Pies from Beyond Meat Inc. plant-based burger Beyond Burger is cooked on a pan.
Yuriko Nakao | Getty Images
Beyond Meat and PepsiCo announced Tuesday that they have formed a joint venture to create, manufacture and market snacks and beverages with vegetable substitutes.
Shares of Beyond rose to 16% in market trading on the news, while Pepsi’s share rose 1%.
The partnership gives Beyond, a relative newcomer to the food world, the chance to leverage Pepsi’s manufacturing and marketing expertise for new products. In turn, Pepsi is able to deepen its investment in plant-based categories, which are becoming more and more, while working with one of the leading manufacturers of meat substitutes.
According to estimates by Jefferies, Beyond Meat controls about 13% of the category of meat alternatives in the US.
“PepsiCo is the ideal partner for us in this exciting endeavor, one of global reach and importance,” Beyond Meat CEO Ethan Brown said in a statement.
Operations will be managed by a limited liability corporation called The PLANeT Partnership. Financial terms were not disclosed.
The partnership also helps Pepsi achieve its sustainability goals. Last year, the company signed the pledge of the United Nations and committed to setting science-based emission reduction targets. A 2019 UN report found that the food system contributes to 37% of greenhouse gas emissions. Over the past few years, Pepsi has also tried to reduce the amount of sugar in its products and add healthier snacks and beverages to its portfolio.
Shares in PepsiCo have been roughly equal over the past year, giving a market value of $ 196 billion. The food and beverage giant saw higher sales during the pandemic, thanks to consumer inventory and less exposure to home opportunities than its rival Coca-Cola.
With the close of Monday, Beyond’s share has risen more than 32% in the past year, despite the pessimism of the coronavirus pandemic, which has hurt its sales to restaurants. The company has a market value of $ 9.95 billion.