Plant-based meat producer Beyond Meat Inc. needs to add around 120,000 new outlets at current levels for the company to reach $1 billion in global foodservice sales, UBS analysts wrote in a Dec. 9 note.
In the third quarter of fiscal 2019, Beyond Meat sold into about 23,000 foodservice outlets at an average annualized sales rate of approximately $7,000 per unit. UBS expects the company's net sales to grow at 36% CAGR in the next five years and reach $1.8 billion in revenue by 2025.
UBS analysts said the company can grow its foodservice segment by partnering with more quick-service restaurants and by increasing same-door restaurant productivity via new menu items and greater awareness. McDonald's Corp., Jack in the Box Inc., Five Guys Enterprises LLC and The Wendy's Co. could be Beyond Meat's biggest potential fast-food chain partnerships in the U.S., according to the note.
The analysts also said that a U.S. rollout of the McDonald's PLT, or plant-lettuce-tomato, burger could generate more than $300 million in sales for Beyond Meat. The plant-based burgers are being sold on a trial basis at select McDonald's outlets in Canada.
Beyond Meat has also developed a breakfast sandwich for Dunkin' Brands Group Inc. and a meatball marinara with Subway.
According to the note, more than half of the franchisees surveyed by UBS said plant-based meat offerings helped increase foot traffic. Around 70% of them expect sales of vegan menu items to increase in the next 12 months.
UBS maintained its $85 price target and neutral rating for Beyond Meat.