Tyson Foods and Beyond Meat: A Future of Sustainable Protien Production

By investing in plant-based protein company Beyond Meat, Tyson Foods is preparing for a world that is more cognizant of where their food comes from and how it impacts the environment

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Tyson Foods and Beyond Meat: A Future of Sustainable Protien Production

Peter Valhouli-Farb

Tyson Foods is the United States largest meat producer.  Their products, spanning brands such as Tyson Chicken, Hillshire and Sara Lee, are many of the most iconic brands in the meat, poultry and pork markets in the US.  Domestically, they have 24% market share in the United States beef market, 21% in chicken and 17% in pork.  Tyson Beef, which comprises of 42% of Tyson’s revenue, is the largest and most successful product line within the entire beef industry. It is impossible to discuss the global food and agriculture system and not discuss Tyson.

Even though Tyson Foods made $41b in 2015, their core business is under fire from numerous angles.  First, the United States is becoming increasingly cognizant and aware of the realities of the food system, primarily how we treat our livestock.  Videos and vivid images have gone viral showing life of livestock at factory farms.  This is pushing consumers to move up market to more humanly raised livestock that leave less of an impact.  Second, American consumers are starting to discover the values in alternative proteins, such as dairies, beans, legumes and protein based snacks, which are cannibalizing many consumers beliefs that the only way to consume protein are from livestock.  Finally, and most importantly, as the world increasingly wakes up to the realities of climate change and examines its core root causes, the agriculture sector, and particularly our society’s reliance on livestock, is increasingly scrutinized.

University of Oxford researchers predict that by 2050, the food and agriculture system will account for more than 50% of our global carbon emissions.  Many consumers initially focused on transportation, electricity and infrastructure as ways to cut emissions as they were seemingly more obvious and tangible to see and understand, but consumers are now waking up to the real problem of agricultural production.  Today, the methane produced from livestock constitutes about 15% of global C02 emissions and its share of the market is growing rapidly.  This number also doesn’t include the environmental impact of resources (such as food and water) allocated towards livestock or its impact on the land.  Consumers are waking up to this and eating less and less meat every year, which is directly impacting Tysons core business of raw livestock products.

In the backdrop of all of this transformation, a new wave of businesses have emerged that are creating plant-based meat substitutes that have the same look, feel, bite and texture of real meat.  Recent advancements in food chemistry combined with consumer interest which is fueling private sector R&D spending, is creating the future of how we consume proteins in a sustainable way.

Beyond Meat, a Los Angeles based producer of plant-based meat substitutes, is a lot different than many other food companies.  Founded out of a lab at University of Missouri with a goal of reducing our global reliance on livestock and backed by top venture capital firms like Kleiner Perkins and the founders of Twitter, Beyond Meat, which is carried across hundreds of super markets across the US, has quickly become the face of this new generation of plant based protien businesses.  By using pea protien and coconut meat, with beet juice to add juice, Beyond Meat has created a hamburger replacement that has received rave reviews from NYTimes food critic Mark Bittman too hard to impress men’s lifestyle magazines like Playboy.

To diversify their product offering, reach consumers who have abandoned meat, and secure a role in the future of protien consumption, Tyson Foods acquired a 5% stake in Beyond Meat.  While the valuation or size of their investment was never announced, it is believed to value Beyond Meat in “the hundreds of millions of dollars”.  By investing in Beyond Meat, Tyson now has a strong hold into the most disruptive business model in its space, is buying good will with environmentalists, and better positioning itself for a world in which we aren’t nearly as reliant on livestock as their environmental costs just became too large.

This is just the first pin to drop for Tyson Foods as they try to prepare for a world where the environmental impact of our food system and reliance on livestock are under greater scrutiny. To stay ahead of the curve, they should invest in similar companies across numerous food groups.  Impossible Foods, a San Francisco based competitor focused on both beef and chicken, is starting to work on a plant based pork product that could cannibalize their recent $8b acquisition in pork product company Hillshire Farms.  Other companies are also going after the “egg-less” market as well, which is tangential to their poultry business, which would be a smart investment for Tyson to pursue as well.

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Works Cited

Haspel, Tamar. “The Decline of the (red) Meat Industry — in One Chart.” The Decline of the Red Meat Industry in One Chart Comments. Fortunue, 26 Oct. 2015. Web. 03 Nov. 2016.

