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McDonald’s New Menu Item Looks Like a McFailure

And it could put the fast-food giant in a weird place.

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This article was originally published by https://www.thestreet.com/investing/mcdonalds-market-test-flop

And it could put the fast-food giant in a weird place.

While McDonald's  (MCD) - Get McDonald's Corporation Report is not typically known for its off-the-wall innovations in the fast food space, is it known for dishing up long-standing classics.

Take its Big Mac, for instance. 

It doesn't seem terribly revolutionary to stuff an extra piece of bread in the middle of a burger today, but when it debuted in 1967, it was so iconic that it even spawned a nickname as a point of currency comparison: The Big Mac index.

McDonald's has embraced its all-American classic identity, and it's worked well for decades. But it's also noteworthy to see how it has adapted as people's needs have changed, like how it reacted to the criticism leveled at it when the film "Super Size Me" targeted its practices back in 2004.

Today McDonald's is grappling with a new ask from its consumers: not only healthier food, but plant-based options, too. And while its past efforts at healthier offerings, like Salad Shakers and the McLean, didn't really connect, it's unlike the chain not to at least give it the old college try.

Unfortunately, its latest effort is stalling before even truly getting off the ground.

McDonald's/TheStreet

This Healthier Option Is Not Getting Great Reviews

Ever since the debut of the Impossible Whopper back in 2019 at Burger King  (QSR) - Get Restaurant Brands International Inc. Report, a string of plant-based alternatives to meat have been popping up across both fast food and dine-in restaurants alike.

The plant-based alternatives market is growing at a rapid pace, showing that consumers are most certainly interested in consuming less meat and dairy.

McDonald's began testing its own offering, a burger called the McPlant created in partnership with Beyond Meat  (BYND) - Get Beyond Meat Inc. Report as part of a three-year deal, back in 2021.

It started with an initial test across eight locations, including Irving and Carrollton, Texas, Cedar Falls, Iowa, Jennings and Lake Charles, La. and El Segundo and Manhattan Beach, Calif.

The burger did well enough in the smaller market test that McDonald's decided to expand the next phase to 200 of its restaurants. This is where it suffered with more rural areas like East Texas, which often sold only three or four a day. The McPlant performed better on the whole in bigger cities like San Francisco and Dallas/Fort Worth, but still didn't meet its initial sales goals.

BTIG analysts Peter Saleh and Ben Parente said in a report released on June 16 that they don't expect McDonald's to roll out McPlant nationwide in 2022, Restaurant Dive reports

Instead they predict that the chain will tweak its marketing strategy and potentially even change the price in an effort to interest more people in the product.

"For McPlant to be more ubiquitous, the price point needs to be more competitive with traditional burgers, and the health and climate benefits need to have greater emphasis," the report says.

While the cost of a McPlant can vary based on location, it currently retails for somewhere between $5 and $7 at most locations it is sold at.

Beyond Meat's shares dropped in the afternoon after the BTIG report.

On the other hand, McPlant has fared much better in the UK, with the nationwide rollout announced back in January. 

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