Meanwhile JBS, the biggest meatpacker in the world, is considering a spinoff solely focused on plant-based meat. Marfrig Global Foods, another behemoth based in Brazil, is also reshuffling executives and drafting new strategies in the space that includes a partnership with crop trader Archer-Daniels-Midland.
Tyson’s Ervin said that 17% of all consumers will never reduce meat consumption, and on the other end are vegans and vegetarians, who make up around 8%. In the middle are the “plant-curious” who are willing to try it. Those people generally skew younger, and that’s whom Tyson is targeting. While Ervin couldn’t disclose the growth of its current plant-based portfolio, he said the company was pleased with it.
“We’re trying to get to a product that tastes like meat. From a meat company, who knows meat so well, our standards are pretty high,” he said.
The meat companies say they’re bringing scale, investment and decades of food business know-how to the arena. Tyson’s Hillshire Farms, Jimmy Dean and Ball Park brands are mainstays in American kitchens, and the company wants to do the same for its plant-based Raised & Rooted label.
“In the U.S., Beyond Meat and Impossible Foods started the race in the front,” Gilberto Tomazoni, chief executive officer at JBS, said in an interview. “But this is the beginning of a long-term race.”
Incumbents, bolstered by their head start, aren’t feeling threatened.
“We haven’t really seen in the marketplace any brands owned by Hormel or Tyson get much traction,” said Dennis Woodside, President of Impossible Foods, who estimated Beyond and Impossible have over 80% of the core fresh fake ground beef category. “All the other players are falling by the wayside.”
The real competitor, in their view, is traditional meat, which is still cheaper, and the two companies have been slashing prices lately in an attempt to narrow the gap.
Hormel told Bloomberg its products are catching on in the “spaces we choose to focus on,” like plant-based pepperoni.
A key to Beyond and Impossible’s success has come from demonizing beef production, which is a potent emitter of greenhouse gases. Critics say that as long as industrial meat companies keep animals as their primary moneymakers, vegan products aren’t offsetting but rather increasing the carbon footprint. Others firmly on the plant-based side are welcoming the entrants. Kory Zelickson, Chief Executive Officer of Vejii, an online marketplace for vegan products in Canada and the U.S., called it proof that the plant-based industry is making an impact on commercial animal agriculture.
“Some ethical vegans may not want to buy from a company that also produces meat, but I think it’s important for people to see the bigger picture,” he said.
Tyson learned its lesson on mixing animal and plant ingredients. In addition to terminating the pea-beef burger, the company also took egg whites out of its plant-based chicken nuggets. Testing showed consumers liked them better without the eggs, and now the company’s pushing its products to be all plants, Ervin said.
“We have retrenched on an all-plant portfolio going forward,” he said.
There was outside pressure, too. The company tangled with the Animal Defense Legal Fund and the Plant Based Foods Association, who threatened litigation over the company’s use of the word “plant-based” to refer to the egg-containing nuggets, according to correspondence obtained by Bloomberg. Tyson attorneys called the group’s definition of plant-based “self-defined and self-serving”—and then said it had already removed them from the products anyway.
Some analysts say it doesn’t matter that meat companies aren’t at the front of the race. They generally have enough scale to try out products that may not last. Beyond Meat may have been multiplying its share price since it went public two years ago, but its market capitalization is still a fraction of the likes of Tyson and JBS.
“There’s a lot of trial and error,” said Christine McCracken, senior animal protein analyst at Rabobank. “In an effort to get to market quickly, maybe not all products will work.”
High-quality journalism isn’t free. Please consider subscribing to Crain’s.