Tyson Foods Enters the Plant-Based Meat-Alternative Supply Chain

Subscribe to Email Updates

on Jun 28, 2019 9:00:00 AM
Download Now: Implementing a Sustainable Seafood Program!

The biggest meat producer in America, Tyson Foods, is entering the growing plant-based, meat-alternative market, which comes as no surprise to those that follow the stock market. In 2016, Tyson Foods purchased a 5 percent stake in Beyond Meat—an alternative-meat startup whose stock prices have soared since its initial public offering (IPO) on May 2 of this year. In fact, Beyond Meat is the most successful IPO of 2019 thus far—beating out the other two most talked about companies—Uber and Lyft.

On the first day of its IPO, its stock prices rose 163 percent, with initial shares starting at $25 and ending at about $65. In two weeks, they had jumped 250 percent. By June 18, the price had risen by almost 700 percent to $197 per share. Tyson had sold its shares in late April, days before Beyond Meat went public, and before announcing its entry into this burgeoning field.

Keep in mind that, like the other mentioned startups, Beyond Meat has yet to make a profit. In fact, losses in 2018 came in at about $30 million. Despite this, the company is valued at about $5 billion because of investor’s faith in the booming alternative-meat market.

As far as Impossible Foods goes, the other popular player in the meat-alternative arena, they recently announced that there was a shortage of the ingredients that they use to make their plant-based products, and, therefore, may be unable to fulfill some of their customer’s orders.

So, what does Tyson’s entry mean to the other companies such as Beyond Meat and Impossible Foods? Competition…big competition.

After Tyson’s announcement, Beyond Meat’s stock prices dropped as much as 6 percent.

Tyson’s Products

Like Beyond Meat and Impossible Foods, Tyson is aiming for the growing consumer market that are carnivores looking to replace some of their meat-based meals with plant-based alternatives. To this end, in addition to selling vegetarian nuggets that look like fried chicken and are made with ingredients that include pea protein, flaxseed, and bamboo fiber, they will be offering a burger that combines meat and pea protein, as well as sausages and meatballs that combine chicken with chickpeas, black beans, and quinoa. These products will be sold under their new Raised & Rooted brand.

Restaurants and Plant-Based Proteins

Restaurateurs, seeing this developing market, are looking for ways to offer meat-alternatives to their wavering carnivore customers. A few of the well-known restaurants jumping on the meat-alternative bandwagon include Carl’s Jr., Dell Taco, White Castle, Red Robin, and Burger King.

So, how does this differ from vegetarian and vegan restaurants that have been aligned with the plant kingdom for eons? The difference is that these folks are fine eating black beans, sprouts, and vegetables as a main course, whereas the customers that the new meat-alternative industry draw in are those that still want rich, juicy meat—in vegetable form.

While many people are steering away from meat because of health concerns, others are opting for plants because of environmental and humanitarian concerns. This includes greenhouse gas emissions as well as deforestation, overuse of water, and even the development of antibiotic-resistant strains of bacteria due to the widespread use of antibiotics. And, of course, animal cruelty.

Carnivores with these concerns may find their solution in meat that will one day be created in a lab. Called cell-cultured-meat, Memphis Meats is one of the first companies in this odd but interesting segment. In 2016, they developed the first lab-grown meatball. The goal is to replicate the taste and texture of traditional meat that is healthier, may even cost less, and does not require animals. It’s a process that involves painlessly taking meat cells from animals and growing them in a nutrient-rich environment until they become edible meat, eventually, taking animals out of the picture.

The Washington Post reported on Kristopher Gasteratos, founder of the Cellular Agriculture Society, who believes that lab-grown meat will replace 50 percent of the meat consumption around the world by the middle of this century. One day, he believes that all meat will be grown in factories—much to the dismay of the U.S. Cattlemen’s Association.

For now, lab-grown meat will not be finding itself on any restaurant menu. Meat-alternative products, however, definitely are. According to Dining Alliance, meatless alternative sales have jumped 268 percent from 2018 to 2019. Fortunately, for restaurateurs, it seems that the suppliers for these types of products will only be growing. Currently, a few include Beyond Meat, Impossible Foods, Nestlé’s Sweet Earth, Before the Butcher and, of course, Tyson Foods.

Download Now: Implementing a Sustainable Seafood Program!

Topics: Capital, Cost Reduction, food startup

Related Posts