Why Beyond Meat’s Founder Is Welcoming Tyson Foods as Investor
A plant meat and a traditional meat company have announced an investment agreement whereby Springdale, Arkansas-based Tyson Foods Inc. will own a five percent stake in Beyond Meat.
The undisclosed dollar value was raised through an initiative of El Segundo, California-based Beyond Meat, which brands itself as “The Future of Protein.” Other investors in the company include The Humane Society of the United States, Microsoft founder Bill Gates, and venture capital company Kleiner Perkins.
Beyond Meat’s founder Ethan Brown is a vegan who has been vocal about animal welfare and his belief in the environmental and human health benefits of a plant-based diet. In a letter to core supporters of his plant-based burgers, beef crumble, and chicken strips, Brown gave an impassioned defense of his decision to “welcome” Tyson, which included him referring to his pet pig as a member of the family and to Tyson executives as “principled and constructive people.”
Brown says he is aiming for transformative change, beyond the “believers (like me)” and into the broader market.
The global plant-based meat industry is expected to grow at a rate of 8.4 percent, according to Allied Market Research, with an estimated worth of $5.2 billion by 2020. The meat industry, by comparison, is almost 36 times larger in the United States alone, according to the North American Meat Institute. Tyson is the world’s largest processor and marketer of chicken, beef, and pork.
Nothing specific is being said about cooperation between the two companies, but both are saying the deal gives each a way to better serve the changing consumer.
“I don’t expect to change Tyson. Nor does Tyson expect to change me,” wrote Brown.
Tyson, for its part, spoke of the investment as a way to get exposure to a fast-growing segment of the protein market.
“It meets our desire to offer consumers choices and to consider how we can serve an ever-growing and diverse global population, while remaining focused on our core prepared foods and animal protein businesses,” said Tyson Executive Vice President of Strategy & New Ventures Monica McGurk, in a press release.
Stacking the Deck
Brown could not have secured a bigger partner to potentially help him to mainstream his meat alternatives, and it is just one of a set of deliberate steps in this direction.
Tyson supplies fast food giants McDonald’s, Burger King, Wendy’s, and mega retailer Wal-Mart. Tyson’s brands—which include Jimmy Dean, Hillshire Farm, and Sara Lee—touch two out of five American dinner plates.
In November of last year, Beyond Meat also brought on to its board former McDonald’s CEO Don Thompson, who said in a statement “traditional favorites” like beef, fowl, and fish, are being augmented with plant protein sources to “satisfy this new taste demand.”
In the first paragraph of Brown’s letter to supporters, he calls the company’s initial retail positioning in the freezer aisle—with the other “meat alternatives”—a “hard-to-find sliver of an aisle.” He added it is “important but not transformative.”
He then goes on to highlight how Beyond Meat has already entered “the biggest of all stages for protein: the meat case.”
The concept of selling Beyond’s plant meat alongside flesh meat debuted in Boulder, Colorado, in late May and the products sold out in one hour, according to a post on the company’s Twitter account.
— Beyond Meat (@BeyondMeat) May 23, 2016
Brown writes that the sales numbers for this arrangement are encouraging. He said it tells him “the idea of building meat—yes, actual meat, in its intricate assembly of protein, fats, and water—from plants is not only possible, but desirable to consumers of varied dietary stripes.”
Henk Hoogenkamp, a plant protein expert, author, and industry consultant familiar with Beyond Meat’s development process, said in an email Brown’s positioning is “very clever.”
“A lawyer by education, he had the guts to take on the meat industry—and McDonald’s for that matter—by calling his products ‘plant meat,'” said Hoogenkamp.
For many years, legacy meat companies tried to give a negative spin to vegetarian-based meat alternatives, said Hoogenkamp. “However, now that the millennials have become a more important segment [and millennials do not eat Big Macs], the legacy can no longer stick their head in the sand and pretend nothing has changed.”
Ingrid Newkirk, president of the People for the Ethical Treatment of Animals, said in an emailed statement: “We are beyond delighted (pun intended!) that Tyson has decided that ‘if you can’t beat ’em, join ’em!’ The writing is on the wall—people are moving away from meat and dairy to animal-free, environmentally [friendly], and artery-friendly vegan options so the animal agriculture industry must now diversify to keep up.”
Michele Simon, president of the Plant Based Foods Association, also said the deal “could be a good thing—if Tyson is truly shifting away from the cruelties of industrialized meat—but it’s too soon to know if that’s truly the case.”
Brown is clearly hopeful of a shift along these lines and is betting on the consumer to choose. However, he says his Beyond Burger has “many miles” to go before closing in “on that perfect, indistinguishable build.” His burger already bleeds, thanks to pulverized beets, but doesn’t yet behave and taste exactly like meat.
“When we arrive there, I believe we can begin to retire the meat/no meat debate,” he writes.
“How many of us staunchly defend the landline against the iPhone, or demonize the landline in favor of the iPhone? Both are phones, just made differently, and the consumer decides.”