Patties from Beyond Meat Inc.’s plant-based burger Beyond Burger are 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 containing plant-based substitutes.
Beyond’s shares rose up to 16% in premarket trading on the news, while Pepsi stock rose 1%.
The partnership gives Beyond, a relative newcomer to the food world, the opportunity to leverage Pepsi’s manufacturing and marketing expertise for new products. For its part, Pepsi can deepen its investments in increasingly dense plant-based categories while working with a leading manufacturer of meat substitutes.
Beyond Meat controls about 13% of the meat alternatives category in the US, according to Jefferies estimates.
“PepsiCo is an ideal partner for us in this exciting endeavor of global scope and importance,” said Ethan Brown, CEO of Beyond Meat, in a statement.
Operations are managed through a limited liability company called The PLANeT Partnership. Financial details were not disclosed.
The partnership also helps Pepsi work towards its sustainability goals. Last year the company signed the United Nations pledge to set science-based emission reduction targets. A 2019 report from the United Nations found that the food system is responsible for 37% of greenhouse gas emissions. In recent years, Pepsi has also tried to reduce the amount of sugar in its products and add healthier snacks and drinks to its portfolio.
PepsiCo’s shares were roughly unchanged over the past year, which translates to a market value of $ 196 billion. The food and beverage giant saw higher sales during the pandemic thanks to consumer stockpiling and less exposure to off-home opportunities than its rival Coca-Cola.
As of Monday’s close of trading, Beyond’s stock was up more than 32% over the past year, despite the coronavirus pandemic affecting business and affecting restaurant sales. The company has a market value of $ 9.95 billion.