Midlands Business Journal • JUNE 28, 2019 •
As new market booms, which meat alternative will win out? by Kristen Leigh Painter
Mighty Spark Foods, a Minneapolis maker of lean natural meats, links and blended patties, filled its corporate website for months with recipes and news about its executives and charitable work. Then came the Beyond Trends Meat IPO. The Los Angeles-area maker of faux meat based on pea protein and other ingredients went public last month, and its stock price jumped more than any other IPO this year. An article then appeared on Mighty Spark’s website headlined, “The Truth About Lean Poultry Compared to ‘Faux Meat.’ ” It said that its patties have fewer calories, fewer carbs, less fat and less saturated fat than Beyond Meat’s. “I don’t think the average consumer understands that,” Nick Beste, Mighty Spark’s founder and chief executive, said in an interview. “I know my girlfriend doesn’t and I run this company.” Beyond Meat’s meteoric stock-market debut has shown there’s big money in alternative meats, perhaps far more than entrepreneurs like Beste ever expected. Its shares opened at $25 on May 2, briefly touched $200 recently before falling to around $165, a level that placed the company’s market value at $10 billion. Now, investors are looking more seriously at other makers of alternative meat products. And industry giants like Hormel and Tyson said they are working on their own plant-based proteins. Like Beyond Meat, scores of small companies are trying to do meat differently. Some are raising meat from cells in a lab while others make imitations from newly concocted plant-based ingredients. All these innovators are trying to connect with consumers, as well as investors, and are preaching their own different virtues: environmental, social or nutritional benefits. And in the weeks since the Beyond Meat IPO, the tone coming from these entrepreneurs’ firms has changed. While they
Minneapolis-based Mighty Spark is one modern meat company trying to stand out in a crowded field of competitors. Here, Mighty Spark founder, Nick Beste in his dog friendly office near Loring Park. (Brian Peterson/Star Tribune/TNS) previously extolled the virtues and benefits I think it’s good for consumers to have those of their approaches against conventional meat choices,” Harris said recently. “But I am products, they are now drawing sharp contrasts resentful of the criticism that each of these with each other — with knives unsheathed. proteins is offering of others.” “The competitors in the space are freaking The past year has given rise to a plethora out because there is so much attention right of alternative-meat companies that fall into difnow,” said Laurie Demeritt, chief executive ferent segments and claim different advantages of consumer-food research firm the Hartman over regular meat and each other. Group. Beyond Meat and Impossible make fake For instance, Impossible Foods, which meat from non-animal ingredients. Cultured makes a plant-based burger patty similar to meat is grown in a lab from the cells of aniBeyond Meat’s, just published an environmen- mals. Blended-meat products, like Applegate’s tal-impact report that took aim at a practice Blend Burger or Mighty Spark’s Southwest called regenerative grazing, which yields meat Chicken Patty, aim to reduce the amount of from animals raised in a manner that reduces meat in a product by mixing in vegetables, their carbon impact. Impossible called such beans and nuts. meat “the ‘clean coal’ of beef.” And then there is the regenerative-agriculThat angered Will Harris, a well-known ture movement, led by firms like White Oak rancher and leader in the regenerative-agricul- Pastures, Harris’ Georgia-based company that ture movement. “I welcome the discussion and supplies meat to Epic Provisions, a General the new meat products that are being offered. Mills brand. Such producers rotate animal grazing and take other steps that some said more than offset the carbon cost of raising an animal on a farm. The more that industry creates new, excitform a powerful combination that will allow you to make up for lost time. Likewise, mov- ing options, the more consumers will experiing to a cheaper locale while also moderating ment, Demeritt said. “People are looking for your lifestyle can produce substantial savings a diversity of choices because they are eating in retirement. Plus, more and more retirees (protein) so much,” she said. Vegetarianism and veganism rates remain are choosing part-time employment, which not only supplements retirement savings, relatively flat, while consumer willingness to but provides an opportunity to stay mentally swap out some meat for some plant-based and physically active and engaged in the options is growing. But advances in food technology have led to a flood of new options community. Regardless of which solutions you that are moving the segment far beyond the old choose, the key is to ramp up your retirement black-bean or garden burger. The lab-raised meat category attracted planning now, rather than worry about what three times more investment capital, about you didn’t do in the past. CFP Professional Daniel Gannon, pres- $50 million, in 2018 than the year before, ident of Union Street Financial in Kennett according to the Good Food Institute, an Square, Pennsylvania, recommends two final interest group advancing cell-based and plantbased meat alternatives. Minnetonka-based exercises for his clients: Determine how much income you will Cargill Inc., one of the world’s largest meat be receiving from Social Security, pensions, processors, has invested in two cell-based meat and dividends and interest from investments. startups, Memphis Meats and Aleph Farms. Meanwhile, sales of plant-based meat Try to live for two years off of that amount of income prior to retirement. Gan- alternatives grew 9.1% in the year ended May non says that clients “find this to be a great 19, according to SPINS, a Chicago-based ‘gut check’ to confirm whether or not they are consumer data firm that specializes in specialty and natural foods. indeed financially ready to retire.” Proponents for both lab-raised and plant©2019 Bankrate.com based meat products said they provide a way Distributed by to eat meat — or a meat-like substance — Tribune Content Agency, LLC.
