Recent investments by Tyson Foods Inc. in alternative protein companies reflect its commitment to meeting consumer demands, the Springdale company says, and consumers want protein in a variety of forms.
Industry observers say it’s just good business.
“Protein is what’s growing,” said Justin Whitmore, Tyson’s chief sustainability officer, in an interview with Bloomberg. “If there’s a form of protein out there that is being consumed, we plan to be a part of it. We’re going to continue to invest in chicken and pork and beef. However, growth in protein comes in a variety of forms and we plan to participate in that.”
That explains Tyson’s investment in the vegan company Beyond Meat of El Segundo, California. Tyson bought a 5 percent stake in Beyond Meat, which makes plant-based burgers, in 2016 and increased its bet in late 2017.
And it explains Tyson’s move this year — through its venture capital arm, Tyson Ventures — to take a minority stake in Memphis Meats of San Francisco, which grows meat from animal cells.
Consumers are spending big on non-meat proteins. The Wall Street Journal cited research by Euromonitor International that American retail sales of non-meat proteins increased to $700 million in 2016. Global vegan food sales reached nearly $10 billion in 2016 and could hit nearly $12 billion by 2021.
“Understanding that is just business,” said Marty Matlock, a professor at the University of Arkansas at Fayetteville. “Being more sustainable is just good business.”
Although Tyson didn’t reveal the size of its investments in Beyond Meat and Memphis Meats, they’re no doubt dwarfed by its purchase of Hillshire Brands for $8.5 billion in 2014 and AdvancePierre Foods Holdings Inc. for $4.2 billion in 2017. And Tyson’s earning power — in November it reported income of $1.77 billion for fiscal 2017 — relies heavily on chicken, beef and pork.
Tyson’s original investment in Beyond Meat raised some eyebrows. Beyond Meat CEO and founder Ethan Brown said in 2017 that neither company would or could change the other, but they agreed on the need for sustainable protein for the expanding world population.
“Instead, we both intend to serve the changing consumer,” Brown said.
A Matter of Strategy
Matlock is the executive director of the office of sustainability at the university and part of a team recently announced to be researching sustainability practices in the beef industry. Matlock has worked with Tyson on similar studies of poultry and pork.
Matlock said that plant-based burgers hold more promise than the cell-produced meat of Memphis Meats.
“I can’t speak to their motives, but I can predict their outcomes,” Matlock said. “If I’m putting money on the barrelhead for one or the other, I’m putting it on the plant-based because it’s a great idea. They are very serious. Of all the animal proteins I’ve talked about, Tyson folks have been in the room helping motivate and engage.
“They and their colleagues are trying to create a common, noncompetitive global strategy for improving impact and efficiencies. Plant-based products are just good strategy.”
Matlock said his chili recipe has repeatedly won his department’s annual chili cook-off because it’s vegetarian. Half of the students in the department are Indian and don’t eat beef.
“Of the 2½ more billion people coming to dinner in the next 40 years, half of them are coming from places that don’t eat meat,” Matlock said.
Matlock said Tyson is wise to invest in new technology and food innovation companies, but the best meat-producing system is harvesting raised livestock. The responsibility requires studying how to make it more sustainable and less harmful to the environment, he said.
“My general impression is those are interesting things to explore, but evolution has given us a very effective way to produce proteins from grass, and that’s through animal production,” Matlock said. “It’s really hard for us to beat evolution. The thing we do with animal agriculture is pretty miraculous, especially with ruminants that eat material that we have no digestibility of. They can make it into high-quality, high-density, nutritious food for us.”
Plant Alternatives
Michele Simon is taking a wait-and-see approach to Tyson’s investment relationship with Beyond Meat.
Simon, the executive director of the Plant-Based Foods Association of San Francisco, hopes Tyson’s interest in alternative protein sources is legitimate. She said studies have shown that more consumers are looking for meat substitutes, mostly for health benefits.
“They’re looking to reduce their meat consumption, and companies like Beyond Meat are really at the forefront of trying to offer really great tasting alternatives,” Simon said.
“What this demonstrates is that meat companies are seeing the handwriting on the wall,” she added. “We certainly know that industrial meat production is one of the least sustainable forms of agriculture on the planet. I think it is a sign that they don’t want to be left behind and they realize this is a part of a shifting landscape they want to participate in.”
Simon said Tyson isn’t the only major meat company that has invested in plant-based companies. Companies like Cargill of Minnesota and Canada’s Maple Leaf Foods are other examples, bringing higher visibility and more resources to the plant-based food movement.
“No question it is a positive sign for the most part,” Simon said. “I also think it’s not 100 percent clear what the long-term game plan is for Tyson. Let’s face it, it’s still probably 99.9 percent a company of conventional meat. That’s not going to change any time soon. I think there are still some questions about how dedicated Tyson is to changing its way.”
Simon said if Tyson doesn’t reduce its meat production by the same amount it increases its non-meat investment or production, then nothing has really changed. She’s fine with the company diversifying its investment portfolio, but that doesn’t change what Simon sees as a disastrous environmental effect of industrial meat production.
“It’s crazy that we grow these crops and use all of this land to grow animals when it would be so much more efficient for humans to eat plants directly,” Simon said. “It is an extremely inefficient system, especially beef production, which takes up so many natural resources and it is simply not sustainable on a global scale.
“I think the meat industry in general has done a pretty good job at brainwashing, frankly, the American public into thinking that meat is the only source of protein or the best source of protein when it is simply not true from a scientific standpoint. Plant-based proteins are even better because they come with other nutrients. The meat industry has gotten people to equate meat with protein.”
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