McDonald’s McPlant burger made with Beyond Meat sold better than expected, analyst says

McDonald's McPlant burger is more popular than expected according to Michael Lavery.

In December, participating locations sold roughly 70 of the plant-based burgers it created with Beyond Meat per location every day in the chain's initial small test of the menu item.

The fast-food giant began testing the McPlant burger in just eight restaurants to get a sense of how it would impact its operations. The test will be expanded to about 600 restaurants in the San Francisco Bay and Dallas-Fort Worth areas.

In a note to clients on Tuesday, Lavery wrote that test locations were selling more McPlant burgers than he had anticipated. An average McDonald's restaurant sells about 120 Big Macs per day.

Even with a small sample size, Lavery said that early interest and willingness to try the product may be greater than expected. The McPlant boosted Beyond's U.S. revenue by up to $100 million.

While we believe test stores likely received a lift from exclusivity (drawing some sales from nearby stores that did not offer it), and that sustainable, repeat sales will settle in at a much lower rate, initial McPlant sales could prove to be closer to 10% of burger.

A nationwide launch of the McPlant burger is a huge opportunity for Beyond Meat to impress consumers with its meat substitute, in addition to the revenue lift just from sales to McDonald's. The company is struggling with competition and falling U.S. grocery sales, according to Wall Street analysts.

Beyond's stock was up 3% in premarket trading on Wednesday, while McDonald's stock was up 1%. The market value of Beyond has fallen by more than half over the last year. McDonald's stock increased in value in the same time, bringing its market value to $195 billion.