Meat industry discovers plant protein

meatingplace.com • March 2016

It ain’t meat, babe

lovers are looking for protein options.

by Rita Jane Gabbett, executive editor

Meat alternatives aren’t just for vegetarians; increasingly, even meat lovers are looking for protein options.

As research firms churned out New Year’s forecasts this year, one theme became apparent: Plant protein is in. Forget the war between vegetarians and meat eaters; today’s battle is for the omnivore’s plate and, increasingly, those who eat meat are looking to diversify their protein sources.

Plant-based meat alternatives (veggie burgers, meatless chicken strips) have been around for a long time. Most producers started as boutique businesses that catered to vegetarians. Increasingly, however, mainstream large packaged food companies, including Kellogg, Kraft, Pinnacle Foods and General Mills, have bought into the market or developed their own brands, and investors like Bill Gates have thrown big money at startups seeking to better mimic meat’s taste and mouth feel.

All this money isn’t just going after the 5 percent of the population that identify as vegetarians, a percentage that has remained consistent and even edged lower since 1999 (6 percent), according to a 2012 Gallup poll.

It will be up to meat processors to determine whether they can address with their own products the reasons consumers are looking for alternatives or choose to enter the market for these products themselves. Either way, it’s time to understand more about these protein players.

On trend

“Protein from plants, not animals, is definitely one of the stronger trends,” says Canadean Innovation Insights Director Tom Vierhile, who put it on his top 10 list of food trends for 2016.

Hospitality and restaurant consulting firm Andrew and Freeman & Co. also named vegetables at the center of the plate as a top trend this year. “People want less animal protein and are requesting that veggies are ramped up to their fullest creative potential. And if a dish happens to be vegetarian or vegan, hey, that’s OK,” the research firm wrote, noting, “Millennials love this trend, since there is an environmentally responsible edge to it.”

Both restaurants and retailers have noticed the trend. Casual dining chain Yard House now devotes a full section of a two-page menu to entrées featuring Gardein-brand meat substitute products.

One in eight burgers that fast-growing better burger chain BurgerFi sells is a veggie burger. “That item alone was a game-changer,” says Global Brand Manager Steve Lieber.

At one of its Chicago stores, fresh food retail chain Mariano’s staffs a separate deli-style counter with an employee standing by ready-to-create sandwiches and other ready-to-eat selections, all made with meat substitutes.

The Protein and the Plate research project, conducted last year by NPD Group, Midan Marketing and Meatingplace and sponsored by Yerecic Label, showed 70 percent of meat eaters substituting a non-meat protein in a meal at least once a week and 22 percent saying they are doing it more often than a year ago.

That trend is fueling research into a new class of meat alternatives that go beyond the likes of black bean burgers, tofu stews and tempeh and seitan-based “chickenless” products, in an effort to court meat eaters.

NOT YOUR DADDY’S VEGGIE BURGER

“We want the hardcore beef lovers,” says Patrick Brown, founder of Impossible Foods. “We are not creating a veggie burger. We’re creating meat without using animals,” the Associated Press quoted the Stanford University professor-turned-entrepreneur as saying. His formula, honed over the past four-and-a-half years, includes creating bioengineered “blood” and other materials from plants to mimic ground beef taste and mouth feel.

While his product is yet to be tested in the market (Impossible Foods hopes to launch it later this year), the concept alone was enough to attract the financing of Microsoft co-founder Bill Gates, Hong Kong billionaire Li Ka-shing and a slew of venture-capital firms. Last October, the firm raised $108 million in addition to its original $74 million in seed money, a spokeswoman confirms.

Modern Meadow takes a different approach. By culturing actual bovine cells, it is working to create meat and leather that it says will require no animal slaughter and much lower inputs of land, water, energy and chemicals.

“I am convinced that when we look back in 30 years on today, how we raise and slaughter billions of animals to make our hamburgers and our handbags, we’ll see this as being wasteful,” co-founder and CEO Andras Forgacs predicts in a TedTalk.

Modern Meadow isn’t even predicting a product launch. Still, it managed $15.5 million in start-up funding on concept.

Beyond Meat

Further along is Beyond Meat. Ethan Brown founded the company in 2009. By 2013, Whole Foods Markets was distributing Beyond Meat chicken-free products made with non-GMO soy and pea protein nationally. The company has since launched a “beast burger” made with pea protein and marketed as soy-free, gluten-free and non-GMO. Beyond Meat products are now sold in 10,000 stores across the United States.

