Beyond Meat and PepsiCo are creating a joint venture to develop snacks and drinks made from plant-based proteins.
The companies didn't reveal what kinds of products they will make Tuesday, saying they're still in development.
But the collaboration sent Beyond Meat's shares to their largest single-day gain since they began trading in 2019, jumping by more than $50 each to $209.17, and dropping down to around $186 by early afternoon.
Shares of PepsiCo. were up just 0.68% at $141 at 1 p.m. EST.
The joint venture gives Pepsi, a giant in both beverages and snack foods, access to one of the leading plant-based food companies at a time when consumers are increasingly cutting back on meat consumption and looking for healthier, more sustainable foods. Beyond Meat's burgers, sausages and chicken, which are made from pea protein, are sold worldwide, including at Starbucks in China and Pizza Hut in the U.S.
Beyond Meat gets access to to Pepsi's enormous distribution system and broad product line. In addition to drinks, Pepsi makes Fritos, Cheetos, Tostitos and Matador beef jerky.
It's a shot in the arm for El Segundo, California-based Beyond Meat, which had been struggling to convince investors of its growth opportunities as competition increased. Beyond Meat shares plunged in November after retail sales growth slowed and McDonald's hinted it might work with another supplier on a new plant-based burger for the U.S. market.
"We look forward to together unlocking new categories and product lines that will inspire positive choices for both people and planet," Ethan Brown, Beyond Meat founder and CEO, said of the PepsiCo deal in statement posted on Twitter on Tuesday.
Plant-based market flourishes
Food companies are increasingly jumping into the plant-based market. In 2019, Chobani introduced coconut milk-based yogurt and Nestle brought out companies producing plant-based burgers and ground meat. Meat giant Tyson Foods, which used to own a stake in Beyond Meat, now has its own line of plant-based meats.
The new partnership "follows longstanding efforts by PepsiCo to help build a more sustainable food system," reports Beef Magazine.
"Plant-based proteins represent an exciting growth opportunity for us, a new frontier in our efforts to build more sustainable food system," Ram Krishnan, PepsiCo's global chief commercial officer, said in a statement.
Financial terms of the deal weren't released. The joint venture will be managed through a new entity called the Planet Partnership.