Beyond Meat’s IPO debut May 2 turned out to be a blockbuster event. It’s soared nearly 250 percent since to $87 per share, making it the most successful launch of 2019.
What’s most interesting about the surge is the booming movement it suggests. Beyond Meat had losses of roughly $30 billion on revenue of just $88 million last year. Yet now it’s valued at about $5 billion based on investors’ belief the alternative meat market is ready to explode.
Restaurants have surely dove in. Burger King has an Impossible Whopper in tests. Sister brand Tim Hortons just announced it plans to use Beyond Meat in a sausage offering. White Castle and Red Robin are also serving plant-based meat.
Boston’s Pizza Restaurant and Sports Bar is in the heart of a menu overhaul. Much of the brand’s recent changes were geared toward keeping costs down and helping franchisees improve profits. A dough-centric push, for example, was intended to slice food costs and boost ROI by taking a central ingredient (dough) and finding multiple outlets. This brings a cost-effective lineup to the forefront and lets more expensive options fall behind.
But another part of this change was to broaden the inclusivity of Boston’s offerings and erase the veto vote. And Beyond Meat fit snuggly into that goal. The company is launching a Beyond Burger to stores, it announced, in an effort to attract new guests, as well as provide loyal regulars with healthy alternatives. A stat the chain touts: More than 70 percent of the people who order the Beyond Burger are meat eaters.
Unlike some past vegetarian options, Beyond is a company that caters to the carnivore with a product that cooks and tastes like red meat. Boston’s said it expects the launch at its 22 units to increase sales and improve customer satisfaction. That and become more attractive to potential investors during what it hopes will be a growth spurt.
The company said it expects to grow unit count by 30 percent every year for the next three in the U.S., including six new restaurants in 2019—five of which will be in fresh markets. That would be followed by a projected nine and 12 stores, respectively, in the coming years, which would put Boston’s on a fast track to double its U.S. footprint.
Katie Borger, senior director of marketing at Boston's, took some time to chat with Sapore and FSR about the menu launch, what it took to get it in stores, and what it will mean for the emerging company.
Talk about the inspiration to bring the Beyond Burger to the menu. How did Boston’s measure the customer demand?
We previously had a Veggie Burger that was quinoa-based. It was great for our Guests looking for a lighter or vegetarian alternative, but we found that offering something that was purely plant-based (Beyond Burger) was even more inclusive. Being able to tout “Beyond Meat” as a brand on our menu is a huge credibility builder for us in this arena. As a brand, we seek to evolve, become more conscious, and prioritize flavor and quality. We found that in a partnership with Beyond Meat that we were able to achieve those things together.
What are some of the challenges, logistically, of adding the product to the menu? How much easier has this become than in year’s past?
Logistically we found the onboarding of this item to be a very smooth process. We tested it for four months before deciding to launch it system-wide, which allowed us to work out the minor kinks (i.e. cook times, build process, etc.). Right now, we’re working to empower our Team Members to educate our Guests who are interested in the product, but maybe on the fence. We’ve had comments that “it’s too much like real meat.” Our Team Members are helping to promote that it’s soy-free, non GMO, and 100 percent plant-based so it’s a really solid alternative to meat if you’re looking for one.
What has been the reaction from franchisees to the move? How excited are they to get started?
The system sees this as an improvement to the prior Veggie Burger, which wasn’t 100 percent vegan, and are excited to be able to serve those guests who have been asking for this of us.
What do you believe the reaction will be? What are the sales expectations, broadly speaking?
When we first introduced it, we had several guest comments expressing excitement. Trends in the U.S. are shifting towards consumers incorporating more and more plant-based meals into their diets and we want to make sure we’re a part of the consideration of places to go to that not only offer but cater to those diets. From a sales perspective, it’s still early but we still outsell this product with our handmade burgers like the MVB (Most Valuable Burger) or our Jalapeno & Onion Straw Burger. The beauty of Beyond Meat in the Beyond Burger is that we can switch the patty out and incorporate into any of our burger builds.
Just talk about some of Boston’s menu changes of late, like the dough-centric rollout. How do you see the Beyond launch fitting into those customer satisfaction goals, and also the brand’s directive to keep costs low for operators?
With putting a larger emphasis on the pizza/pasta sections of our menu, there are more opportunities to lower food costs for our restaurants. We make our dough in-house, by scratch, daily. We’re extremely proud of this work and want to make sure it shines on our menu. It’s also a huge differentiator for us in the casual dining space, so we want to continue to grow our usage of our signature dough. The Beyond Meat products tend to have a higher cost to our restaurant operators, but it’s about menu balance overall for us. We’re going to have some items that are a bit higher in food cost but with great penny profit, and we’re going to have some items that are low food cost and help blend that number altogether lower on the P&Ls.