With a campaign that simultaneously targets fitness-minded millennials and addresses the argument that a vegetarian diet does not build muscle mass as well as meat, the Beyond Meat website is covered with beauty shots and testimonials from elite athletes who subscribe to a plantbased diet.

Beyond Meat bases its products on more than a decade of research by University of Missouri professor Fu-Hung Hsieh on transforming soy proteins into palatable and consumer-acceptable products through high-moisture extrusion to produce a meat analog that resembles muscle food.

Financial backers include Microsoft’s Gates and Twitter founders Evan Williams and Biz Stone, among others. Last year, former McDonald’s CEO Don Thompson joined Beyond Meat’s board of directors. Also last year, General Mills bought into the enterprise.

“If you look at the overall trends — half the population is trying to avoid meat,” John Haugen, vice president and general manager for General Mills’ business development and venturing unit, said in October in announcing the Beyond Meat investment. “And they’re avoiding meat for many reasons — whether environmental, health or cost. Yet, demand for protein is as high or higher than it’s ever been. So we think there is a lot of opportunity here.”

GETTING INTO THE GAME

General Mills isn’t the only large packaged food maker getting into the meat alternative market.

“We believe that plant-based protein is at the tipping point of becoming mainstream,” Pinnacle Foods Chief Executive Bob Gamgort said when Pinnacle bought Garden Protein International for about $150 million in November 2014, just five years after the plant-based protein food maker was founded.

By then, its Gardein brand products were already in 22,000 retail stores, 5,000 restaurants and 100 college campuses in North America. Its products, including those that mimic chicken strips, tenders and burgers, are made with non-GMO soy, wheat, ancient grains and vegetables.

Kellogg owns the Morningstar Farms brand, which Experian research in 2015 showed leading competitors Kraft-owned Boca Burger, Gardenburger, Amy’s Kitchen, Lightlife and Yves in consumer preference. Its broad array of products spans vegetable-based burgers, dogs, patties, wings, crumbles, riblets, sausage, nuggets, meatballs and breakfast bowls.

Still, it hasn’t been a straight line.

Last April, Kellogg closed one of its MorningStar Farms plants, saying it had enough capacity to cover customer orders without it. Kellogg/Morningstar Farms, Amy’s Kitchen, Kraft/Boca and Beyond Meat all declined to be interviewed for this article.

No one is saying these products are poised to overtake the animal proteins they mimic any time soon. Radiant Insights valued the global meat substitute market at $3.34 billion in 2014, a mere fraction of the global meat market, conservatively estimated at over $675 billion by the U.S. Meat Export Federation. Still, Radiant predicts the meat alternative market will grow 7.5 percent annually to reach $5.81 billion by 2022.

Taking The hill

Even those who prefer a plant-based diet agree, however, that when it comes to taste (a big reason people eat whatever they eat), these products might be getting better, but they still don’t rival real meat.

Last year’s Protein and the Plate research project showed that for more than half of all meat-eating consumers, the taste of meat is the No. 1 reason they aren’t vegetarians.

After dining with Beyond Meat founder Brown on the company’s meat substitute products last fall, New York Times op-ed columnist Nicholas Kristof (who favors a plant-based diet) praised the faux chicken and beef crumbles as “triumphs,” but added, “If I were a cow, I might be a bit embarrassed by Beyond Meat’s meatballs and Beast Burger.”

Cost, including expensive research and development, could also hamper growth in the meat substitute market, according to Grand View Research. Also a factor: soy allergies and gluten intolerances. Soybased products currently dominate nearly four-fifths of global meat substitute consumption. And while seitan (a wheat gluten product) is expected to see strong growth in Asia, the “gluten-free” trend could be a factor in the United States.

A newer input to watch: jackfruit, which can be cooked up to mimic pulled pork. Last year Jackfruit Company launched its Refrigerated Meat Alternative and Upton’s Naturals launched Bar-B-Que Jackfruit and Chili Lime Carnitas Jackfruit.

“It’s too soon to tell if jackfruit is here to stay or is a flash in the pan, but it is indicative of the broadening range of innovation we are seeing in plant protein,” says Canadean’s Vierhile.

What meat processors say

While major meat processors are playing their opinions on the meat-substitute market close to the vest, some in the industry think it is time to take a look.

