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McDonald's Is Testing a Plant-Based Burger. It's Going to Fail.

Beyond Meat (NASDAQ: BYND) has done an excellent job elevating what used to be called the "veggie burger." The company has literally changed how consumers see plant-based meats, and it is working toward changing the definition of meat itself.

The company's executive chairman Seth Goldman wants grocery stores to shelve its products next to animal-based meats, focusing on the end result rather than the source. That once seemed improbable, but it's happening now, largely because Beyond Meat has delivered an animal-based burger patty that looks and smells (mostly) like its cow-based "cousin."

That effort bodes well for the long-term success of Beyond Meat. It could become a grocery store staple in the way that almond and soy milk now sit on grocery shelves next to dairy milk.

Success in grocery, however, is different than success in fast food. Beyond Meat and its rivals have managed to get on menus at various chains, with the latest coup being a deal for McDonald's (NYSE: MCD) to test a plant-based sandwich in Canada using Beyond's burger. It's a noble experiment, but history says it will fail.

An ad for the new McDonald's Beyond Meat burger.

The new plant-based burger is getting a very limited test run. Image source: McDonald's.

McDonald's isn't for the health-conscious

McDonald's would love for its test of what it's calling the "the P.L.T." (for plant, lettuce, and tomato) to succeed. The chain will test the new sandwich for 12 weeks in 28 restaurants in southwestern Ontario, starting Sept. 30, according to a press release. That's a small test in a pretty obscure market. The company is doing that because it has decades of experience where consumers ignore healthier options on its menu. And while it wants this to work, it knows it probably won’t.

People who visit fast-food chains generally want a full-on fast food experience. They're not looking for healthy options, because they already view the meal as an indulgence or an earned cheat. That's why various efforts to offer more healthy products have generally not been successful.

Very few people go to McDonald's for a salad. That's why the company backed away from some of its healthier menu items -- they did not sell at the same scale, so the chain quietly dropped them. Salads seem like a reasonable option, but former CEO Don Thompson acknowledged they only accounted for 2%-3% of sales back in 2013, according to The Wall Street Journal.

McDonald's has tried salads, wraps, and apple slices instead of fries, and none of those things has worked because consumers looking for a healthy meal tend to eat elsewhere. They only appeal to people who have to eat at the chain but don't want to.

You can't build a hit product on customers forced to eat at your restaurant because it's the only one open at the airport or because they're giving in to their kids. A plant-based burger, like salads, is at best a niche item that scores the company points with activists but consumers mostly ignore, the same way kids given a choice opt for fries over apple slices nearly every time.

Be what you are

McDonald's has to worry about its image. It offers a menu full of unhealthy choices that, if eaten regularly, have a negative impact on your health. The company has to pretend to care about that by offering alternatives, even while it fully understands what consumers actually want.

Offering a plant-based burger option is essentially a public relations move. That company will try hard -- and Beyond Meat does offer a credible product that smells and tastes like a cow-based hamburger -- but ultimately this sandwich will be a tiny seller (if it ever makes it beyond the test phase).

"McDonald's has a proud legacy of fun, delicious and crave-able food -- and now, we're extending that to a test of a juicy, plant-based burger," said McDonald's VP of Global Menu Strategy Ann Wahlgren in the press release. "We've been working on our recipe and now we're ready to hear feedback from our customers."

That's a carefully worded way to say, "Hey, this isn't bad and we hope people buy it, but we know it's almost certainly a novelty at best." Wahlgren may dispute that, but history says that consumers want McDonald's to pay lip service to offering healthier items while they order McNuggets, fries, and Big Macs.

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Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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