With growing consumer interest in cutting – or ending – meat consumption, the sector’s majors are muscling in. Dean Best looks at a flurry of NPD activity in the US, led by Tyson Foods.
Meat consumption in the US is riding high – but demand for alternatives, is too.
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And, in recent days, there has been a flurry of news out of the US from a clutch of the country’s meat majors making moves into alternative products, indicating they have their eyes firmly on the growing number of flexitarians in the market – and targeting them in an interesting way.
Last week, three of the US sector’s most notable names showed they believe they can entice consumers looking to reduce their meat consumption by launching so-called ‘blended’ products.
US poultry heavyweight Perdue Farms has unveiled a brand, Chicken Plus, under which chicken products containing vegetables and plant-based protein will be marketed.
Hormel Foods, another US business centred on meat, told an investment conference in Paris it would look to continue its development of products containing meat and other proteins. (It already has the Applegate Blend Burger).
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By GlobalDataAnd, most strikingly, Tyson Foods, one of the largest players in the meat sector globally, rolled out a new brand – Raised & Rooted – through which it will market its own blended fare.
More consumers in many markets worldwide – not just the US – are warming to the idea of reducing (or even ending) their meat intake. Demand for alternatives to meat is rising.
The question for strategists at conventional food manufacturers – and it’s perhaps a more pointed question for meat processors – is how best to meet that demand.
Should they squarely target the vegetarian and vegan cohorts by launching products for them (and/or acquiring businesses that have done so?) Or should they look to capture the interest in alternatives to meat among what is a larger group of consumers, the ‘flexitarians’, meat-eaters who still want to eat meat but are looking to make changes to their diets?
Flexitarians may – and do – try out veggie and vegan products. But could a different type of product – meat ‘blended’ with vegetables and/or other proteins – perhaps appeal more to a demographic still eating meat?
For many companies on both sides of the fence, be they in the meat business or meat-free pure-plays, a popular strategy to follow is to battle for the flexitarian consumer.
The number of vegetarians and vegans may be growing but still remains small as a proportion of the population in many markets.
Meat-free pure-plays like Beyond Meat have often said that, as well as targeting veggies and vegans, they are aiming at meat-eaters who want to cut but not end their consumption.
For those companies in meat, facing what some see as structural pressure on the long-term future of their business, one tactic could be to launch vegetarian or vegan products or use M&A to enter those segments – and there are many businesses that have done so.
Another strategy, as Perdue, Hormel and Tyson are demonstrating, is to play to your strengths. Tyson’s new Raised & Rooted range does include plant-based nuggets but the ‘blended’ play it and its peers are also following is trying to appeal to the desire among flexitarians to lower their meat consumption on health grounds while maintaining the taste of meat those consumers love.
“This is not about vegans and vegetarians, it’s for people that want to make a good call today and be just a little bit healthier. It’s a big market,” Susie Fogelson, a New York-based food marketing strategist who runs her own consultancy, F&Co., says.
“I think Tyson is moving into a have-your-cake-and-eat-it-too mindset speaking to the flexitarians preferences of today’s consumer. Meat consumption – in the US at least – is up to an all-time high, yet plant-based meats usage is also at an all-time high. People want to make better choices day to day but still want to enjoy flavour and textures and have rich food experiences. I think they’re doing what every other big food company needs to be doing: testing, expanding and exploring food.”
It has been Tyson’s new products that have grabbed most of the headlines in the past week, in part due to the company’s position in the global meat sector. If anyone needed any confirmation alternatives to meat is a category here to stay and is set to be a sizeable market in the years ahead, Tyson’s formal entry into the space provides the answer they need.
Tyson had, of course, been an investor in Beyond Meat, snapping up a stake in the Beyond Burger maker in late 2016. The meat giant exited Beyond Meat’s share roster before the upstart’s IPO this spring. Reports said tensions had emerged between the two since Tyson made clear publicly at the start of the year it would launch its own meat-alternative products. Tyson never commented on those reports but did tell just-food for this article the launch of its own products was confirmation it had ended its investment in Beyond Meat because it believed it had the R&D to make its own products and no longer wanted to own a stake in a competitor.