"I think there is a big push to show other protein alternatives, which may not mean someone is going straight vegetarian or vegan but looking for alternatives other than just meat for their protein,” says Jon Rocke, executive sales director of RMH Foods, which for many years competed in the “better for you” space with protein offerings.

“The ‘meat’ industry in America needs to become the ‘protein’ industry,” one Meatingplace reader who works for a major meat processor opined, in a comment on the website.

“If we don't, someone else will take that space and they may not be so friendly to our product lines. If I open a restaurant, it will need at least one or two vegetarian options. I can either buy those from the ‘protein man’ or I can buy them from someone after the ‘meat man’ leaves ... we need to be a one stop-shop.”

Though not specifically using meat substitutes in products, Hormel Foods spokesman Rick Williamson notes the company isn’t ignoring the alternative protein trend.

“Hormel Foods has been at the forefront of this trend and has leading brands in the non-meat protein category that are growing and resonating with today’s consumers,” says Williamson, noting Hormel purchased Skippy peanut butter, its Muscle Milk products and its Wholly Guacamole line.

Asked about whether they might consider adding meat-substitute products into their product mix in the future, however, both Hormel’s Williamson and Tyson Foods spokesman Worth Sparkman declined to speculate.

Perceptions loom large where food, health and public policy collide.

For confirmation, ask the egg producers who are building roomier hen enclosures at the behest of activist groups and lawmakers. Or note the number of companies — ranging from General Mills to Pizza Hut — that are reformulating products to be cage-free, GMO-free, antibiotic-free or artificial ingredient-free, to meet a perceived demand for simpler, more natural, more humanely produced foods.

Perceptions of the meat and poultry industry are a big deal, too. That’s why only to face a bigger war.

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WHY BUY?
The leading reasons consumers in the United States try meat alternatives:

33% I THINK THEY ARE HEALTHY.
31% I ENJOY THE TASTE.
31% I AM TRYING TO REDUCE MY MEAT CONSUMPTION.
30% I’M ADDING PROTEIN TO MY DIET.
23% I’M ADDING VARIETY TO MY MEALS.
23% I’M TRYING DIFFERENT VARIETIES.

Source: Mintel survey (2013)

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What, a burger?

Types of products featuring meat alternatives consumers bought* February-March 2015:

11.9% burgers
9.9% hot dogs
9.2% pizza
8.2% poultry
7.8% breakfast items
5.9% tofu
5.1% deli
4.2% ground or crumbled
2.5% tempeh/seitan

* Percentage of respondents saying they bought these Products
Source: Experian survey of 28,869 U.S. adults

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Hearts & Minds

With the unveiling of the final version of the federal dietary Guidelines, the industry may have won a battle only to face a bigger war.

[ PHOTO: "Meat Melts The World. Harden Your Resolve. Go Vegan PETA ]

by James Scarpa, contributing editor

Perceptions loom large where food, health and public policy collide.

For confirmation, ask the egg producers who are building roomier hen enclosures at the behest of activist groups and lawmakers. Or note the number of companies — ranging from General Mills to Pizza Hut — that are reformulating products to be cage-free, GMO-free, antibiotic-free or artificial ingredient-free, to meet a perceived demand for simpler, more natural, more humanely produced foods.

Perceptions of the meat and poultry industry are a big deal, too. That’s why the contentiousness between the industry and nutrition advocates over the role of meat in the recently updated 2015-2020 Dietary Guidelines for Americans could influence public attitudes about the $186 billion business. Politically, and relying on scientific data, the meat industry prevailed in some key arguments over the final wording of the guidelines — but at a potential cost.

Battle

The idea behind the Dietary Guidelines, developed by the U.S. Department of Health and Human Services and the USDA, is to urge Americans to adopt science-based improvements in their eating habits to improve health and prevent chronic illnesses such as Type 2 diabetes, hypertension and heart disease.

Suffice it to say that the two sides do not agree on how to achieve that goal.

Last year, the Advisory Committee’s scientific report to the agency secretaries included advice to Americans to follow dietary patterns lower in meats, especially red and processed meats, for weight management and disease prevention. However, meat industry associations, working with allies that included Congressional Republicans, marshalled a body of scientific evidence and public comments that challenged that advice and ultimately upheld the traditional role of meat as part of a healthy diet in the final version of the new guidelines.

