Beyond Meat Inc. plant burgers, Beyond Burger, are cooked on a pan.
Yuriko Nakao | Getty Images
Beyond Meat and PepsiCo announced on Tuesday that they have formed a joint venture to create, produce and market snacks and beverages with herbal substitutes.
Beyond shares rose up 16% in premarket trading on the news, while Pepsi shares rose 1%.
The partnership offers Beyond, a relatively newcomer to the food world, the chance to capitalize on Pepsi’s experience in production and marketing for new products. In turn, Pepsi can deepen its investments in plant categories, which are growing more and more, while working with one of the best creators of meat substitutes.
Beyond Meat controls about 13% of the US meat alternatives, according to Jefferies estimates.
“PepsiCo is the ideal partner for us in this exciting endeavor, one of global coverage and importance,” said Ethan Brown, CEO of Beyond Meat, in a statement.
The operations will be managed by a limited liability company called the PLANeT Partnership. Financial conditions were not disclosed.
The partnership also helps Pepsi achieve its sustainability goals. Last year, the company signed the United Nations commitment to commit to setting science-based emissions reduction targets. A 2019 UN report found that the food system contributes to 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 stock is roughly flat in the last year, giving it a market value of $ 196 billion. The food and beverage giant recorded higher sales during the pandemic, due to lower consumer storage and exposure to occasions outside the home than its rival Coca-Cola.
At Monday’s close, Beyond shares have risen more than 32 percent in the past year, despite the coronavirus pandemic, which has affected restaurant sales. The company has a market value of $ 9.95 billion.