KFC restaurants nationwide will add Beyond Meat’s meatless chicken to its menus, starting Monday for a limited time.
The national launch comes after years of testing from the Yum Brands chain and Beyond to create a meat substitute that mimicked the taste and texture of whole muscle chicken, like chicken breast. The two companies first tested the plant-based chicken at an Atlanta restaurant in August 2019, selling out of their supply in less than five hours. In 2020, customers in Nashville, Charlotte and southern California got to try the product.
Nearly a year ago, Beyond announced a formal partnership with Yum to make exclusive meat substitutes for Pizza Hut, Taco Bell and KFC.
Hunt for more growth
Beyond’s stock has struggled as Wall Street began doubting its growth prospects. In the last 12 months, shares have lost half their value, dragging the company’s market value down to $3.9 billion. The stock closed Tuesday down 5% at $61.62 and short-sellers betting against the stock represent 37.2% of available shares, according to Factset.
On the other hand, shares of Yum have climbed 30% in the last year, bringing its market value to $40.3 billion. Strong demand for KFC’s fried chicken has helped lift the stock price. The chain’s U.S. same-store sales jumped 13% on a two-year basis during its third quarter.
But the fried chicken chain thinks customers will want something different to fulfill their New Year’s resolutions.
“This is really about where the customer is going, they want to eat more plant-based proteins,” said Kevin Hochman, U.S. president of KFC. “It’s January, so it’s a time of New Year’s resolutions and wanting to do something different in your diet.”
Customers can buy KFC’s Beyond Fried Chicken in six- or 12-piece orders, with dipping sauce included. Prices start at $6.99, excluding tax.
In preparing for launches to come in the New Year, Beyond poached industry veterans from Tyson Foods for its C-suite in December, adding Doug Ramsey as chief operating officer and Bernie Adcock in a new role of chief supply chain officer. Ramsey spent three decades at Tyson, overseeing its poultry and McDonald’s businesses. Adcock also spent 30 years at Tyson with a focus on operations and supply chain management.
“We’re continuing to grow the operations team, they did a lot of work to help the team get ready in these final days,” Beyond Meat CEO Ethan Brown said, adding the KFC partnership has not been an overnight deal, but rather years in the making. “They’ve helped us prepare for this and we brought in, I think, some of the top executives in the industry.”
Synergies with retail
And the new product provides the opportunity to bring customers into its grocery business, which was boosted initially by pantry-loading early in the pandemic, but then saw declines in subsequent quarters.
“It has great synergies with what we are trying to do in retail,” Brown said.
To promote the new menu item, YouTube star Liza Koshy will star in the meat-free chicken’s ad campaign, in the latest partnership between fast-food chains and influencers. However, KFC will not be targeting vegans and vegetarians directly with its marketing because the Beyond Fried Chicken is made using the same equipment as KFC’s traditional fried chicken.
“It’s really important that we make it really easy for the team members,” Hochman said.
A national labor crunch has hit restaurants hard over the last year, with many eateries running short staffed. To run smoothly even with fewer workers, some chains have been reticent to add new items or even scaled back their menus. Surges in new Covid-19 cases exacerbate those issues as workers call out due to positive tests or exposure.
While the launch comes amid a nationwide surge in the omicron variant, both Hochman and Brown are bullish on the product. More Americans are embracing a so-called flexitarian diet, where consumers cut down on their meat consumption for health and environmental reasons. That has been driving some of the popularity of plant-based meat substitutes.
“From a supply perspective, we feel really good about it, and it’s something we have experience with in initial trials,” Brown said.