Tyson Foods Inc. announced Thursday it's investing even more into what many think is the future of meat -- a kind without animals.
Through Tyson's venture capital fund, the company said it purchased a higher ownership stake in Beyond Meat during the plant-based-"meat" company's latest round of fundraising, which totaled $55 million at Thursday's close.
Terms of Tyson's latest agreement were not disclosed.
But Tyson Foods established a 5 percent stake with the meatless-meat producer this time last year, suggesting that the Springdale-based company has seen a shift in consumer demand for vegetarian and vegan meat alternatives.
"This investment reinforces our focus on protein and enables us to support Beyond Meat's efforts to produce new, leading edge products," said Justin Whitmore, executive vice president of corporate strategy and chief sustainability officer, in a statement.
Other notable investors include Bill Gates, Leonardo DiCaprio, Twitter co-founders Biz Stone and Evan Williams, and Don Thompson, the former chief executive officer of McDonald's.
California-based Beyond Meat said it wants to use its latest round of funding to more than triple its production, fund further research and development projects, and expand sales and distribution.
The meatless meatpacker has had significant growth this year alone thanks to the Beyond Burger, a gluten-free veggie patty made from pea and soy protein. Now it's sold in more than 5,000 stores -- including those owned by Kroger and Albertsons Cos. -- and is on the menus of nearly 4,000 food establishments. Most recently, TGI Friday's did a soft launch of the plant-based burger in Massachusetts and plans to roll out nationwide to 469 restaurants next year.
Ken Shea, Bloomberg senior analyst of food and beverage, said the shift in demand toward plant-based meats is being driven largely by millennials, who he says are likely more aware of sustainable food practices and their own health.
Compared with the rest of the meat industry, "the plant-based meat segment is small ... but growing quickly," Shea said.
A couple of studies showed the short-term effects of meatless meat diving further into supermarkets and diners won't make much of a splash; however, the long-term effects are projected to make significant ripples across meat industries.
The cost difference alone between plant-based and lab-grown meats compared with traditional meat options is enough to sway consumers away for now, according to a study from Colorado-based CoBank, which serves agribusiness.
Currently, it costs Memphis Meats $2,400 to produce 1 pound of hamburger using stem cells, down from $18,000 last year, it read. However, Memphis Meats, like other meat-culture startups, forecast lab-grown meats to eventually be cheaper than the real thing.
Beyond Burger patties are sold in Little Rock and Fayetteville Whole Foods locations for $5.99 per unit. But plant-based burger sales have dipped slightly for the holiday season, an employee said over the phone.
On average the Fayetteville store sells about 42 units of Beyond Burger per week.
"If we didn't have that, we wouldn't have enough holding power," he said. "I'd have to constantly restock the fridge."
Business on 12/09/2017
Print Headline: Tyson boosts stake in meatless 'meat'