Tyson on alt-meat: We're going in big
It’s one of the hottest topics in the food space right now: alternative meat.
Whatever people call it — plant-based meat, alternative meat or even fake meat —the trend is here to stay, according to Tyson Foods (TSN).
“We’re going to go big [on alternative meat], using our size and market access. We’re going to be able to bring the best of health and taste together just by virtue of our scale,” Justin Whitmore, Tyson executive vice president of alternative proteins and chief sustainability officer, told Yahoo Finance in an interview.
Tyson Foods released its Tyson Foods 2019 Summer Trends Report on Wednesday, and in it, the company outlined 8 new food trends expected to shake up the industry. On the top of the list: alternative meat. “The numbers reflect the interest: the alternative protein segment is growing double digits. This is clearly a trend that is not going away,” the report stated.
Ever since Beyond Meat (BYND) hit the scene, Wall Street and mainstream investors alike can’t keep up with the way in which its shares have skyrocketed since its IPO in early May. After pricing at $25 per share, the stock has rallied 502% as of Tuesday’s closing price.
Tyson was an early investor in Beyond Meat before selling its 6.5% stake in the company shortly before Beyond’s public debut. Tyson strategically shed its stake in order to launch its own line of alternative meat products. Earlier this month, the largest meat processor in the U.S. announced its two new Raised & Rooted brand products: a blended burger and plant-based nuggets. They are slated to hit store shelves in the fall.
Alternative protein hype
Beyond Meat, Impossible Foods and Nestle are only a few of the companies that are also looking to capitalize on the alternative protein hype. “Well there are over 100 different brands out there, and all of them with unique characteristics. We had to think about how we’re different - the supply chain. The full supply chain from farm to fork, we’ll have products that are available,” Whitmore said.
While smaller alt-meat companies have been struggling to meet demand, Tyson is a legacy food company. “Tyson is the largest food company in the U.S. and with that comes unrivaled network,” Whitmore explained.
Whitmore pointed out that Tyson also has a cost advantage due to its supply chain. “Relative to other players, we have a significant proportion of operational cost already built. We don’t need to create new plants, new distribution networks, new refrigeration capabilities. We will be able to come into the market with prices that will look and feel different than what other people have.”
Targeting meat eaters
However, much like Beyond Meat, Tyson is also looking to target not just vegetarians and vegans, but meat eaters as well. “We’re going to be targeting people who like eating meat and people who plan to continue eating meat,” Whitmore said. “The people that are driving the growth in alternative proteins are meat eaters. Roughly three fourths of the population are either adding or open to adding protein based items to diets.”
Beyond Meat reported in its first ever earnings report earlier this month, and in the report the company said that more than half of its total revenue came from sales to restaurants and food services. The partnerships with Carl’s Jr, Del Taco (TACO) and other restaurants is critical for future growth. Recently, ever big restaurant and grocery company is being asked about whether or not they will be carrying alternative meats on their shelves and in their stores. Tyson is no exception. According to Whitmore, Tyson is also in active conversations within the restaurant and food services industry.
“I think that the fact that Tyson Foods is jumping in with investment like this and with excitement to plant-based protein is a signal about how Tyson foods is thinking about food overall,” Whitmore said.
Alternative meat isn’t the only hot trend of the summer, though. According to Tyson’s report, robots, side dishes taking center stage, and environmentally sustainable foods are also up and coming.
“Trends are so important to us, given that our focus is on growth and our starting place is our consumer,” Jen Bentz, Tyson’s senior vice president of R&D, said to Yahoo Finance. “We take a step back constantly, and we focus on the consumer. Food, it’s not just what we do, it’s our passion. Understanding these trends is step one for us.”
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Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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