The last two collaborators in the food industry may be meat producers and plant-based meat alternative firms. Not anymore. In early October, Tyson Foods, the largest US meat company by sales, announced that it had taken a 5% stake in Beyond Meat, one of the pioneering plant-based alternatives on the market. The move has made waves in the food industry and drawn ambiguous responses from the public. Hardcore vegans and vegetarians think that Beyond Meat has sold out while those looking at the bigger picture welcome the investment as a step in the right direction for more similar collaborations to come.
Long-established food producers investing in their ‘competitors’ may seem at odds with the nature of their businesses. However, Tyson buying stakes in Beyond Meat is not the first of its kind in the food industry. Back in July, Danone, one of the world’s largest dairy companies, struck a US$12.5bn deal to acquire WhiteWave Foods on the grounds that they would like to own both premium dairy products and non-dairy ones in light of the evolving consumer taste. Tyson also sees the need to ride on the wave of plant-based food, saying “investing in plant-based protein would help the company meet consumer demand for more choice and keep tabs on innovations.” Monica McGurk, Senior Vice President in charge of strategy and new ventures of Tyson, echoes the same view, describing Beyond Meat as “a game-changing product that gives us exposure to this fast-growing part of the food business.”
Apparently, Tyson Foods has kept itself abreast of the latest food trends. Eric Schmidt, Executive Chairman of Google parent company, Alphabet, said that “the alternative protein sector is among the top six most important innovation trends in 2016.” As more and more consumers become aware of the devastating effects of meat on the environment and on their health, they will embrace plant-based meat alternatives as part of their diet. It has been found that meat consumption in the US has hit a 24-year low while Canadian consumption of beef and pork has dropped by a quarter since 1999. Mintel Group finds that there has been a 189% increase in new products making a vegan claim in the past five years in Canada and a 31% increase for those making a vegetarian claim. Search interest in the term “vegan” increased 32% in the US from 2014 to 2015. All these figures point to one crystal clear fact – a surging number of people cut down on meat and embrace plant-based foods with open arms.
Despite accusations of “making a deal with your enemy”, Beyond Meat CEO Ethan Brown projects the investment in a positive light, saying “the financial stake of Tyson in Beyond Meat creates opportunities for the two companies to work together and to have an influence in Tyson.” In fact, with Tyson’s investment, Beyond Meat is expanding the Manhattan Beach Project, its research and development program which focuses on understanding animal meat better down on the most minuscule level so that they can replicate it entirely from plants.
The aspirations of Beyond Meat may be within its arm’s reach, with the creation of Beyond Burger. It has always been part of their plan to take plant-based meat mainstream. That is why Beyond Burger, their ground-breaking product made from pea protein that sizzles and ‘bleeds’ like real beef, is sold alongside meat at Whole Foods. Ever since its debut, leading media outlets and critics have raved about it and even carnivores are receptive of the plant-based burger patties that taste not much different from the real thing.
In addition to the evolving consumer taste, governmental regulations may also work to the advantage of plant-based alternatives. If governments impose a carbon/climate tax, the meat industry will be dealt a heavy blow. Evan Fraser, director of the Food Institute at Guelph University, said, “the meat industry is going to have to embrace change if it is going to survive existing demographic, political and environmental forces.” And Tyson’s investment in Beyond Meat exemplifies just that.
As Ethan Brown writes on the official website of Beyond Meat, “Tyson and I can–and do—agree on many other things including: the need for sustainable protein for a growing global population; that innovation can fuel growth and profit; and that business best serves the consumer by offering choice.” As the world’s population is projected to reach 9 billion by 2050, no company can single-handedly solve the potential food shortage and climate change problems. However, companies, however different their businesses, can synchronize their visions based on their strengths to work together for a more sustainable future.