PepsiCo and Beyond Meat Inc have said that they have formed a joint venture to develop and sell snacks and beverages made from plant-based protein, sending shares of the latter company to an 18-month high.
The deal is the latest in a run of marketing successes for Beyond Meat which include a distribution deal with Walmart, and partnerships with restaurants including Taco Bell, KFC and Starbucks.
The company's burger patties and sausages have been among the leaders in the surge in interest in plant-based alternatives over the past two years as consumers worry about their health, animal welfare and food safety.
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However, it reported a surprise easing in sales in the three months to October as a boom at the start of the COVID-19 crisis tapered off.
The new partnership will give Beyond Meat access to PepsiCo's distribution and marketing resources and allow it to expand into new product lines, Beyond Meat CEO Ethan Brown said.
In addition to its namesake soda, PepsiCo owns the Lays, Quaker and Doritos brands. It has also been looking to expand its portfolio of health-focussed snacks and beverages.
Beyond Meat said that it could not provide additional details of the new deal as many of the snack and beverage products being made under the new partnership are still under development. The operations will be managed through a newly created entity called PLANeT Partnership LLC.
Beyond Meat's shares rose as much as 39% to $221.
Questioning The True Benefit Of The Deal
"Any time a relatively small company can partner in any way with a global behemoth like PEP, it's usually good news," J.P. Morgan analysts said, but questioned the true benefit of the deal. "Is there a huge, uncounted population clamouring for vegan Doritos? Probably not, in our opinion, and surely not big enough to justify this kind of stock move."