Schiller, Ben M. “We’re Creating A Protein Bubble That’s Going To Destroy The Planet.” Co.Exist. Fast Company, 04 Oct. 2016. Web. 03 Nov. 2016.

Shapiro, Paul M. “Americans Are Eating Less and Less Meat Every Year. Why?” Forks Over Knives. Forks Over Knives, 03 June 2016. Web. 03 Nov. 2016.

Tower, Blue A. “Blue Tower Quarterly Letter And Tyson Foods Thesis.” Seeking Alpha. Seeking Alpha, 01 Nov. 2016. Web. 03 Nov. 2016.

Vaughan, Adam. “Tax Meat to Cut Methane Emissions, Say Scientists.” The Guardian. Guardian News and Media, 20 Dec. 2013. Web. 03 Nov. 2016.

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6 thoughts on “Tyson Foods and Beyond Meat: A Future of Sustainable Protien Production

  1. This is a really interesting look at Tyson’s attempt to diversify into projects that go directly against their business model. I wonder though, what benefit they would ultimately derive from a partnership with Beyond Meat. From what I understand, Beyond Meat’s biggest difficulty is in making the protein creation process scalable and at a reasonable cost. While Tyson has expertise in scaling processing plants, I’m not sure that they would be as successful in taking a lab process and scaling it up for mass manufacturing. And even if they were, and consumers bought into the concept, what would then be the impact on Tyson’s core business?

    It feels like Tyson is hopping on the potential, far-off-in-the-future, non-meat protein train without giving any consideration to their current destruction of Earth and its atmosphere. Hopefully the company is combatting their own very real effects on climate change at the same time as they’re pursuing moonshot ventures.

  2. I have mixed feelings about Tyson’s investment in Beyond Meat. While I’m happy to eat meat substitutes, one of the exciting opportunities that comes with being vegetarian is exploring the diverse family of edible plants that are more sustainable than water & energy intensive meats. If Beyond Meat will get traditional meat-eaters bought in I can see a value, but from a longer-term green perspective it may be easier to just grow protein-rich plants that also help create clean air and health soil. As A mentioned, it seems like there may be a lot of challenges that come with scaling lab-based meat manufacturing. I’m a bit biased, but even if it’s green and animal-safe I think I might still take a lentil-burger over a Petri-dish one. I’ll be curious to see how people purchase as lab grown meats get closer to the prices of non-meat products.

  3. This is a really interesting article on a not-often discussed contributing factor of global warming: livestock and other meats. However, from a cynics point of view, it doesn’t appear that Tyson is investing in meat-alternatives in order to address global warming, but rather to protect themselves from being innovated out the market. I’m interested to know, what if any, actions Tyson is taking to address the issues surrounding their current operations? Especially in light of the negative press they are getting. I’m also wondering whether green-innovations in replacement industry being driven solely by meat-replacement companies or if they incumbents are playing a role. This article begs the question of whether or not we can sustainable raise meat –or if the future belongs to vegetarians. Great article, it got me thinking.

  4. I think that Tyson’s diversification into plant-based meat is not a bad move in Tyson’s attempt to take a share in shifting consumer trends that are focused on more sustainably sourced protein alternatives. However, instead of solely focusing on plant-based meat alternatives to reduce its carbon footprint, I think that Tyson can also focus on partnering with local farmers who responsibly produce their meat. Instead of sourcing livestock from factory farms and other questionable suppliers, Tyson can work to improve the quality of its supply chain by partnering with eco-conscious producers. In improving its supply chain, Tyson could market to consumers that its meat is now responsibly sourced and humanely raised without added hormones, steering customers that are slipping away for better quality protein back to the brand.

  5. This is a very interesting article, PVF. I am very interested in the solutions that are available to find substitutes for meat. AS you successfully highlight it, the meat industry accounts for a large share of the global carbon emission. To further your research, I wanted to highlight that some companies are looking at substitutes from other animals/protein sources. Insects appear to be a more sustainable source of protein for humanity. I would also advise you to look up some initiatives that then tend to borrow from the “3D printing” industry to create reconstructed proteins at scale.

  6. This was a very thoughtful article. I thought Tyson’s diversification into meat substitutes could be a good strategy given the environmental and health impacts of processed meats. In 2015, the World Health Organization declared that processed meats and red meats as carcinogenic. I wonder if these findings will have any impact on long-term consumption patterns and Tyson itself. If so, Tyson may then want to consider adding even more meat substitutes to its product portfolio.

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