By Jeanette Settembre, MarketWatch
The biggest meat producer in the U.S. is going meatless, sort of.
Tyson Foods, the maker of hot dogs, steak strips, and chicken nuggets, has unveiled its first alternative proteins (link), a plant-based nugget and a "blended" patty that's a combination of Angus beef and pea protein.
The product line, Raised & Rooted, isn't available in stores yet, according to the company's website. The launch pits Tyson (TSN) against smaller innovators including Beyond Meat (BYND) and Impossible Foods in the fast-growing meatless market, which could swell to $140 billion (link)in the next 10 years, Barclays said recently.
Tyson first announced in February that it planned to debut a vegan protein this year.
Noel White, president and chief executive at Tyson Foods, said during its first-quarter earnings call (link) that the brand aimed to make "protein alternatives." The company invested in California-based vegan meat alternative company Beyond Meat in 2016, and sold its stake this spring (link). Tyson reported a decline in sales late last year (link) as it grappled with falling meat prices.
Don't miss: Beyond Meat at risk as competitors like Impossible Burger take root (link)
Consumer demand for veggie options are on the rise as more studies detail the adverse health effects of eating meat. Red meat is "not essential" and has been linked to mortality and other health risks, a group of scientists said in a major report released this year. People need to change the way they eat and cut excessive amounts of meat out of the diet, according to a report from the EAT-Lancer Commission (link), a group of 30 scientists who are researching and promoting healthy and sustainable diets worldwide.
A healthy diet should actually have "low amounts" of food that come from animal sources, they said. In fact, many of the nutrients people rely on from meat, such as protein, can just as easily come from plants like vegetables, legumes and nuts, such as peanuts, they added. Their recommendation: The ideal amount of meat to eat would be none, especially if you replace it with plant-based sources of protein.
Vegan ingredients including jackfruit, black beans, mushroom mince and cauliflower are becoming popular substitutes for barbecue meats such as steak and sausage. More brands are showing interest in the growing category.
Meatless proteins can be more expensive
Meatless burgers and other plant-based proteins at fast-food chains like Burger King (QSR.T) and Del Taco (TACO) can be just a caloric as their animal-based versions, and they're usually more expensive (link). Fast-food chain Shake Shack's veggie burger costs $7.29 (link) versus $5.55 for a ShackBurger, and Little Caesars' Impossible Supreme Pizza made with fake sausage is $12, (link) compared to the $10 original Supreme Pizza with real sausage.
Last April, White Castle, known for its square beef sliders, started serving the $1.99 Impossible Burger, which is made with a red iron molecule called heme that's found in meat and some plants. It makes food cook, bleed and taste like real beef (link). It's more than double the price of the 0.9-ounce mini-cheeseburger, which costs less than $1.
Impossible Foods -- the makers behind the Impossible Burger -- said earlier this year it plans to beef up its meatless portfolio by adding a vegan steak next (link).
The meatless substitute market had around $555 million in revenue in 2017 and it's growing at around 6% per year, according to a report from Nielsen, the Good Food Institute and the Plant Based Foods Association (link). Tofu and tempeh sales were up around 2.6% at $99 million in 2017.
One-third of all Americans, and 37% of millennials, plan to buy more plant-based products over the next year, according to Mintel's 2018 Summer Food & Drink Trends report. And while the majority of North American consumers still opt for meat as their primary source of protein, 23% of eaters want more plant-based options on shelves, according to data from Nielsen (link).
Why people are pursuing plant-based eating
(link)In the largest study of vegetarian diets, scientists concluded people who follow vegan, vegetarian, pescatarian or semi-vegetarian diets actually had a 12% lower mortality risk than people who are omnivores. Those who had the lowest risk: Pescatarians (people who don't eat meat, but do eat vegetables and fish).
Researchers from the European Association for the Study of Obesity compared a vegetarian diet with the Mediterranean diet (link), which is based on eating habits of those in Greece and Italy and relies heavily on fish and fruits and vegetables, and the so-called "U.S.-healthy diet" based on government-distributed dietary guidelines. And on average, someone following a vegetarian would have spent $2 less per day, their analysis released last year found.
To produce the analysis, researchers created two-week menu plans assessed for their nutritional quality and used the cheapest price available from Amazon (AMZN) . When cooking vegetarian dishes from scratch, they typically cost less than meat-based dishes. While all three diets were comparable in terms of nutritional quality, the vegetarian diet only cost $15.40 per day on average, versus $17 for the U.S.-healthy diet and $17.30 for the Mediterranean diet.
(link)But some people say it's worth paying more for veggie burgers and other alternative meat products. Plant-based diets and products are appealing to increasingly health-conscious foodies. New York City student Myra Sabet, 22, became a vegetarian over two years ago because she was worried about her family's history of heart disease.
"There were a lot of health conditions that arise from eating meat, and I realized a lot of my family members have had heart problems from it, as well," she told MarketWatch (link). It has been a relatively easy transition because she's not alone. "I have noticed that especially here in New York, a lot of people in college are trying to eat clean and healthy," she said.
There may be other advantages to Tyson's move into the vegetarian market. Earlier this year, the company recalled 36,000 pounds of chicken nuggets after customers said they found pieces of "soft, blue rubber" inside, the Associated Press reported (link). The U.S. Agriculture Department said the 5-pound (2-kilogram) bags should be thrown away or returned, but the government agency said there were no reports of people being sick from the products. (In 2017, it recalled 2.5 million pounds of breaded chicken for misbranding the products (link). In 2015, it recalled 52,486 of chicken wings (link).)
Tyson reported first-quarter revenue (link)of $10.193 billion, falling short of the FactSet consensus of $10.361 billion and down from $10.229 billion a year ago. Shares in the company, however, are up around 55% year-to-date. The Dow Jones Industrial Index is up 11% year to date and the S&P 500 is up 15% over the same period.
(Maria LaMagna and Jacob Passy contributed to this story.)
This story was originally published in February and updated on June 13, 2019.
-Jeanette Settembre; 415-439-6400; AskNewswires@dowjones.com
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06-15-19 1136ETCopyright (c) 2019 Dow Jones & Company, Inc.