The reaction has been predictably polarizing. A statement by the North American Meat Institute expressed appreciation to USDA Secretary Tom Vilsack and HHS Secretary Sylvia Burwell “for providing a science-based approach to healthy eating.”

The other side was not pleased. Blogging on Huffingtonpost.com, Dr. David Katz, founding director of Yale University’s Prevention Research Center and founder of the True Health Initiative, a coalition of health experts, deemed the new guidelines “a national embarrassment” and “a willful sacrifice of public health on the altar of profit for well-organized special interests.”

‘SUSTAINABLE’

Then there was the issue of “sustainability.” The committee’s recommendations were that U.S. consumers make food choices that are environmentally “sustainable” — or that cut back on animal protein, prompting strong arguments from the meat industry. But in the end, Vilsack likened committee members to his 3-year-old granddaughter. “She does not have to color inside the lines,” he said in an interview with  The Wall Street Journal and in various speeches in early 2015. The Advisory Committee can recommend such a change, but the original mission of the guidelines is strictly nutrition-focused, and “I am going to color inside the lines,” Vilsack said.

The issue of “sustainability” is not addressed in the federal Dietary Guidelines for 2015.

In the wake of these victories lies the question of whether the idea of a Big Meat special interest will take hold in more consumers’ minds, presenting a tempting target for their nutritional and environmental concerns.

“I think that kind of negative attitude toward the industry is becoming more widespread,” says Don Stull, professor emeritus, sociocultural anthropology, University of Kansas, who has studied the meat industry for three decades.

However, in Stull’s opinion, the Dietary Guidelines, although influential among schools, institutions and policy makers, probably has minimal direct impact on average consumers.

“I assuredly don’t think the industry should ignore those criticisms,” says Stull of the health advocates’ stances. “But I don’t think they are the major challenges, the major dangers, that are confronting the industry.”

More pressing concerns are issues such as animal welfare, environmental sustainability and the treatment of processing plant workers.

PROBLEMATIC

But the tussle over the guidelines and the potential public fallout is problematic, says Chandler Keys, principal of the Keys Group, a Washington, D.C.-based lobbying and consulting firm. “It is not all upside to getting in the debate. There are downsides. You are going to take a two-by-four to the head occasionally,” he says.

The industry erred by not taking action early in the process of updating he guidelines, Keys says.

“We didn’t sound the alarm a year ago when we first saw the problem,” he says. “We saw that certain people on the Advisory Committee were hijacking it. We saw that career bureaucrats at USDA and HHS were guiding the committee in an anti-meat agenda. We saw sustainability creeping into the debate. And we did nothing except go to meetings.”

The process of updating the 2015-2020 Guidelines was similar to that of previous updates, although some of the content differed, according to Kristina Butts, executive director of legislative affairs for the National Cattlemen’s Beef Association. This time, committee members introduced topics beyond nutrition, such as sustainability, taxing food and marketing to children.

“The Advisory Committee going beyond their task at hand and bringing in outside topics is really what raised the interest, not only of stakeholder groups like NCBA, but also the oversight from Capitol Hill’s perspective,” Butts says.

VILSACK

If not for the influence of a strong, sympathetic agriculture secretary with close ties to the White House, meat might have been carved out of the guidelines, according to Keys.

“We were just lucky enough that this secretary is so close to the president, and has been such a good soldier for him, that he overcame the opposition out of HHS and the opposition from the first lady’s office, and reined this Dietary Guidelines into a livable document for the industry and a more balanced, well-thought-out, more common-sense document for the public,” he says.

And Keys says he has not seen a public backlash against the industry. In fact, if there was a PR hit, the academians on the Advisory Committee might feel it, he says: “You just see that the general population gets sick and tired of elites telling them what to do,” he says.

Clearly, the last word has yet to be uttered on meat and the Dietary Guidelines. Health advocates are promising a renewed effort to connect meat with sustainability and other hot-button issues in the 2020 guidelines update process.

While an overwhelming proportion of Americans eat meat, “We need to do a better job of connecting with our customers and talking to them about meat in the diet than we have,” he says.

NAMI president and CEO Barry Carpenter says that his association is already analyzing the relevant research to get ready for the next go-round.

“Frankly, we are not waiting until 2020 to start working on this issue,” Carpenter says. “We are already looking at the science. We are going to be proactive as we move toward 2020.”