Beyond Meat shares surged on Tuesday after the plant-based healthy snacks group launched an unexpected joint venture with PepsiCo, the company famed for its eponymous sugary drink.
The joint venture between a group that aims to produce sustainable products and PepsiCo is expected to launch its lines this year under the name Planet Partnership.
The Los Angeles based Beyond Meat’s shares jumped 26 per cent to $199.38, while PepsiCo’s were steady at $140.57.
“Plant-based proteins represent an exciting growth opportunity for us, a new frontier in our efforts to build a more sustainable food system,” said Ram Krishnan, PepsiCo's global chief commercial officer.
Ethan Brown, Beyond Meat founder, said the venture aimed to “inspire positive choices for both people and planet”, adding that PepsiCo was an ideal partner as it gave the group global reach.
The announcement comes as more consumers are looking for healthier snacks, while obesity is a growing concern for policymakers.
Shoppers, especially the younger generation, are also becoming more aware of the sustainability issue around the food they eat.
PepsiCo said it was expanding its portfolio of more nutritious products that were made sustainably through techniques such as regenerative agriculture and at carbon-neutral production plants.
It was also increasing its offering of products focused on health and wellness to consume “on the go”.
The sector has seen a number of deals between big consumer groups and companies promoting sustainable products.
PepsiCo has acquired baked fruit and veggie chips maker Bare Snacks, while US food group Mondelez bought Perfect Snacks, a US maker of refrigerated protein bars.
Chocolate maker Hershey acquired Amplify Brands, which makes the SkinnyPop popcorn.
As part of the drive for sustainable healthy products, demand for plant-based sweets and snacks is also growing.
“Consumers demand new formats, new plant proteins, and an extra level of sophistication,” said Innova Market Insights, a food and beverage analysis and data company.
The shelf space taken up by plant-based vegan chocolate and protein bars and protein-enriched drinks is rising thanks to the perceived health benefits, said Niccolo Manzoni of Five Seasons Venture, a food tech venture capital group based in Paris.
The joint venture with PepsiCo follows Beyond Meat’s unexpected third-quarter loss in November with sales in restaurants and supermarkets slowing sharply after an initial revenue bump at the start of the pandemic.
Beyond Meat has been increasing its reach in the restaurant and fast food arena with new products such as a plant-based patty that will be available as part of McDonald’s plant-based menu.
This adds to its list of partnerships with fast-food chains that include Denny’s, Del Taco and Dunkin’ in the US.
In China, Beyond Meat’s products are offered through Starbucks as well as Yum China’s selected KFC, Pizza Hut and Taco Bell outlets.