Several companies are on the move to get their alternative meat products to the market following Beyond Meat Inc.’s successful initial public offering. Although it’s not as big as the pot or crypto trends, the veggie burger craze is on a roll.
On Monday, Tyson Foods Inc., the largest meat processing company in the U.S. McDonald’s Corp., announced that they would be releasing their meatless products in the coming months. Tyson had already previously begun selling veggie burgers in Germany. Burger King has also declared last week that they are planning to launch their Impossible Whopper nationwide this year.
With the success of Beyond Meat, Bloomberg Intelligence expects that more and more companies like Kraft Heinz Co., Kellogg Co., and Conagra Brands, Inc. will be investing more on plant innovation. Wholefoods are said to be going to start selling veggie burgers from Beyond Meat’s rival, Lightlife.
There are misgivings that this rising trend may just come and go. Still, after multiple years in the works as a startup company and labor of biologists from Silicon Valley, alternative meat has now become mainstream. And it is all thanks to the much acceptable meat imitations that are made by the likes of Beyond Meat and Impossible Foods Inc. as well as the evolving tastes of the masses and their pursuit of reducing their consumption of meat.
It is also possible that there are already signs of a shortage of the choice veggie burgers to fulfill the current demand. In a survey conducted by Businessweek, much of the Americans who are vegetarian, vegan, or pescatarian, which means those who don’t eat meat besides fish, are Generation Z.
Will Sawyer, CoBank’s lead animal protein economist, says that a good sign of a booming market for the vegetable-based proteins is the increasing number of players getting into the sector. He is referring to Tyson Food’s quick shift from being an investor to a player in the alternative meat industry. Prior to Beyond Meat’s trading debut, the meat giant already sold their 6.5% stake in the company.
For a company that runs a very traditional animal-protein business for decades, it was a very quick progression when they decided to expand their products in an unexpected way. Sawyer believes that they would not be the last meat company in the industry to try to get their hands on this market.
New Alternative Meat Product Releases
On Monday, the Canadian meat giant, Maple Leaf Foods Inc., announced that the new Lightlife burger would soon be available in the meat aisles across thousands of U.S. Grocery stores and to Wholefoods in July. The release of alternative meat products from both Tyson and Lightlife would just be in time for grilling this summer.
In the center of meat consumption, Germany, McDonald’s are already selling veggie burgers made by Nestle to its customers. But, in their home market, it is not yet clear if the biggest restaurant company in the world plans for a beef alternative.
This might be due to a few complications that the new product can create to their kitchen, according to CEO Steve Easterbrook. But he says that McDonald’s has a team who are paying close attention and are discussing plant-based proteins. Easterbrook spoke about these during a conference call on April 30, adding that the company is now more focused on the demands from their consumers.
Kellogg’s Morningstar Star Farms unit is going to make additional new chicken alternative products together with their existing veggie burgers. They are hinting on other innovations as well. Their CEO Steve Cahillane expressed that he has great confidence that they could win in this space. He says that they would continue to persist in innovating in this market.
Jennifer Bartashus and Diana Rosero-Pena, Bloomberg Intelligence’s analysts, cited that in their research they saw that consumer trends, such as environmental issues, animal protection, and health and wellness, are getting traction as well as helping raise sales for the growing plant-based meat substitutes. And the forces driving behind these trends are the Millennials and the increasing disposable incomes that enable them to support their beliefs financially.
Thousands of Burger King and White Castle locations sell Impossible burgers. They are famous because of how their product perfectly imitates the taste of flesh. The company has accomplished this using a genetically modified mixture of soy plants and yeast that mimics cattle blood. And today, there is already a shortage of the product in the U.S.
The veggie burger has been around for a while, but businesses are much interested in investing in highly engineered alternatives that are intended to taste as good as meat. On the other hand, a few private label plant burgers made with lower-end ingredients and owned by retailers do seem to thrive.
Last year, Grocer Aldi introduced their Earth Grown vegan burgers that are less expensive than Beyond Meat’s $6 to $7 per two pieces 4-ounce patties. Earth Grown’s four patties package weighing 10 ounces are worth only $2.79.
Projections for the Veggie Burger Market
Sawyer stated that sales from alternative meat remain minuscule compared with the market of animal protein. He doesn’t believe that the alternative meat trend would last.
Henk Hoogencap, a board member and adviser to several food companies and Perfect Day, an alternative dairy protein startup, sees this frenzy as another instance of the market changing based on the attitude of the millennials. The only possible outcome to this would be not all of the companies, no matter the size may succeed.
Wendy’s Co. is just one of the few whose vegetable-based burger endeavors never took off. Heidi Schauer, the spokeswoman for the company, says that their product did garner the interest of a significant number of customers for some areas, but unfortunately, it did not work as well with others.
The national food and beverage practice leader of the accounting firm Marcum LLP, Lou Biscotti, stated that major food companies are a little too late in their preparations to invest in the emerging areas of business. These companies are already up in arms trying to catch up with the curve.
Chris Kerr, New Crop Capital’s co-founder and chief investment officer, thinks these huge companies are already three years behind in this trend.