Tyson Embraces Faux Fish by Backing Maker of Plant-Based Shrimp

(Bloomberg) -- Plant-based seafood just got a deep-pocketed backer. The question now is whether consumers are actually asking for faux fish.

Meat giant Tyson Foods Inc.’s venture arm bought a minority stake in New Wave Foods, a maker of plant-based shrimp, the companies announced in a statement Thursday. Tyson declined to disclose the size or value of its investment but says Tyson Ventures’ policy is to stay below 20% ownership.

Through the tie-up, both Tyson and New Wave are hoping to capitalize on the recent surge in popularity of plant-based proteins, which has made alt-meat maker Beyond Meat Inc. a Wall Street darling and catapulted soy-based Impossible Foods Inc. patties onto Burger King menus nationwide.

“What we saw with crustaceans was a big white space,” Tom Mastrobuoni, chief financial officer of Tyson Ventures, said in an interview.

Tyson’s investment vehicle has had success spotting up-and-comers: It was an early investor in Beyond Meat but exited before the company’s initial public offering.

Faux Fish

The plant-based seafood industry is nascent compared to the imitation meat and dairy categories, but both big companies and rising startups are now feeding the increasingly crowded field. Good Catch makes “tuna” with a blend of proteins from peas, soy, chickpeas, lentils and other beans, while Conagra Brands Inc.’s Gardein sells Golden Fishless Filets. Even trendy Impossible Foods has said it’s working on fishless fish.

But the category is still so small that the Plant Based Foods Association doesn’t even track it within the $4.5 billion U.S. retail category. “This presents tremendous opportunity,” Michele Simon, the group’s executive director, said of the wider imitation-fish category. “Any company that can crack the code of great-tasting, affordable options is well positioned to succeed.“

How consumers will respond, though, remains to be seen. The big draw for meat alternatives is the perceived health benefit, but fish is already a healthy food, filled with protein and Omega-3 fatty acids.

Environmental Case

The environmental argument for products like New Wave’s is a stronger one: Oceans are overfished and shrimp farming in Southeast Asia is a main driver of the destruction of mangroves, a 2017 report found, which protect against rising sea levels and act as carbon sinks.

While plant-based products would sidestep those issues, not all shrimp is produced in a way that harms the environment, said Scott Nichols, chairman of the board of the Aquaculture Stewardship Council. Shrimp that comes with an Aquaculture Stewardship Council or Seafood Watch seal of approval is produced responsibly, he said. Monterey Bay Aquarium Seafood Watch has 67 “best” or “good” shrimp choices, as well as 44 to avoid.

That means would-be shrimp-eaters with environmental concerns have alternatives available already, even before New Wave’s mock shrimp hits food service operators early next year.

Still, one advantage that New Wave’s “shrimp” might have over the real stuff: price. “Our price will be stable,” New Wave’s Chief Executive Officer Mary McGovern said, noting the price will be “comparable” to standard shrimp but less volatile.

The company declined to disclose information on the protein source in its shrimp until the product is closer to market. It had used soy as its primary ingredient, but has since developed a new soy-free recipe, it said. Seaweed is also an essential ingredient, according to co-founder and chief technology officer Michelle Wolf. “Without it, we wouldn’t have any sort of texture,” she said.

To contact the reporter on this story: Deena Shanker in New York at dshanker@bloomberg.net

To contact the editor responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net

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