September 13, 2019

By Lynda Kiernan

Tyson Foods has made two investments – one on each side of the protein aisle. 

Through its corporate venture subsidiary, Tyson Ventures, the company has made an undisclosed pre-Series A investment in New Wave Foods, a maker of plant-based shellfish and shrimp alternative products.

“We’re excited about this investment in the fast-growing segment of the plant-based protein market,” said Amy Tu, president, Tyson Ventures. “This continues our focus of identifying and investing in companies with disruptive products and breakthrough technologies related to our core business so we can continue to serve a growing global population.”

Co-founded in San Francisco in 2015 by Dominique Barnes and Michelle Wolf, and an alum of the Silicon Valley-based IndiBio tech accelerator, New Wave’s products are the result of extensive collaboration on the part of the startup’s chief technology officer Michelle Wolf, with some of the most experienced R&D professionals, including food scientists and academics.

The startup’s initial offering, which will begin foodservice distribution next year, is a plant-based shrimp alternative made from sustainably-sourced seaweed and plant protein that contains the full profile of the eight essential amino acids found in all meat and seafood. It is allergen-free, contains zero cholesterol, and has fewer calories and less salt compared to marine shrimp.

New Wave has seen massive market response, and gained a huge boost in April of this year when Google agreed to serve its plant-based shrimp at its headquarters in Mountain View, California.

“We worked with the Culinary Institute of America to set the gold standard for this product and then created a plant-based shrimp that has had rave reviews from the thousands of people who have tasted it,” said Mary McGovern, CEO, New Wave Foods.

“Our plant-based shrimp cooks and tastes just like the real thing, and it matches the texture, taste, performance and versatility of shrimp fresh from the ocean. The proof is in the overwhelming, positive response we have had to the product.”

Look to Thyself

In October 2016, 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 plant-based meat alternative producer Beyond Meat. 

In December 2017, Tyson became a repeat investor, partaking in a $55 million Series F for the company along with venture capital firm Cleveland Avenue, which was founded by former McDonalds CEO Don Thompson.

In June of this year, however, Tyson went beyond investing in other plant-based protein startups, and launched Raised & Rooted, the company’s first plant-based and blended alternative product line. 

“Today’s consumers are seeking more protein options so we’re creating new products for the growing number of people open to flexible diets that include both meat and plant-based protein,” said Noel White, president and CEO of Tyson Foods.

“For us, this is about ‘and’ – not ‘or.’ We remain firmly committed to our growing traditional meat business and expect to be a market leader in alternative protein, which is experiencing double-digit growth and could someday be a billion-dollar business for our company.”

And – Not Or

While it’s true that the alternative protein market is seeing astounding growth, Tyson recognizes that the majority of consumers are open to a flexible diet and are still committed to the inclusion of meat, and therefore, is committed to keeping a presence in both channels of protein production.

One week before announcing its investment in New Wave through Tyson Ventures, Tyson announced its acquisition of a 40 percent stake in Grupo Vibra, a Brazilian producer of poultry products. 

Terms of the deal were not disclosed, however, Tyson said that once completed, the deal would give it “more flexibility in serving customers in key global markets”.

“This investment will enable us to access poultry supplies in Brazil to meet the growing needs of Brazilian customers and of priority demand markets in Asia, Europe and the Middle East,” said Donnie King, group president, international & chief administration officer for Tyson Foods. “It’s part of our strategy to develop a more flexible supply chain and mitigate the volatility of our previous model, which relied primarily on U.S. exports.”

This move follows one year after Tyson spent $2.16 billion in cash to acquire Keystone Foods from Marfrig, giving the company six processing plants and an innovation center in Alabama, Georgia, Kentucky, North Carolina, Pennsylvania, and Wisconsin; and global assets that include eight processing plants and three innovation centers located in China, South Korea, Malaysia, Thailand, and Australia.

Tyson states that over the coming five years, almost 98 percent of the growth in protein consumption will occur outside the U.S. This is reflected in Tyson’s numbers. With total yearly sales of $7 billion, $5 billion in generated by U.S. exports sales, and the remaining $2 million in accounted for by U.S. market sales.

“That’s why we’re growing our business outside the U.S.,” said King. “As the world population continues to grow, Tyson will grow with it.”

– Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.