PepsiCo Inc and Beyond Meat Inc said on Tuesday they would form a joint venture to develop and sell snacks and beverages made from plant-based protein.
Beyond Meat's shares, which gained about 65% last year, were up 22.4% in premarket trading, while those of PepsiCo were up 1%.
Plant-based meat alternatives, such as burger patties and sausages from Beyond Meat, have gained in popularity in recent years as curious health-conscious consumers look to broaden or shift from chicken, pork and beef-based diets.
Beyond Meat suffered a surprise loss in its last reported quarter as demand for its products at restaurants and grocery stores tapered after an initial surge at the start of the COVID-19 pandemic.
The new partnership with PepsiCo will give the faux meat maker access to the beverage giant's distribution and marketing resources and allow it to expand into new product lines, Beyond Meat Chief Executive Officer Ethan Brown said.
PepsiCo, which apart from its namesake soda owns the Lays, Quaker and Gatorade brands, has also been looking to expand its portfolio of health-focused snacks and beverages.
"Plant-based proteins represent an exciting growth opportunity for us, a new frontier in our efforts to build a more sustainable food system," said Ram Krishnan, PepsiCo global chief commercial officer.