Beyond Meat Got Kicked Off the Menu at Some Tim Hortons Locations
Beyond Meat and fast food have had a love affair this year.
But at least one chain is cooling things down with the meat substitute company. The plant-based sausages that had been used at Tim Hortons across Canada since May will still be available in Ontario and British Columbia, as will the Beyond Meat burger Tim Hortons had been offering since July. But for all other provinces, they’ll only be around “while supplies last,” according to the Le Journal de Montreal, which first reported the news.
Beyond Meat dropped about 3.8% on Wednesday, sliding as low as about 7% at one point, but regained some of those losses Thursday. The stock is up 241% since May when it opened at $46 a share.
While the move is seen as a slight setback, some analysts are still high on the company and its growth potential in the global alternative meat industry. Barclays’ Benjamin Theurer issued an equivalent buy rating on the stock Thursday and a price target of $185.
Theurer sees Beyond Meat reaching 4.5% market share of an industry Barclays estimates will balloon to $140 billion in the next decade. It’s a $14 billion industry in the U.S. now, according to Markets Insider.
He’s just one of two analysts who cover Beyond Meat to remain bullish on the stock while most hold a neutral rating on the company.
When the coffee-and-doughnut chain announced in May it would be serving Beyond Meat options at its stores, it seemed like the next step for Restaurant Brands International—Tim Hortons’ parent company—to deepen its foothold in the alternative meat sector. The company had already partnered with another startup, Impossible Foods, to serve its patties at Burger King, another Restaurant Brands’ unit.
Some experts, however, have questioned the Tim Hortons-Beyond Meat partnership from the start. Sylvain Charlebois, a senior director of the Agri-food Analytics Lab at Dalhousie University, told BNNBloomberg that their visible, close relationship might be limiting to Tim Hortons as more competition enters the space. “The question mark in mind is: Is it a good idea to partner with a company, instead of just looking at a product line?” he said in the interview. “I’m not convinced it’s the right strategy at this point.”
Some experts have also raised concerns about the company moving away from its core products and entering a competitive lunch field already dominated by the likes of McDonald’s, A&W and Restaurant Brand’s own Burger King in Canada.
But it has been Beyond Meat’s ability to partner with these fast-food restaurants that has led to the company’s rapid success. “We forecast Beyond Meat and Impossible Foods will remain the fastest-growing players in the space over the next couple of years, thanks to demand from quick-service restaurants,” analyst Arun Sundaram of CFRA said in a note.
Growing competition, however, could temper growth. Tyson, Hormel, Kroger and Kellogg have or are going to launch their own plant-based protein lines that could make a dent in Beyond Meat’s market share.
The brand has received some pushback in Canada. A recent commercial from A&W featuring Beyond Meat’s patties being eaten by fans of the football team Saskatchewan Roughriders drew complaints from the Saskatchewan Stock Growers Association. The association was concerned that the football team’s brand was being leveraged to advocate for people to stop eating beef in place of the plant-based substitute. The Roughriders distanced themselves from the ad and apologized for “any distress this may have caused,” according to a letter to the association.
Others seem to lament the loss of the vegetarian option and took to Twitter to comment.
Samantha Craggs, a CBC reporter, tweeted, “Please considering occasionally ordering & supporting the non-meat options for the sake of us veggies,” in the wake of the announcement.
Another user, @ScarlettGraceA tweeted, “@TimHortons If you cancel @BeyondMeat products, you will permanently lose my business. It’s time to move forward, not backwards. Do not isolate a growing market that is here to stay. Half the time when I go to Tim’s, they are sold out of beyond meat because it is SO POPULAR.”
In a statement to Fortune, Tim Hortons wrote that it had always viewed the Beyond Meat options as limited-time offerings and haven’t ruled out introducing the products again in the future based on “ongoing guest feedback.”
More must-read stories from Fortune:
—Saudi Aramco is getting what it’s long wanted—perhaps at the expense of its IPO
—Passive investing has exploded. But here’s why fears of a bubble are overblown
—Why the next recession may feel very different than 2008
—Social Security increases in 2020 will be noticeably smaller than this year
—U.S. recession indicators haven’t made up their minds
Don’t miss the daily Term Sheet, Fortune’s newsletter on deals and dealmakers.