Image: The vegan Beyond Taco was one of the most popular new product launches ever for fast-food chain Del Taco.
Plant-based food sales are on the rise across the U.S.—and 34 percent of Americans plan to incorporate vegan or vegetarian foods into their diet this year. Mainstream restaurant chains are picking up on this trend, with fast-food giants like Burger King, White Castle, and Carl's Junior launching vegan menu offerings in partnership with analog meat startups Impossible Foods and Beyond Meat.
The moonshot rise of these two companies—both in terms of increasingly healthy balance sheets and popularity with consumers—is evidence enough that the plant-based food trend has real staying power. Ahead of its IPO, Beyond Meat was a hot topic not only for sustainability-focused publications like TriplePundit, but also for decidedly mainstream financial outlets like Jim Cramer’s "Mad Money." The buzz sent the company's stock price surging 163 percent on the first day of trading.
On Monday, Impossible Foods raised $300 million in its latest funding round, bringing its total venture capital investment to more than $750 million, Entrepreneur reports.
Meanwhile, these companies' products continue to be a hit on the marketplace—even among legacy food players like fast-food chains—and the accolades keep coming in. Del Taco recently announced that its vegan taco offering, which features a plant-based ground beef from Beyond Meat, is on track to be one of the most lucrative new product launches in the chain's history.
As Business Insider reported this week, holdouts like McDonald's and Chick-fil-A are under increasing pressure to change their tune. "Chains that have not yet added a vegan option to the menu are feeling the heat," wrote Business Insider correspondent Kate Taylor.
A Change.org petition calling for McDonald’s, which has experimented with vegan options internationally, to add a plant-based burger to its U.S. menu had more than 200,000 signatures at press time. And a Chick-fil-A representative confirmed to Business Insider that the company is "in the early stages of exploring" the addition of plant-based menu options. "We're certainly wanting to broaden our thinking and really start big in that funnel and come down," Amanda Norris, the executive director of Chick-fil-A's menu, told the publication.
What that actually means in practice remains to be seen. But as plant-based foods see double-digit sales growth in both restaurants and retailers, these two fast-food chains have some catching up to do. Overall, the plant-based protein segment is expected to be worth $5 billion by 2020. And while chains like Del Taco—not to mention Beyond Meat investors—are riding this train to the bank, holdouts may be missing out.
“Historically, making the decision to bring on a plant-based burger in McDonald’s would have been a very risky decision to make,” Chris Kerr, cofounder and chief investment officer of New Crop Capital, a VC firm investing in the plant-based food segment, told Fast Company. "That has shifted the other way. If you’re in that position of influence, and you don’t take that risk, you’ll actually miss out, and you’ll be the one who kind of came in behind competition.”
Indeed, legacy companies—both within and outside of the fast-food segment—are already ahead of the game, with firms like Nestlé and Tyson Foods set to launch their own lines of plant-based products. And insiders predict that Beyond Meat's bombshell IPO will only hasten the rush into this burgeoning segment.
"In virtually every venue, people are ready for these types of foods," Todd Boyman, impact investor and CEO of plant-based meat purveyor Hungry Planet, said at a recent event focused on changes in the food segment. Still, one question remains: Is Ronald McDonald ready, too?
Images courtesy of Beyond Meat and Impossible Foods