Blended Meat or Plant-Based? Analyzing the Implications of Perdue and Tyson's Protein Diversification
Let’s start with the obvious. The plant-based foods industry is witnessing unprecedented and unstoppable growth year over year, so it should come as no surprise that big meat and dairy has been keeping a close eye on the space and carefully plotting how to get a piece of the plant-based pie.
As it turns out, there are many ways to to dip your toes in plant-based waters. The two most recent attempts have attracted a lot of attention and have been celebrated by the press as strategic moves into the hot plant-based market.
The Blended Solution
What’s the fuss all about?
Tyson Foods: Made a strategic investment in Beyond Meat (plant-based meat), Memphis Meats and Future Meat Technologies (both cell-based/cultured meat startups), only to later exit Beyond Meat before it went public. Tyson followed Beyond Meat’s blockbuster IPO in May 2019 by announcing its entry into the plant-based space with quick-to-market blended protein products under a new brand.
Perdue Foods: In June 2019 – seemingly out of nowhere – America’s biggest producer of chicken announced the release of their own blended protein products “CHICKEN PLUS™ “ with vegetable nutrition for flexitarian families.
Both these moves are undoubtedly a sign that these companies are curious about the market shift in favor of plant-based proteins. That in itself is worthy of celebration. But neither launched even one 100 percent plant-based product. Instead, their products are either a mix of beef/chicken and plant-protein or plant-protein mixed with other non plant-based ingredients.
They are basically blended meat products, touting the benefits of plant-protein.
Firstly, let me be clear – this article is not about what I will or won’t eat or about being a purist or even about whether blended meats will sell. It’s an examination of what the industry is doing at large and the potential strategies that might work to actually shift our food system from animal protein to plant-protein. If nothing else, I hope it sparks some thoughts and leads to a more nuanced discussion about the positive and negative implications of strategies such as blended meat vs. plant-based in the retail and food service environments.
The biggest issue is while Tyson and Perdue have made a step in the right direction, it pales in comparison to the awe-inspiring gusto with which other big food companies are diving into the space.
So why on earth did they launch with blended products and why am I sounding skeptical about Tyson’s and Perdue’s moves instead of joining the cheering squad? While I hate to let perfect be the enemy of good, I have news for you – perfect seems to already be winning!
Big Plant-Based Moves From Big Meat and Dairy
Here’s the evidence that big meat and dairy can make big moves into the plant-based space. More importantly, these moves seem to be paying off for the companies that are making it.
Maple Leaf Foods: Canada’s largest packaged meat company acquired plant-based meat brands Lightlife and Field Roast. Soon thereafter, the company announced the formation of a wholly-owned independent subsidiary called Greenleaf, with a commitment to social purpose, and sustainability, and dedicated to cultivating and advancing leadership in the fast-growing plant-based food sector. To underscore this commitment, the company announced plans to build a $310 million plant-protein production facility in Shelbyville, Indiana that will employ 460 people when the plant is fully operational in 2021. This is a big bet on plant-based meat and the new facility will effectively double Field Roast’s and Lightlife’s production capacity with an output of 60 million pounds of plant-based meat annually.
Danone: One of the largest multinational food-products corporations in the world and the world's largest yogurt producer. While a large portion of brands under the Danone corporate umbrella are in the dairy business, Danone recently starting making inroads into the plant-based food space. Danone acquired WhiteWave Foods Co. for $12.5 billion in a deal that closed in 2017, bringing plant-based brands like Silk, So Delicious, and Vega in its portfolio. Later in the year, the company invested $60 million in WhiteWave’s manufacturing facility in Virginia. In 2018, during an investor conference, Danone pledged to triple its worldwide plant-based sales from $1.9 billion to around $5.7 billion by 2025 by combining its position in the dairy industry with the high plant-based growth potential. At the end of the fourth quarter of 2018, Danone's dairy and plant-based operation in North America posted its fifth consecutive quarter of growth with sales up 2.7 percent. According to Danone, its plant-based brands were one of the segments driving growth.
On the plant-based milk, cheese, and yogurt labeling debate, Danone came on strongly in support of plant-based products using dairy terminology (in stark contrast to other dairy yogurt producers like Chobani). More recently, Danone’s CEO Emmanuel Faber shared that their U.S. plant-based business could become as big as its traditional yogurt business in 10 years.
