Beyond Meat drops after Nestle says it's launching a veggie burger
- Nestlé announced Monday that it will launch a veggie burger in the US this fall.
- Shares of Beyond Meat slid as much as 5% on the news.
- Plant-based protein is gaining popularity in the US and abroad, with grocery stores and fast-food chains adding vegan options.
- Watch Beyond Meat trade live.
Beyond Meat, the plant-based burger maker, has some new competition.
On Monday, Nestlé said it is planning to launch its own plant-based burger in the US, sending Beyond Meat shares down as much as 5%. Beyond Meat has been the best-performing US IPO this year, up almost 300% from its initial-public-offering price of $25.
The veggie burger will be launched this fall by Nestlé's Sweet Earth brand, CNBC reported Monday. The news comes as plant-based protein is gaining popularity in the US. Both grocery stores and fast-food chains now offer alternative meat to consumers. The $14 billion market could balloon to roughly $140 billion over the next decade, according to a report by Barclays.
Sweet Earth's Awesome Burger will be made with pea protein, similar to Beyond Meat's patty. The burger is not Nestle's first foray into the plant-based burger world - the company in April launched a soy-and wheat-based burger in Europe under its Garden Gourmet brand. In addition, it's Incredible Burger is available at McDonald's in Germany.
Impossible Foods, another competitor, makes a veggie burger with soy protein. The company worked with Burger King to create the Impossible Whopper, a vegan burger that the chain plans to roll out to the entire country by the end of the year. Fast-food chains such as KFC, Del Taco, and Tim Hortons have also added vegan meat to menus in recent months, and Chick-fil-A and McDonald's are also exploring adding vegan options to their menus.
Beyond Meat's stock could see a 30% lift if it secures a partnership with McDonald's, analysts at Jefferies wrote in a note. The company, which has gained more than 300% since its May IPO, is being watched closely by investors as the stock price surge has made it an expensive short.
Beyond Meat will report its first quarterly earnings as a public company after Thursday's closing bell.