PepsiCo Inc. and Beyond Meat are partnering on a new venture to develop and market snacks and beverages made from plant-based protein. The announcement of the collaboration sent Beyond Meat’s stock soaring on Tuesday.
This new venture, called The PLANeT Partnership, LLC, is intended to utilize Beyond Meat’s established plant-based protein market presence and technology, as well as PepsiCo’s marketing and commercial capabilities. The companies are committing to using “positive ingredients,” as well as employing regenerative agriculture, net water techniques and carbon-neutral production plants.
“Plant-based proteins represent an exciting growth opportunity for us, a new frontier in our efforts to build a more sustainable food system and be a positive force for people and the planet, while meeting consumer demand for an expanded portfolio of more nutritious products,” PepsiCo Global Chief Commercial Officer Ram Krishnan said in a statement. “Beyond Meat is a cutting-edge innovator in this rapidly growing category, and we look forward to combining their unparalleled expertise with our world-class capabilities in brand-building, consumer insights and distribution to deliver exciting new options.”
The financial terms for the joint venture were not disclosed.
Plant-based protein has steadily increased in recent years, with a 11.4 percent increase in the U.S. retail sales of plant-based foods in 2019, according to the Plant Based Foods Association (PBFA). This trend is not slowing down soon, with investment firm UBS estimating that plant-based proteins could increase to $85 billion in sales by 2030. By contrast, plant-based protein sales in 2018 were $4.6 billion.
Beyond Meat has been one of the market leaders in plant-based protein. According to Barron’s, Beyond Meat held approximately 21.4 percent of the market share as of October 2020. Impossible Foods is behind Beyond Meat with roughly 4.3 percent of market share, but that figure has been rising as the company has increased its distribution. Kellogg’s Morningstar Farms is the market share leader with 30.6 percent of the plant-based protein sector, according to the Barron’s report.
On Tuesday, Jan. 26, Beyond Meat’s stock soared with the announcement of the partnership. The Los Angeles-based company’s stock closed at $158.73 per share on Monday before jumping to $218.90 per share at the opening bell, an increase of $60.17 per share. The stock hit a high of $221 around mid-morning on Tuesday before declining to the mid-$180 range. At the closing bell, the stock was trading at $186.83 percent, a 17.70 percent increase on the day. In after hours trading, the stock had declined around 0.38 percent as of 5:15 p.m. CST.
PepsiCo saw a less dramatic increase in its stock. The company’s stock Roseto $141.80 per share at the end of the day.
Beyond Meat has an Arkansas connection, as Tyson Inc. previously held a 6.5 percent stake in the company before selling in 2019. According to Reuters, Tyson’s stock holdings would have been worth approximately $79 million based on a $1.21 billion IPO. Tyson dumped the stock after electing to launch its own plant-based protein line, Raised and Rooted.