion.
Ninety-three percent of shoppers who purchase Beyond Meat also purchase animal meat, the company said in its regulatory filing. That suggests it's not a novelty but a mainstreaming of the trend as people incorporate more diverse proteins in their diets, Weston said.
SundayMonday Business on 05/05/2019