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McDonald’s Corp (NYSE:MCD) is beginning the expansion of Beyond Burgers, the plant-based foods in Canada. The fast-food giant expands the Beyond Burgers to another 52 restaurants in Ontario for three months with effect from January 14, 2020. It is on the backdrop of the trial of P.L.T. (Plant, Lettuce, Tomato) this fall in Canada. The fast-food giant is yet to roll out the plant-based burger as a regular item in 14,000 outlets in the US. McDonald’s gets raw materials for French Fries and burgers from several suppliers.

Impossible Foods stepped back from the deal

Citing capacity problems to meet the demand, Impossible Foods has stepped back from a deal with the biggest fast-food chain in the world, McDonald’s. Pat Brown, Chief Executive Officer of Impossible Foods, said the company does not have sufficient capacity to meet the growing demand. It says sorry if McDonald’s wants the supply in all the restaurants. The company should improve its capacity before saying yes for a deal with large customers.

Beyond Meat is also facing capacity challenges. Alexia Howard, an analyst, said Beyond Meat needs to introduce Beyond P.L.T. on a regional basis first to ensure full supply for McDonald’s in one and half years across the nation. The demand for plant-based meat is huge from McDonald’s, considering its rollout plans across the nation.

The market cap of Beyond Meat is $5 billion. Beyond Meat manufactures its products using pea protein. The company plans to expand its production and enhance its roll out in Asia by 2021.

Americans spending on fast foods

Americans’ annual spending per person on fast foods is $3,500. Impossible Foods and its peers are trying to cash in on this demand through partnerships. The company entered a pact with Burger King in 2019 to introduce Impossible Whopper, the soy-based fast food, in the US. Brown said the company is focusing on doubling the production rather than entering a deal with the world’s No.1 fast-food chain.

Other companies engaged in the fast-food business include Dunkin Brands and Yum! Brands’ KFC. They have rolled out the plant-based version of products on their menu items.

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