- Archer Daniels Midland (ADM) and beef processor Marfrig Global Foods established a joint venture called PlantPlus Foods to create plant-based products in North American and South American markets, the companies said in a statement.
- The announcement builds on an earlier partnership between ADM and Marfrig to sell plant-based meat in Brazil. Marfrig will own 70% of the new venture while ADM will own 30%.
- Marfrig will be responsible for production and distribution while ADM will supply technical expertise, application development and plant-based ingredients and flavors.
Less than a year after ADM and Marfrig partnered to sell plant-based meat in Brazil, the companies are taking their partnership a step further. The two businesses likely used the deal they reached in 2019 as a testing ground, and now they are set to meet growing demand for plant-based items on a broader scale in North America and South America.
What makes the ADM and Marfrig partnership unique is that the companies have decided not to develop, produce and market their plant-based products alone but to do it together, with each side providing their expertise to the joint venture. ADM, an expert in processing grains and oilseeds, will supply raw materials. It will then be up to Marfrig to produce, distribute and sell the plant-based meat to restaurants, retailers and other establishments.
The plant-based arena has been rapidly expanding as more companies enter the space in a bid to meet increasing consumer demand for faux meat. During the last year, CPG giants such as Hormel Foods, Nestlé, Tyson Foods, Conagra Brands and Kellogg announced new products or improved existing ones to make them more meat-like in order to remain competitive with hot upstarts Beyond Meat and Impossible Foods.
With a growing number of large CPG companies and younger, more nimble upstarts in the market for plant-based products, it's important for players to create a more realistic meat offering when it comes to flavor, appearance and texture. It's no longer enough to simply create a plant-based meat product and expect hungry consumers to flock to it when they have several options.
In the case of ADM and Marfrig, they are entering the segment later in North America than other offerings so it's even more important they have a product that is more enticing to consumers because many of them may already have found a plant-based product they like.
However, with the plant-based meat category growing so rapidly there is likely a market for multiple players to compete. Investment firm UBS projects the plant-based protein and meat alternatives market will increase from $4.6 billion in 2018 to $85 billion in 2030.
Just this week, SPINS statistics for the 16 weeks ended April 19 analyzed by the Plant Based Foods Association found sales of plant-based meat have skyrocketed during the pandemic. All plant-based meat sales are up 148% versus 2019, and sales grew twice as fast as conventional equivalents during the four months analyzed.
Much of the focus in recent years has been on beef, but increasingly plant-based meat companies are moving into sausages and chicken. As the market opportunities grow, ADM and Marfrig will have further chances to increase their market reach. Early on, they have shown a willingness to move cautiously before deciding whether to expand. Now, a move into countries like Argentina, Colombia, Chile, Canada, United States and Mexico will prove to be a formidable test for the food giants while offering them a major runway for growth if they are successful.