U.S. meat company invests in alternative protein products

Plant-based proteins and meats cultured from animal cells in a laboratory are gaining more attention and Tyson spokesperson Justin Ransom argued these products may help feed a swelling global population expected to hit nine billion by 2050. | Reuters photo

HOUSTON, Texas — Major meat companies including Tyson Foods are investing in alternative protein production.

Plant-based proteins and meats cultured from animal cells in a laboratory are gaining more attention and Tyson spokesperson Justin Ransom argued these products may help feed a swelling global population expected to hit nine billion by 2050.

“Unless you have a better idea than I, I am not sure how we could feed an extra two billion people more protein,” he said at the International Livestock Congress held in Houston, Texas, Feb. 27-28.

The company wants to offer choice.

Two years ago, it set up Tyson Ventures, a US$150 million fund to invest in brands and products with potential to grow. Alternative proteins and new technologies are among the venture interests.

The Bill and Melinda Gates Foundation, Cargill and Tysons are involved in supporting the technology and making affordable meat alternatives. Venture capital funding has increased for technology to develop alternatives like dairy and meat substitutes, insect and algae protein, animal-free gelatin or drinkable meals.

About 100 companies are trying to figure out this new food technology.

“The future is here and we’ve got to figure out how to deal with it,” he said.

People need to feel good about what they are consuming and may be looking for certain attributes whether it is taste or ethical considerations.

“As we move into this phase, it is important to think how these products meet the needs of consumers today where it is perceived the products we are currently making are not meeting,” he said.

“The fact that someone would eat a lab-grown meat and they won’t eat regular meat is mind-boggling to most of us,” he said.

Tyson has invested in Beyond Meat, Memphis Meats, and it has also put money into blockchain traceability company FoodLogiQ and smart oven company Tovala.

Tyson’s suppliers need to understand this is a long-term play and animal protein production is not likely to decline in the United States over the next 30 years. Tyson is still a meat company and plans to process 2.3 billion birds in 2019.

“We are trying to capture the market where it is growing,” he said.

“If we can make money on plant-based protein we would be stupid not to grow it.”

The company will probably buy established brands rather than start its own alternative division, he said.

“Tyson’s is committed to animal protein. We are one of the largest animal protein companies in the world. In the United States, one out of five pounds of protein comes from Tyson Foods and we want to grow that,” he said.

There is controversy and excitement over these products, said food analyst Don Close of Rabo AgriFinance.

“I will give Tyson a lot of credit. They are going out on a limb,” he said.

Consumers are driving the way companies do business but the debate about these products could heat up in the future.

Alternative products are not making money now but they are not going away. However, Close questions demand.

Two to three percent of the population declares itself vegan but for the last two decades, there has been record global growth in protein production and consumption.

“Somebody is lying. You don’t increase production and consumption at that rate of speed but lose mega slices of your market to non-meat eaters,” he said.

“The champions of those products are absolutely convinced the consumers of those products are going to be the high income millenial crowd. I think those youthful consumers are so fickle, as soon as the novelty wears off those products, that group of consumers will be off on the newest and greatest thing,” he said.

The real growth for alternative proteins could be among the emerging middle class consumers of China and Southeast Asia where annual growth could be six to seven percent.

Michael Uetz, consumer analyst with the Chicago company Midan Marketing, said the quality of the products is improving and more companies are emerging.

“These companies are increasing and are incredibly well-financed and these people are passionate about what they do. They feel they are going to change the world,” Uetz said.

“It is a product we need to learn to co-exist with.”

If there are more than nine billion people by 2050, animal protein probably cannot meet the need because of livestock production requirements and land constraints.

In addition, younger consumers are challenging meat purchases and consumption. About a third say they are adding plant-based protein into their diets, however they may not understand much about protein content.

“They look at plant-based as relevant as animal-based protein,” he said.

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