Why is Tyson Foods buying a stake in a vegan start up?
As a part of a developing plant-based food industry, meat-processing behemoth Tyson Foods acquired a 5 percent stake in a company specializing in vegan meat substitutes.
Tyson Foods, the largest US-based meat processor, has become the first major meat company to invest in an alternative meat manufacturer.
In a recent announcement, well-known chicken producer Tyson Foods made public their purchase last week of a 5 percent stake in Beyond Meat, based in El Segundo, Calif., a company that makes faux meat products from plant-based sources such as peas and soy.
While the terms of the deal have not yet been disclosed, other financing came from sources including the Humane Society of the United States, who had also previously invested in the vegan food company, as well as billionaire Microsoft founder Bill Gates, and venture capital firm Kleiner Perkins Caufield and Byers.
Beyond Meat, which this year began selling their plant-protein burger substitute known as the Beyond Burger, has already achieved a strong degree of success, raising more than $17 million from investors in 2015. The company’s goal is to further move plant-based meat substitutes into the mainstream market, something Tyson Foods enthusiastically supports.
“We think [the Beyond Burger is] a game-changing product that gives us exposure to this fast-growing part of the food business,” Monica McGurk, Tyson Food’s president of strategy and new ventures, told The New York Times.
While there currently are no plans to use Tyson’s extensive production facilities to further grow the Beyond Meat product line, the relationship is still in its infancy, with a great deal of room for development. “The investment for us is not about an either-or choice, it’s about the ‘and,’ ” said Ms. McGurk. “This is just another form for consumers to enjoy protein as part of their daily diet.”
The plant-based food and beverage market has been growing at such a speed that it recently began outpacing the total food and beverage industry as a whole, bringing in nearly $5 billion in sales in the United States so far this year, reports Food Business News.
“We’ve got to stop calling it the natural food industry,” said Errol Schweizer, a former Whole Foods executive who was quoted by Fortune as an industry adviser. “It’s just the food industry now.”
Other companies have made similar decisions in recent history. In February, agriculture giant Archer Daniels Midland, a major producer of corn, oilseeds, wheat, and cocoa, acquired Harvest Innovations – a soy protein company that specializes in plant-based oils and gluten-free ingredients.
Also Danone, based in France and known for its popular Dannon brand yogurt, acquired organic and plant-based dairy alternative manufacturer WhiteWave in a deal worth $12.5 billion.
But the Tyson deal is the first to include a major US-based traditional meat producer acquiring shares of a plant-based company, according to Michele Simon, executive director of the Plant Based Foods Association. Tyson, which also produces Jimmy Dean sausages and Ball Park hot dogs, is also the largest supplier of pepperoni and pizza toppings to the food industry, according to Bloomberg.
“The question in my mind with these acquisitions is always why they’re being done,” Ms. Simon told The New York Times. “The most positive view is that this means the meat industry is shifting away from animal meat to plant-based meat, but I don’t think we know that’s the case yet – it could also be a way of distracting attention from their industrial meat business.”
While the chief executive officer and founder of Beyond Meat understands the nature of the criticism his recent deal with Tyson Foods has brought from those who eschew meat products, he feels it is a step in the right direction toward introducing a broader segment of the population to the appeal of plant-based products.
“I’m hoping… that [vegetarians and vegans] will see this as part of a deliberate course of action to get out of the penalty box that’s the ‘alternative’ section in the supermarket and get into a mainstream discussion with the consumer,” Mr. Brown said to The New York Times.