Six last-minute retirement planning strategies Continued from preceding page. home, you might want to consider selling and using the proceeds to top off your retirement account. This is a radical move, but it is often possible to substantially reduce your total housing expenses by renting or by buying a smaller place. Another possibility is getting a reverse mortgage, which allows you to continue living in your house while receiving monthly income. Regardless of whether you own a home, moving to a less expensive location can make a difference. Individuals in coastal areas where the cost of living is high may be able to stretch their retirement dollars further by moving to less expensive locales. For example, the cost of living in Bozeman, Mont., is 29% less than in San Diego, and the cost of living in Orlando, Fla., is less than half that of living in New York City. Less expensive locales such as Florida and Arizona also draw large numbers of retirees, offering the possibility of a robust social life and attractive recreational opportunities at a reasonable cost. 6. Take a combo approach Use your creative skills to combine some of these solutions. For instance, delaying your retirement date while saving like crazy can
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without contributing to the high greenhouse gas emissions commonly associated with traditional livestock farming. Meanwhile, advocates of regenerative grazing said their product, when raised using the best practices, goes a step further by actually creating a carbon net-negative. Harris points out that a recently completed life-cycle analysis by independent-research firm Quantis found that White Oak Pastures contributed a negative 3.5 kilograms of carbon for every kilogram of meat produced, while the Impossible Burger was a net emitter. But a separate life-cycle analysis by the same research firm found Impossible Burger reduced other environmental loads, including water use and methane emissions from cattle. Still other innovators said the best way to change and improve the meat business is to simply reduce the amount of meat in a product by lacing it with vegetables. This has given rise to the so-called blended-meat products. And beyond the nutrition debates, there are social arguments. Proponents of regenerative agriculture say their system can help restore rural America’s economy. And Mighty Spark uses proceeds from its product sale to donate meals to those in need. “Wherever you can see a benefit, there is a trade-off,” said Jennifer Schmitt of the University of Minnesota’s Institute on the Environment. “It matters what you care about” in determining what product you are going to choose. But research continues to show that personal health and wellness remains the most important food attribute consumers seek. And in the weeks since the Beyond Meat IPO, a robust debate emerged about whether its products are nutritious. “Regardless of what a professional (nutritionist) might tell you, the consumer perception is that these products are better for you than meat, and they are better for you then the first generation of meat alternatives were,” Demeritt said. “I do think the jury is still out on whether that perception of health will change or not.” That’s what Mighty Spark wants to educate consumers about. Its Southwest Patty is 50% chicken and 50% vegetable add-ins. Mighty Spark, with revenue just below $10 million in 2018, is quickly working to develop additional blended-meat products. If everyone were to adopt products like this, it would be a good step toward reducing global meat consumption, said James Gerber, at the U’s Institute on the Environment. “When you think about … how we struggle and fight over car efficiency standards of 5% change per year and here is 50% stat, that’s huge,” Gerber said. Demeritt said she thinks blended products are the most likely to succeed long-term. “They have some of those taste attributes and the consumer feels good about eating less meat,” she said. As for all the companies bashing one another, Harris of White Oak Pastures in Georgia, hopes producers keep their minds open and let the products do the talking. “What’s true is there are many, many consumers, that have their own reasons for eating or not eating something and we as producers should be respectful of that and we should do that by respecting the truth of what we do,” Harris said. ©2019 Star Tribune (Minneapolis) Visit the Star Tribune (Minneapolis) at www.startribune.com Distributed by Tribune Content Agency, LLC.