Food & Beverage

Analyst: McPlant selling better than expected for McDonald's

Provided

January 27, 2022

McDonald's McPlant is selling better than expected, a senior analyst told CNBC.

Piper Sandler analyst Michael Lavery said the company is selling about three times more plant-based burgers than he expected.

"While we believe test stores likely received a lift from exclusivity (drawing some sales from nearby stores that did not offer it), and that sustainable, repeat sales will settle in at a much lower rate; initial McPlant sales could prove to be closer to 8% to 10% of burger sales, or $170 million to $215 million (annualized)," Lavery wrote in a note to clients.

He said test locations were selling three times more plant-based McPlants than he originally thought.

McDonald's will expand the test launch of the McPlant to include about 600 Dallas and San Francisco locations after an initial run in eight markets last year. The McPlant was created with Beyond Meat.