Protein's Disruptors Threaten Traditional Red Meat, Poultry Industries
Follow the money. That might be the best way to determine whether meatless meats become a disruptive technology for livestock producers or just another niche player in a multitrillion-dollar global protein industry.
World demand for meat alternatives is expected to hit $5.8 billion by 2026, according to Transparency Market Research, and such big money has attracted big players such as ADM, Cargill and Tyson Foods. Two years ago, Tyson Foods, the $38-billion protein behemoth, launched Tyson Ventures and committed $150 million to invest in partnerships with various food startups focused on sustainability and technology.
“I can’t express enough that we do see a world where there will be multiple types of protein products available,” Tyson’s chief sustainability officer Justin Whitmore said in the Chicago Tribune in April. “That could include [plant]-based protein next to pork, next to maybe lab-grown protein, and consumers will have a choice.”
Cattlemen are watching how the large protein companies accommodate alternative proteins.
“We’re not going to slow innovation,” says Craig Uden, immediate past-president of the National Cattlemen’s Beef Association (NCBA) and fourth-generation cattleman from Elwood, Neb. “Long-term, alternative proteins represent a challenge to animal agriculture.”
Specifically, the beef industry should be concerned about lab-grown products, explains Texas A&M University meat scientist Jeff Savell. “Beef is generally the highest priced protein and provides the most room for competition. The technology is going to keep moving, and if the market is there, people are going to figure it out. Lab-grown products could be a potential threat to the livestock industry.”
While lab-grown meat is not yet commercially available, the plant-based foods market is growing rapidly—up 20% this year, according to research by Nielsen and the Plant Based Foods Association, with plant-based meat substitutes growing at 24%. Plant-based meat substitutes topped $670 million in sales last year.
Whether alternative proteins become a mainstay in tomorrow’s meat case will be determined by how well the products can meet the taste, texture and nutrition profiles consumers demand.
“Replicating a burger and steak are two different worlds. Flavor and texture in steak represent a steep, steep hill to climb,” says Brandi Karisch, Extension beef cattle specialist at Mississippi State University.
Jude Capper, a United Kingdom-based livestock sustainability consultant, also believes it is unlikely a whole-scale shift will occur from meat to lab/plant-based proteins.
“An increasing proportion of people are adopting plant-based diets, but although the relative increase may look significant, it is still a very small percentage of the total population, 1.7% in the UK, for example,” Capper explains. “The vast majority of people are still choosing animal products. Having other products available is great, but it is only adding to dietary diversity, not replacing it.”
Oregon feedlot owner Dave Maag agrees. “I think they (alternative proteins) will become a small segment of the market. A certain group of consumers will like those products, just like they like our natural beef.”
Maag refers to his 7,000-head Maag Feedlot Inc., which custom finishes cattle for the Painted Hills Natural Beef Program, a 20-year-old entity founded by seven Oregon ranch families.
“When we started, Painted Hills was harvesting 60 head every other week,” he says. “Now we’re harvesting 600 head every week, so the natural niche has grown, but I think it’s still only 3% or 4% of the market.”
Alternative meat companies, however, have their sights set on a much bigger market share.
Beyond Meat, the plant-based burger startup, is now sold in 19,000 U.S. stores.
The success of alternative proteins relies heavily on product attributes they claim can’t be matched by traditional meat—the elimination of the undesirables associated with animal farming. Those undesirables, either real or perceived, include the environmental footprint of meat production and animal welfare. Because animals are not slaughtered to produce lab or cultured proteins, they are often referred to as “clean meat.” In other words, the entrepreneurs behind alternative proteins are adding as much warm and fuzzy marketing into their products as they are taste and texture.
Extension meat specialist at Texas A&M University, Dan Hale says the message that is attached to alternatives often maligns the traditional meat industry.
“The biggest threat arrives when people claim alternatives are more environmentally friendly or healthier,” Hale says. “The information is often false and based on personal world views regarding the use of animal products for food and fiber.”
For instance, Memphis Meats’ stated mission is to replace traditional meat with products harvested from cells instead of animals.
“The way conventional meat is produced today creates challenges for the environment, animal welfare and human health. These are problems that everyone wants to solve,” says Uma Valeti, co-founder and CEO of Memphis Meats. His company has drawn financial backing from Bill Gates and Richard Branson, in addition to Tyson and Cargill.
“Lab-based meats don’t fit the mold” of clean and natural foods, says Capper. “According to a recent survey, only 40% of U.S. adults would be willing to try lab-based meat—and the desire to try something once is very different to wanting to eat something all of the time.”
University of California, Davis professor Frank Mitloehner believes consumers will be able to differentiate between plant-based proteins and lab-gown meat.
“Plant-based proteins are already on the shelves and developing a market share,” he says. “The price approaches that of regular minced meat and the taste is improving rapidly.”
But its lab-grown counterpart is different because it is grown in sterile, antibiotic-rich petri dishes.
“In my opinion, there is sufficient ick factor involved to deter folks from consuming it, once they actually know what (lab-grown meat) is,” Mitloehner says. “It is possible to produce fake burgers, but to simulate the taste and texture of a ribeye, is a different kind of challenge, one these new labs and factories are far from meeting.”
Yet, the potential of alternative proteins remains a concern to many. Minnesota cattleman Don Schiefelbein, believes alternative proteins should serve to further convince beef producers to continue to raise the bar on quality.
“Alternative proteins have the potential to disrupt our industry,” he says bluntly. “But how much of a disruption will be up to those of us in the beef industry.”
Schiefelbein, who is a partner in Schiefelbein Farms, Kimball, Minn., that sells 500 Angus bulls each year, and policy division vice chairman for NCBA, believes the best strategy for the beef industry is to embrace the production methods and attributes consumers say they want. That includes participating in sustainability programs, adopting animal ID for disease control and traceability.
“How our industry responds will determine the magnitude of the disruption,” he says. “Alternative proteins already have the financial backing of some high-profile investors, including two of the major beef and pork processing companies. The best thing we can do is to raise the bar on beef quality—do some things that may take us out of our comfort zone, like animal ID, sustainability and showing consumers where their beef comes from.”
Success of the Sale
Whether or not lab-grown meat innovators can lower costs enough to become commercially viable, much of the success of both lab-grown and plant-based proteins lies in emotion and marketability. So far, animal agriculture does not receive high marks for telling its sustainability story.
Capper says beef and dairy cattle have major advantages over lab-based proteins, and especially over pigs and poultry. “Ruminants can graze on land that is not fit to produce human food or fiber crops,” she explains. “Huge tracts of the world’s grazing land are too steep, dry, wet or rocky to be cultivated, yet can be grazed effectively, producing milk and meat from otherwise useless [inedible for humans] forages and promoting both wildlife biodiversity and good soil structure.”
Unlike the inputs needed to produce lab-based protein, beef and dairy can also be produced using human-inedible byproducts from food and fiber production (e.g. almond hulls, citrus pulp, cottonseed meal) that would go into a landfill.
“This reduces waste from the cropping industries, recycles valuable nutrients and, in the case of grass-fed beef and dairy, produces milk and meat with a far higher output of human-edible protein than is ever consumed by the cattle,” Capper says.
For Uden, who has both ranching and feedlot interests, the developing alternative meat industries mean beef producers must work even harder and demand transparency across the market place.
“We can’t rest on our laurels,” he says. “We must improve beef quality and demonstrate the sustainability of our industry.”