December 12, 2017

Plant-based meat alternative producer Beyond Meat announced the successful raising of an additional $55 million to support the company’s strategic goal of tripling production.

The round was led by venture capital firm Cleveland Avenue, which was founded by former McDonalds CEO Don Thompson, and included repeat investor Tyson Foods.

In October of last year, Tyson, which is the largest meat company in the U.S. by sales, became the first global meat company to invest in a meat alternative startup when it announced it had acquired a five percent stake in the plant-based producer for an undisclosed amount.

Although quite small in comparison to Tyson’s 2014 acquisition of Hillshire Brands for $7.7 billion, this move by Tyson carried significant weight in what it signaled.

“We’re enthusiastic about this investment,” said Monica McGurk, Tyson Foods’ executive vice president of Strategy and New Ventures & president of Foodservice at the time, adding, “which gives us exposure to a fast-growing segment of the protein market. It meets our desire to offer consumers choices and to consider how we can serve an ever-growing and diverse global population…”

Exact terms of this latest round were not disclosed, however, Tyson states that its involvement in the round,”… slightly increases its ownership stake in Beyond Meat from the five percent established a year ago.”

The $55 million in capital from this round will be in addition to the $90 million already raised by Beyond Meat from a range of high profile investors including Bill Gates, Kleiner Perkins Caufield & Byers, Twitter Co-Founders Evan Williams and Biz Stone, the Humane Society of the United States, and actor Leonardo DiCaprio, who agreed to invest in the company and act as an advocate two months ago.

This summer the company announced that distribution of its cornerstone product, the Beyond Burger, increased seven-fold, and now the product is being sold in 5,000 stores across the country include Kroger, Albertsons, and Whole Foods. Made to appear, cook, and taste like ground beef, the Beyond Burger is made from non-GMO soy and gluten, and is cholesterol free while containing more iron and less fat than beef.

Protein Pro-Team

The company plans to use the funds to support its goal of tripling its output, to fund its R&D initiatives, and to further grow its distribution and sales as rivals make moves of their own to gain market share. In August of this year, another California-based producer of plant-based meats – Impossible Foods, raised $75 million in a round led by Singapore’s sovereign wealth fund, Temasek, and including Open Philanthropy Project, Bill Gates, Khosla Ventures, and Horizon Ventures. The company also announced the construction of a new 68,000 square foot production facility in Oakland, California.

Global protein consumption is expected to climb at a CAGR of 1.7 percent, reaching 943 million tons by 2054, according to Lux Research. Over this same time period, alternative protein sources are forecast to command up to a third of the protein market. This trend is taking particular hold in the U.S. market, where 60 percent of consumers between the ages of 15 and 70 say they are reducing their intake of meat-based foods, and of those reducing their intake, 55 percent indicate that the dietary change will be permanent, according to data gathered by HealthFocus, reports Food Dive.

Global demand for all protein remains high and we’re passionate about meeting that demand sustainably,” said Justin Whitmore, executive vice president corporate strategy and chief sustainability officer of Tyson Foods. “Our investment in Beyond Meat provides another fantastic alternative for consumers as we strive to sustainably feed the world.”

This shift is driving meat companies such as Tyson and others to diversify its interests across the protein category. In February of this year, Canadian meat company Maple Leaf Foods agreed to acquire U.S.-based, plant-based protein food manufacturer LightLife Foods Inc. from Brynwood Partners VI LP for $140 million. Then, just days ago, the same company announced it had reached a definitive agreement to acquire Field Roast Grain Meat Co., a Seattle, Washington-based maker of premium plant-based meats for $120 million.

Beyond Meat’s innovative product however, appears to have gained the company the greatest traction so far.

“We discovered Beyond Meat because its burger tastes delicious, in fact, even better than the ‘real thing,’ in our opinion,” said Beyond Meat investors Jack and Suzy Welch, “…and then we were thrilled to also learn that they are second to none in this space in terms of building and scaling operations. They own the future.”

-Lynda Kiernan