Beyond Meat CEO Ethan Brown on Tuesday sought to clear the air on his company's relationship with McDonald's after shares tanked the day prior on news of the restaurant chain's forthcoming plant-based line.
Beyond Meat investors reacted negatively when the meatless food maker was not named as a supplier for McDonald's "McPlant" burgers, sending the stock down nearly double digits at its lows Monday.
The stock recovered much of those losses after Beyond implied it is behind the product line, though the verdict remains out and Brown is walking that suggestion back.
"I believe our relationship with McDonald's is very strong. We're involved with McDonald's on a number of different fronts. We're doing things now to prepare for things in the future that involve McDonald's," he told CNBC's Jim Cramer on "Mad Money." "I just can't go out and speak for the company as to which supplier they've chosen or who they're going to be working with."
McDonald's said it plans to test a meat-free burger in select restaurants next year as it seeks to list plant-based foods on its menu. The McPlant brand could also include chicken substitutes in the future, but the company did not say who it would work with on the products.
In the third quarter last year, the Golden Arches began testing a plant-based burger using Beyond Meat patties in Canada. McDonald's put the project to rest in April 2020 and has not revealed any plans to revive the burger. Former McDonald's CEO Don Thompson is a board member for Beyond Meat.
Investors who sold the stock worried that McDonald's could be competing with Beyond Meat instead of providing the company with a major growth opportunity, one analyst said.
In the interview with Brown, Cramer questioned the chief executive on the possibility that McDonald's could source its alternative-meat products from the likes of Tyson Foods or Nestle, the maker of the Awesome Burger.
"Everything I'm seeing, you know, all the investment we're making here, the scaling we're doing here, would suggest that the relationship there is really strong, and that's really all I can say," Brown said. "The key for us is to not get ahead of those partners. Let's let them make the announcements."
Elsewhere in the restaurant space, Pizza Hut, a Yum Brands property, said it began marketing plant-based sausage items in the U.S. provided by Beyond Meat. The company in the past had tested a product with substitutes from Kellogg.
Beyond Meat also supplies Subway, KFC and Taco Bell in China, Brown highlighted. The company also has products in grocery stores such as Walmart and Whole Foods.
Shares of Beyond shed nearly 17% more in value on Tuesday after the company posted a disappointing earnings report after the bell Monday, citing a drop in demand for plant-based food at restaurants in the third quarter.
Brown linked it to the unpredictability of the coronavirus pandemic.
"I'm very optimistic about the future," he said.
Despite two big days of losses, Beyond shares remain up 65% year to date, closing Tuesday's session at $125.01.