The company’s strategy has attracted praise. “I think blended products are a great idea because these plant-based meat products that are in such high demand are really targeted to carnivores, not vegetarians,” Rebecca Scheuneman, an equity research analyst covering Tyson for US financial services firm Morningstar, says. “Vegetarians make up a very low percent of the US population – about 5% – so it’s been a successful strategy to provide products for carnivores who are looking to switch some of their consumption from protein to vegetables. One shortcoming of 100% plant-based products is that most people agree that the products do not taste as good as meat.”
The Raised & Rooted range does contain a squarely plant-based product, alternatives to chicken nuggets, raising the possibility of some consumer confusion about the different products under the brand, although Scheuneman points to the work Tyson has put in on packaging. “I think they have done a good job designing packaging for the 100% plant-based nuggets that clearly conveys that the nuggets are not blended.”
Also among Tyson’s new products is a line of blended items sold under an existing meats brand, the sausage brand Aidells. More scope for confusion? Not so, Scheuneman suggests, setting out why she thinks Tyson has used the name.
“I think it’s prudent for Tyson to launch the Aidells blended products under a new Aidells sub-brand, Aidells Whole Blends. Building a new brand from scratch is very expensive. The sub-brand clearly communicates it’s a blended product, different from the traditional Aidells line,” she tells just-food. “Although, from what I have seen, I think the packaging can do a better job of explaining exactly what the product is and the benefits that it offers.”
Meanwhile, Victor Martino, a San Francisco-based food sector consultant and analyst, sees another benefit for Aidells. “In the case of Aidells, which started out as an entrepreneurial brand in California, it could be a net benefit because it might bring back some of the more artisan brand-focused consumers who’ve moved on to newer, more hip small brands over the last few years. It might invigorate the Aidells brand a bit,” he says.
However, Fogelson does have misgivings about the move on Aidells. “Obviously they wanted to keep the equity of Aidells so they launch an extension vs a new product. This one is a bit riskier. I think most consumers feel Aidells is a blend of quality, antibiotic-free meats so this calls into question ‘What’s in the real Aidells?’,” she says. “This is a misfire because it unfortunately makes one think there is something not ‘whole’ about the original Aidells.”
Nonetheless, it is clear the likes of Beyond Meat and Impossible Foods will be watching the performance of Raised & Rooted – and of Perdue’s new line for that matter – very closely. Having the country’s meat majors park their tanks on the Californians’ lawns will at least make the meat-free pure-plays sit up and take notice, for all the positive headlines they have attracted (and in Beyond Meat’s case the investors, too).
Tyson has, in less than 1 yr, developed Raised & Rooted plant-based nuggets & blended burgers, which they bill as healthier than competing plant-based-only patties. Nestle has done the same and others will follow. Let’s see how the ‘surviving of the fittest’ show will turn out. pic.twitter.com/F2LD6sHxuf
— Frank Mitloehner (@GHGGuru) June 13, 2019
Nonetheless, Tyson, Perdue et al will be facing businesses – albeit smaller – that have already carved out footholds and garnered consumer support. “The larger question is how Tyson will do with the brands going up against not only Beyond Meat and Impossible Foods, which have grabbed first-mover advantage and consumer mind-share, but also how the company will fare in what are rapidly becoming super-crowded spaces – faux meat and blended meat. Tyson needs to grab a place in consumers’ minds fast in these respective categories,” Martino asserts.
And Scheuneman underlines a broader question with which all food manufacturers are wrestling but an issue often highlighted when it comes to products positioned as alternatives to dairy or meat – the length of their ingredient decks.
“I think the bigger question with plant-based meats is how willing consumers are to shift back to consuming products with ingredient lists, after moving away from that for the past few years.”
