- Tyson Foods is planning to debut meat alternative products on a limited basis this summer and on a larger scale early in the next fiscal year. CEO Noel White said on an earnings call Monday that the company is "well positioned to capture growth in this space."
- "We have a deep understanding of how to develop new products, brands and categories, and our distribution reach will allow us to move quickly into the marketplace," White said.
- This announcement comes shortly after Tyson divested its 6.52% share in Beyond Meat right before the plant-based meat company went public. The day it went public, the company's stock shot up 163%.
Tyson is quickly staking its own claim into the alternative-protein space. With the meat company announcing it will debut its new meatless products as early as this summer, it seems that the reported tension rising between it and Beyond Meat about competition was likely the reason for the divestment.
The plant-based meat sector has grown exponentially in recent years. Sales climbed 42% between March 2016 and March 2019 to $888 million, according to Nielsen figures cited by AP. Conventional meat sales were up only 1% to $85 billion at the same time. Competition in the plant-based space is heating up as the category grows. Beyond Meat competes with Impossible Foods' Impossible Burger and the Lightlife Burger — and Nestlé's Garden Gourmet Incredible Burger will soon be coming to grocery shelves. All of these are working to capture the meat industry’s customers.
Tyson's reputation as a beef, pork and poultry producer could impede its debut in the alternative meat space. Consumers might have a difficult time separating its reputation as a meat giant when picking up its new meatless items. Tyson will likely have to work to heavily market the new products, highlighting its taste, environmental friendliness and health advantages to draw in new customers and steal loyal ones from plant-based upstarts.
There are some major advantages to an established company like Tyson getting into this category. Tyson's distribution network across the U.S. will allow the products to quickly hit store shelves. The company's manufacturing facilities will likely be able to keep up with increasing demand. Those are issues that its competitors have faced, with Impossible Burger running low on stock and Beyond saying that it plans to use its IPO funds to invest in expanding facilities.
This isn't a surprising move from Tyson, since more consumers are looking to reduce meat consumption and incorporate more plant-based products in their diets. The U.S. meat substitute market is predicted to reach $9.25 billion by 2023, according to Market Research Future data. That market has led to difficult times for meat companies. Although Tyson beat earnings expectations in this most recent quarter, the company has struggled with recent recalls of its meats and African Swine Fever taking a toll on the entire protein category.
These struggles and the growth of plant-based has forced Tyson and other meat giants to reposition their brands to adapt to this new trend. Hormel's Applegate launched a blend burger, made with meat and mushrooms, earlier this year. More companies will likely be looking to do the same depending on how Tyson's alternative meat launch pans out this summer.
If Tyson is able to develop meatless products that consumers can trust and retailers across the country will supply, then selling off its share in Beyond Meat before its IPO could have been a smart decision. It seems Tyson is looking to play the long game, developing its own products to compete with all the alternative meat companies as consumers turn toward more environmentally friendly options.