January 29, 2018

Tyson Ventures, the $150 million venture arm of U.S. meat processor Tyson Foods, has doubled down on its commitment to alternative protein sources, and has joined the ranks of Cargill, Bill Gates, and Richard Branson as an investor in Memphis Meats.

Although the terms of the investment were not disclosed, Tyson states in a company release that its minority investment reflects its “commitment to explore innovative, new ways of meeting growing global demand for protein.”

Memphis Meats is a San Francisco-based startup that is developing methods for growing clean beef, chicken, and duck meat from animal cells without the need for breeding, raising, or slaughtering animals. It plans to use the additional funding to accelerate its product development, and to grow its team of chefs and scientists.

Take Two

This is not the first foray into investing in alternative meats for Tyson, the largest meat processor in the U.S. by sales.

In October 2016, Tyson was the first key meat company to announce its investment in a meat alternative startup when it acquired a five percent stake in California-based plant protein company Beyond Meat for an undisclosed amount.

This was followed one year later in December 2017 when Tyson took part in another round for Beyond Meat, led by Cleveland Avenue that raised $55 million for the company.

“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…”

The $55 million in capital from this round added 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 earlier last year.

Go Team Protein

The deepening of the connection between consumers and their food supply chains, along with a rising popularity of veganism, concerns over animal rights, and awareness around the hormones, antibiotic usage, and unsustainability inherent in the global livestock industry have pushed many people to look toward alternative ways to get protein into their diet.

Alternative protein sources have been increasingly on the radar of both consumers and investors. 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 as they fill the void created by slowing growth in meat and seafood production. Indeed, U.S.-based plant-based food and beverages businesses including Beyond Meat, Califia Farms, and Heidi Ho saw sales of $4.9 billion in the twelve months through June and have been growing at a faster rate than traditional food segments, reports the New York Times.

“We’re excited about this opportunity to broaden our exposure to innovative, new ways of producing meat, especially since global protein demand has been increasing at a steady rate,” said Justin Whitmore, executive vice president corporate strategy and chief sustainability officer of Tyson Foods. “We continue to invest significantly in our traditional meat business, but also believe in exploring additional opportunities for growth that give consumers more choices.”

This shift is driving meat companies such as Tyson and others to diversify their interests across the protein category. In February of last 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, within the same year, 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. And in January of this year, Cargill announced an undisclosed investment in PURIS, the largest pea protein producer in North America, to create a joint venture for the production of plant-based foods.

-Lynda Kiernan