Patties from Beyond Meat Inc.’s Beyond Burger plant-based burger are cooked on a skillet.
Yuriko Nakao | Getty Images
Beyond Meat and PepsiCo announced on Tuesday that they have formed a joint venture to create, manufacture and market snacks and drinks with plant-based substitutes.
Shares of Beyond were up more than 27% in premarket trading on the news, while Pepsi’s shares were up about 1%.
The partnership gives Beyond, a relative newcomer to the food industry, the opportunity to leverage Pepsi’s manufacturing and marketing expertise for new products. Pepsi, for its part, can deepen its investment in plant-based categories, which are growing more and more, while partnering with one of the best meat substitute makers.
Jefferies estimates Beyond Meat controls about 13% of the meat alternatives category in the US.
“PepsiCo represents the ideal partner for us in this exciting venture, one of global scope and importance,” Beyond Meat CEO Ethan Brown said in a statement.
The business will be managed through a limited liability company called The PLANeT Partnership. Financial terms have not been disclosed.
The partnership also helps Pepsi pursue its sustainability goals. Last year, the company signed the United Nations pledge, committing to setting science-based emissions reduction targets. A 2019 UN report found that the food system causes 37% of greenhouse gas emissions. Pepsi has also sought to reduce the amount of sugar in its products and add healthier snacks and drinks to its portfolio in recent years.
PepsiCo’s stock has remained roughly the same for the past year, giving it a market value of $ 196 billion. The food and beverage giant posted higher sales during the pandemic, thanks to its consumer inventory storage and less exposure to outdoor occasions than its rival Coca-Cola.
As of Monday’s close, Beyond’s stock is up more than 32% over the past year, despite the blow to the company from the coronavirus pandemic, which negatively impacted restaurant sales. The company has a market value of $ 9.95 billion.