With Pepsi, Beyond Meat – which already makes vegetable alternatives to beef and pork – will have access to a global powerhouse for distribution and marketing. This means that Beyond Meat can enter more categories and bring new products to market faster, according to a Beyond Meat spokesperson. The US joint venture could include a future expansion to China and the UK, the spokesman added. The companies did not disclose the financial terms of the transaction.
The news led to an increase in Beyond Meat (BYND) stock. Shares closed about 18% on Tuesday.
Pepsi’s marketing skills may also get more people to try Beyond Meat’s product.
“Historic, [Beyond’s] Uika research analyst Erika Jackson wrote in a note on Tuesday. Pepsi can help push marketing to a new level and bring more customers into the fold.
For PepsiCo (PEP), the partnership is a way to get a piece of the plant-based protein pie.
“Consumer demand for plant products is large enough to have an impact on sales as the plant-based alternative industry continues to grow,” Ramsey Baghdadi, consumer analyst at data and analytics firm GlobalData, said in a statement on Tuesday. “PepsiCo’s decision to expand its existing choice of plant snacks will be a game changer in the long run, as more consumers are naturally drawn to the trend.”
Other companies with consumer packaging have entered the market with acquisitions and new lines. Nestle (NSRGY) sells vegetable meat through Sweet Earth, a vegetarian food business he acquired in 2017. And Kellogg (K) sells plant meat through its Incogmeato brand.
PBSiCo often establishes partnerships to establish itself in attractive segments, Jackson of UBS noted. For example, PepsiCo and Starbucks (SBUX) working for years with ready-to-drink coffee.