UPDATE: June 16, 2022: Following a recent check-in with McDonalds' franchisees, BTIG analyst Peter Saleh said Thursday he doesn’t expect McDonald’s to roll out McPlant nationwide during the second half of the year. Market tests of the product are coming at or below low-end sale projections, he said in a report emailed to Restaurant Dive. In San Francisco, sales were on the low-end projection of 125 to 300 sandwiches sold per week, and Dallas/Fort Worth reported 30% below the low-end projection with about 90 sandwiches sold per week or 13 per day. In rural areas of East Texas, operators reported selling only a few sandwiches per day. Despite the lack of demand for McPlant, franchisees told BTIG that McDonald’s is committed to a plant-based offering. McDonald’s didn’t respond to a request for comment before press time.
Dive Brief:
- A report from BTIG analysts Peter Saleh and Ben Parente claims McDonald's McPlant product isn't meeting sales expectations in test markets in California and Texas. McDonald's, may only be selling about 20 of the meat-free sandwiches per day in higher performing stores, down from an expected 40 to 60 per day.
- The shortfall in sales volume has led some franchisees to cook the sandwiches to order rather than pre-cooking and then holding the sandwiches for 15 minutes, lengthening service times up to an extra minute and causing throughput issues at the drive-thru.
- An initial test at eight stores last year saw much higher sales volume of the product, around 70 sandwiches sold per day. Following that test, McDonald's expanded to a larger limited-time market test in about 600 restaurants in Golden State and Lone Star State in February.
Dive Insight:
The report claims some McDonald's franchisees were disappointed in McPlant's sales volumes, which linger in the single digits in some stores. McDonald's didn't respond to a request for comment before press time.
"Our checks suggest that restaurants in the Dallas/Fort Worth and San Francisco Bay Area are selling about 20 McPlant sandwiches per day, while restaurants in more rural areas of East Texas are selling only 3-5 sandwiches per day," Saleh and Parente write.
Saleh and Parente predict McDonald's will change its McPlant marketing strategy and perhaps alter the price point for the sandwich to expand the demographic cohorts interested in the product.
"For McPlant to be more ubiquitous, the price point needs to be more competitive with traditional burgers, and the health and climate benefits need to have greater emphasis," the report states.
Saleh and Parente said their research should temper expectations of a national launch of the sandwich. But McDonald's and McPlant co-creator Beyond Meat have a three-year deal, meaning poor sales in one market test are unlikely to kill plant-based protein offerings at the burger chain.
Burger King's initial market tests of plant-based burgers saw limited success, but sales eventually stagnated and the company was forced to offer its Impossible Whopper as part of its two-for-$6 menu deals.
But international markets have seen strong performance for plant-based burgers, according to Beyond Meat's Q4 2021 earnings call. A market test of McPlant in the United Kingdom and Ireland led to a marketwide rollout of the sandwich in those two countries in January, Beyond Meat founder and CEO Ethan Brown said on the call. That launch has been supported by extensive marketing.
"The U.K. and Ireland launch is being supported by a robust joint marketing program that spans across TV, radio, out-of-home, social, PR, influencer, mobile and digital elements," Brown said.
McDonald's CEO Chris Kempczinski predicted last October that it would take several quarters before it was clear whether the sandwich had mass-market appeal in the United States.
