- Tyson Foods is shipping plant-based nuggets under its Raised & Rooted brand and plans to have the product in 4,000 retail stores and in food service distribution by the end of September, the company's top executive announced on an earnings call on August 5.
- CEO Noel White said on the call that, "This kind of quick start demonstrates the capabilities and scale and national reach" of the company. Tyson, the largest meatpacker in the U.S., introduced the line of plant-based nuggets in June, along with a hybrid patty made with a blend of real beef and pea protein isolate.
- The announcement accompanied the company's third-quarter earnings report, which beat expectations. Market Watch noted Tyson stock has rallied 59% for the year to date.
Tyson is forging ahead in its expansion into plant-based food, and next month's rollout is just the beginning. The company has additional plans for nationwide retail launches during the next year with both plant-based and blended protein options under its Raised & Rooted brand, White said on the call. He said the company is also talking to partners about introducing these products in foreign markets, though the primary focus right now is "a powerful domestic launch."
The company's timing seems to be good since there has been elevated enthusiasm for plant-based products among investors, consumers and food companies. Sales of plant-based meat alternatives jumped 42% between March 2016 and March 2019 to $888 million, according to Nielsen figures cited by AP. Conventional meat sales only increased 1% to $85 billion during that period.
According to Nielsen, flexitarians are behind this growth since a large portion of consumers who buy animal-based meat are also purchasing plant-based alternatives. Nearly 60% say balancing foods sourced from both animals and plants is important, and 98% of those who buy meat alternatives are also buying conventional meat, Nielsen said. Those shoppers could be the target audience for a company like Tyson, which was first known for its meat products.
On the earnings call, White said Tyson's Prepared Foods division had produced a record operating margin of 12% for the first nine months of this year. In June, Tyson introduced the Aidells Whole Blends line of antibiotic-free chicken products mixed with chickpeas, black beans, quinoa, lentils and barley.
Tyson's strategies seem to emphasize prepared items and innovation, and this fits into current industry trends. Convenience-focused meat and poultry products posted robust growth last year, according to the Food Marketing Institute and the North American Meat Institute's "Power of Meat 2019" report. It found value-added items jumped 5.1%, fully cooked ones were up 2.5% and frozen products increased 2.2%.
Nuggets have been a particularly popular product, although sales have lagged recently due to recalls — including one from Tyson — and the greater appeal of chicken strips. However, plant-based nuggets could be a different story and still offer the same convenience and ease of preparation. If flavor and cost attract enough consumers, Tyson could enjoy a first-mover advantage and have a hit on its hands.
More competition will be coming from other big-name companies looking to cash in on the plant-based trend. Beside Beyond Meat and Impossible Foods, other large firms are investing in plant-based meat startups or developing their own products. Waiting in the wings is ingredients powerhouse Archer Daniels Midland, which Market Watch reported plans to enter the sector to balance out "challenging external conditions" from trade problems with China and African swine fever in that country.
With the plant-based trend ramping up, Tyson's move into the space is likely to help boost sales and its bottom line. It makes sense for the company to move quickly to get its nuggets into stores and food service channels since other plant-based items are already there, hoping to nab the largest share of consumer spending possible.