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Dunkin' enters the plant-based meat craze by joining forces with Beyond Meat

Dunkin’ is going way beyond donuts in a bid to fatten up its sales.

The donut shop-turned-iced-espresso chain announced Wednesday it has inked a partnership with surging plant-based meat purveyor Beyond Meat. Dunkin’s (DNKN) first product drop with Beyond Meat (BYND) — debuting for a limited-time Wednesday at its Manhattan restaurants – will be the Beyond Sausage Breakfast Sandwich.

Dunkin’ claims it will be the first U.S. restaurant brand to serve a breakfast sandwich featuring Beyond Meat’s faux sausage.

“We absolutely believe this will move the sales needle for us,” Dunkin’ Brands CEO David Hoffmann tells Yahoo Finance. “It’s a damn good product.”

Beyond Meat founder and CEO Ethan Brown tells Yahoo Finance the company is well-equipped operationally to handle the increased demand from a national chain like Dunkin.

The announcement isn’t all that surprising — for a few reasons. First,
Hoffmann pretty much telegraphed the move several months ago in an interview with Yahoo Finance.

Hoffmann told Yahoo Finance on May 3 he was in talks to partner with a plant-based protein player. Hoffmann declined to comment on who that partner would be at the time.

And secondarily, the consumer interest in plant-based meat has gone bonkers — in large part fueled by hype around Beyond Meat’s incredibly successful initial public offering in May. Fast-food chains from Restaurant Brands (QSR) to White Castle to Red Robin have hopped into bed with Beyond Meat rival Impossible Foods for limited-time sandwich offerings to cash in on the craze.

By all accounts, consumer response has been strong to these Impossible products that are often priced at a nice premium to normal menu items.

Meanwhile, the plant-based meat category alone is now worth more than $800 million, with sales up 10% in the past year, according to the Plant Based Foods Association. Refrigerated plant-based meat has seen sales surge 37% in the last year, versus 2% growth for the traditional meat market.

All in all, the marriage between the two companies is a win-win.

Dunkin's new Beyond Sausage Breakfast Sandwich (Photo: Dunkin')
Dunkin's new Beyond Sausage Breakfast Sandwich (Photo: Dunkin')

For Dunkin, it will continue to help shift perception of the brand to one that’s cooler and younger. The Beyond Meat products are likely to be strong initial sellers, too — which sets the stage for a rollout to many more of Dunkin’s 9,400-plus U.S. locations headed into 2020.

As for Beyond Meat, it will get to have its name in a more average American distribution channel — instead of just the refrigerated shelves at Whole Foods. And if Beyond Meat can execute on the supply front with Dunkin’, it will go a long way in proving to larger chains such as McDonald’s it can operationally handle being on the national stage.

Getting on that national stage — and the profit potential that comes with it — is one thing investors in Beyond Meat continue to bet on. The stock is up a savory 170% since IPO day.

Brian Sozzi is an editor-at-large and co-host of The First Trade at Yahoo Finance. Follow him on Twitter @BrianSozzi

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