Shares of Beyond Meat Inc. grew as much as 12.5% on Jan. 7 after rival Impossible Foods Inc. decided to no longer pursue a supply deal with McDonald's Corp., Reuters reported.
Impossible Foods CEO Pat Brown told the newswire that his company does not have the production capacity for such a large partnership.
"Having more big customers right now doesn't do us any good until we scale up production," Brown reportedly said.
The move is set to benefit Beyond Meat which is partnering with the restaurant chain to offer a plant-based burger, McDonald's P.L.T.
It is unclear how far discussions between Impossible Foods and McDonald's went or why it collapsed, Reuters said.
When contacted by S&P Global Market Intelligence, McDonald's did not comment on the canceled deal but pointed at its existing partnership with Beyond Meat.
Beyond Meat did not immediately respond to request for comment.
An Impossible Foods spokeswoman said the company is "happy to talk to any and every prospective customer at any time."
In August 2019, Impossible Foods entered into a partnership with Restaurant Brands International Inc.'s Burger King to create a plant-based version of the Whopper burger. The Impossible Burger was sold in more than 7,000 Burger King locations nationwide until supplies lasted.
Shares of Beyond Meat closed up 12.47%, or $9.30, at $83.89 on Jan. 7.