Now these are some bold and impressive moves worth celebrating.
What are Others Doing?
Danone and Maple Leaf Foods are not alone. Here are some other big players in the meat and dairy industry that are plotting plant-based moves.
Nestlé: THE largest food company in the world acquired Sweet Earth, a plant-based foods manufacturer based in California as part of Nestlé’s strategic priorities to build out its portfolio of plant-based foods. Earlier this year, Nestlé announced its biggest move yet into the plant-based foods space by launching a new 100 percent plant-based burger dubbed the "Awesome” burger in Europe, and unveiled plans for a fall 2019 launch in the U.S.
Unilever: One of the world's leading suppliers of food, home care, personal care and refreshment products acquired the Vegetarian Butcher in 2018. As Unilever put it, they are “responding to the growing trend among consumers to increasingly opt for vegetarian and vegan meals.” But Unilever’s plant-based ambitions extend far beyond one acquisition. They have been launching more all plant-based products under various brands, including Hellman’s, Ben & Jerrys Ice Cream, Cornetto, Magnum and beyond.
Cargill: Invested in cell-based/cultured meat startups Memphis Meats and Aleph Farms, pea protein producer PURIS, and Calysta, a biotech company that ferments natural gas to produce protein.
PHW: In 2018. Europe’s leading poultry producer, PHW invested in SuperMeat, a cell-based meat startup based in Israel.
JBS: In 2019, the world’s largest meat packer announced plans to launch an all plant-based burger in Brazil under their brand Seara. The burger is made from soy, wheat, garlic, onions and beetroot.
The Blended Question
All these exciting developments from companies as far-ranging as Nestlé to JBS make me wonder even more about why one would choose to launch with blended meat instead of an all plant-based product. And more importantly, what are the implications?
I don’t have the answers, but I have a lot of questions and am hoping that others within the industry can share their perspectives on the benefits and drawbacks of Tyson and Perdue’s recent moves.
Labeling: The press is calling these products “plant-based” and I don’t see many people attempting to correct this misrepresentation. Should we bother to make a clear distinction here? Why?
Consumer Confusion: Will the branding and packaging lead to consumer confusion? Blended products made by Tyson and Perdue, using meat from industrial animal farming, touting the benefits of plant-protein will soon start occupying the limited shelf space in refrigerated and frozen sections of grocery stores. While savvy consumers who are brand loyal and seeking plant-based alternatives aren’t likely to fall for the “Raised and Rooted Plant-Based Protein Burger” or “Dinosaur-shaped chicken nuggets,” blended with cauliflower, chickpeas and plant protein, what about consumers who are just attempting to cut down on meat and would have otherwise picked up a 100 percent plant-based option? Could such products eat into the market share of plant-based offerings because of consumer confusion?
Meat Reduction: Neither Perdue Foods or Tyson Foods said the blended/plant-forward products would replace any existing line of all-animal protein products and neither made any commitment to phase out animal-protein. So how is it a meat reduction move? Does the answer change if a blended product is offered in a food service environment vs. retail?
Consumer Insights: Can the success or failure of blended products really tell us anything about consumer desire to purchase less meat and shift to plant proteins? What if all the heavy marketing, combined with plant protein-forward branding and packaging just leads consumers to feel better about consuming more animal protein?
Price Competitiveness: How will low-priced blended products impact companies working to develop, scale and distribute 100 percent plant-based products that currently won’t be able to compete on price with blended products?
Blended Dairy: If a dairy company launched a cheese, milk, yogurt or ice cream that was a blend of dairy and peas, nuts or other plant-proteins, would you still applaud the move and celebrate the launch of their plant-forward offerings? If not, why not?
At the end of the day, if this turns out to be an attempt by Tyson and Perdue to quickly announce their entry into the market, while they figure out how to launch all plant-based products, I’m all for it.
No matter what the intention, eventually I do believe the market will decide how much room there is for blended products in grocery shelves, and consumer stomachs, and it will be interesting to analyze the impact over time.
But in the interim, if you have any answers to the questions I asked above, or want to share your opinions on blended vs. all plant-based products, please let me know.