BY KAREN KWOK

Elon Musk successfully forced Volkswagen to embrace the electric vehicle big time. In 2022, Brazil’s $15 billion meat giant JBS and $31 billion U.S. rival Tyson Foods could end up trailing Tesla’s alternative protein equivalents, Beyond Meat and Impossible Foods. Yet just as VW aims to overtake Tesla’s production by 2025, there’s a way for incumbents to win.

Making meat the old-fashioned way emits over 40% of annual global methane production and wastes too much land, water and time. To make the food system more sustainable, technologies that imitate meat are flourishing. The $4 billion Beyond Meat and Impossible Foods, which may seek a public listing in 2022, have both launched plant-based burgers at major restaurant chains such as McDonald’s.

Doing nothing is unwise. Big traditional producers face more costs: carbon taxes could cost beef companies up to 55% of current average EBITDA by 2050, according to research group FAIRR. And more governments are subsidising the alternative protein sector, which Credit Suisse estimates could reach $555 billion of sales by 2050 and account for 25% of the global meat market, up from 5% in 2030. Meanwhile, apart from plant-based meat, there are funding gaps in technologies that create slaughter-free meat grown from animal cells. This so- called “lab-grown” cultivated meat could reach $25 billion of sales by 2030, according to McKinsey. 

As yet, traditional players are only getting involved in a piecemeal fashion. JBS has recently bought a Spanish cultivated meat startup, while $3 billion Asia-based Thai Union has backed insect-protein firms. But no one has yet committed to serious top-line targets. Aside from Toronto-listed $3 billion player Maple Leaf Foods, 51 traditional meat and fish producers have yet to disclose their alternative protein sales, according to FAIRR. Chinese meat producers like $40 billion Muyuan Foods have zero exposure.

That may change in 2022. Valid targets include hot startups in cultivated meat, fermentation or even insect protein. Temasek-backed Eat Just was last valued at $1.2 billion and has regulatory approval to sell cultivated chicken in Singapore. DSM-owned Meatable and Leonardo DiCaprio-endorsed Mosa Meat and Aleph Farms could be in the mix. Meanwhile, upstarts with considerable scale like UK-based Meatless Farm, which supplies pea protein to Pret A Manger and over 20 countries, are good alternatives. So is France’s Ynsect, which sells buffalo mealworm protein that’s mixed in faux meat. Big Meat, in other words, has multiple ways to beef up.

First published December 2021