McDonald's Corp. announced Monday that it will be introducing its own line of faux meat, starting with a substitute burger.
The world's biggest restaurant company said its new McPlant line of products could eventually include plant-based chicken and meat for breakfast sandwiches. It will be "crafted exclusively for McDonald's by McDonald's," International President Ian Borden said. Some markets will test the burger next year.
Also Monday, McDonald's reported that its U.S. sales roared back in the third quarter with new menu items and attention-grabbing celebrity collaborations.
And the burger giant says more is coming. In a virtual meeting for investors Monday, McDonald's said a much-anticipated crispy chicken sandwich with pickles -- an answer to competitors like Popeye's and Chick-fil-A -- will go on sale in the U.S. early next year.
McDonald's wouldn't say who might supply the plant-based burger, or whether it will be made using peas or soy or some other main ingredient. McDonald's tested pea protein-based patties from California-based Beyond Meat at Canadian restaurants earlier this year, but it ended the trial in April.
The announcement upends what had been an emerging duopoly in the faux-meat world, with Beyond Meat and closely held Impossible Foods competing as the two premier makers of plant-based burgers and sausages. As the companies have rolled out their products in major restaurant and grocery chains, McDonald's, with its 39,000 locations worldwide, was long seen as a potential crown jewel for plant-based meat producers.
McDonald's didn't specify the markets where it plans to sell McPlant products. When asked about timing, Chief Executive Officer Chris Kempczinski said on the call that "the exact pace of that is going to be dictated, as it always is, by the customer demand."
Kempczinski has given plenty of clues into his vision for the fast-food giant since he took the helm a year ago, including creating in January an entirely new executive position to oversee digital customer engagement. He's also rolled out limited-edition celebrity meals featuring rapper Travis Scott and Colombian singer J Balvin in the company's home market and tested trendy items, including spicy chicken nuggets, to fuel a return to U.S. growth.
McDonald's said digital ordering -- through mobile orders, in-store kiosks and delivery -- is expected to make up 20% of systemwide sales this year, or more than $10 billion. The company hopes to build on that with a new app, MyMcDonald's, which will be launched in six markets by the end of 2021. The app will let customers participate in a new loyalty program and get targeted dining offers. It's designed to make it easier to order, whether for carryout or delivery.
McDonald's cut menu items, including all-day breakfast, to make it easier and faster to fill orders during the pandemic. Even as sales improve, the company said, it wants to be careful about how much complexity it's adding. It also plans to emphasize its core products -- beef, chicken and fries -- which make up 70% of its sales.
"We're going to be thoughtful and judicious as we add back to our menu," said Joe Erlinger, McDonald's U.S. president.
McDonald's U.S. same-store sales -- or sales at locations open at least a year -- jumped 4.6% in the third quarter, the company reported. Customer traffic fell, but when diners came, they spent more on larger group orders. Dinner was particularly strong, McDonald's said, but other times of day were elevated as well.
Third quarter net income rose 10% to $1.8 billion. Earnings, adjusted for one-time items, were $2.22 per share.
That surpassed Wall Street's expectations of $1.91 per share, according to analysts polled by FactSet.
Revenue fell 2% to $5.4 billion. That was in line with expectations.
Shares of the Chicago company fell 1.54% to close at $213.22 in Monday trading.
Information for this article was contributed by Dee-Ann Durbin of The Associated Press, by Anne Riley Moffat of Bloomberg News.