(Bloomberg) -- Creating a veggie burger that tastes like beef has been a kind of holy grail for meatless food makers since bland-tasting grain patties first arrived in U.S. supermarket freezers during the 1980s, back when staples of health-conscious hippie menus began to work their way into the mainstream.
With granola bars, soy milk and organic produce sold almost everywhere today, companies including Impossible Foods Inc. and Beyond Meat have developed vegetarian products that may be as close as anyone has come to mimicking real ground beef. They have the same fibrous texture, sizzle on the grill, and even excrete what looks like red beef juices when you bite into the burger.
Healthier and more natural foods are a growing share of the $1.5 trillion spent annually by Americans to eat, as consumers demand products with less fat or cholesterol that are safer for the environment. Meat processors Tyson Foods Inc. and Maple Leaf Foods Inc. are investing in plant-based proteins as alternatives to pork, chicken and beef, while billionaire Bill Gates and venture capitalist Vinod Khosla say meatless meat is the food of the future.
“We’re not telling anybody not to eat meat,” said Ethan Brown, the chief executive officer of El Segundo, California-based Beyond Meat, which announced last month it will expand U.S. distribution of its Beyond Burger with a deal to sell it at more than 280 Safeway Inc. supermarkets in California, Nevada and Hawaii. “This is a just a new form of meat.”
Demand is shifting toward plant-based proteins made from lentils, quinoa, beans and peas as more shoppers see their buying decisions as impacting the environment and their own health, according to a January report from Sustainalytics, an Amsterdam-based corporate researcher.
Annual global sales of plant-based substitute meat have gained 8 percent a year since 2010, to about $2 billion currently, and are growing at twice the rate of processed meat, according to an Oct. 18 report from Bloomberg Intelligence. The market for meat substitutes may grow 8.4 percent annually over the next five years, with China helping to speed the expansion as it seeks to cut meat consumption in half by 2030, according to estimates in the Sustainalytics report.
In the U.S., the transition is well underway.
Beyond Meat’s burgers -- made with peas, coconut oil and beet juice (for the blood effect) -- have been available in Whole Foods Market Inc. stores since October, and the Safeway deal announced May 25 expanded distribution even further. It’s also sold at markets in Hong Kong as well as 13 on-campus dining halls at Yale University in New Haven, Connecticut.
Another new product is from Impossible Foods, a Redwood City, California-based startup that makes an animal-free burger from wheat, coconut oil and potatoes. It isn’t currently sold in stores because the company wants to first establish its brand in popular and high-end restaurants. It’s on the menu at 20 eateries now, and with the expansion of a production plant in Oakland later this year, Impossible Foods is targeting sales to more than 1,000 restaurants.
“That’s been a very deliberate strategy,” Impossible Foods CEO Pat Brown -- who isn’t related to the Beyond Meat CEO -- said in a telephone interview. “It’s not until we’re substantially larger that we’ll go into grocery stores.”
The Impossible Burger already is available on several coveted New York menus, including at David Chang’s Momofuku Nishi restaurant, which Brown said gives his product some foodie cred for meat eaters who might otherwise consider the patties a science-fair project. “That’s a priceless endorsement,” he said.
Investors are lining up, too. Springdale, Arkansas-based Tyson Foods, the largest U.S. meat producer, acquired 5 percent of Beyond Meat, and a venture unit of Minneapolis-based cereal maker General Mills Inc. also holds a stake. At Impossible Foods, stakes are held by Khosla Ventures, Google Ventures and UBS AG. Gates, the world’s richest person, is an investor in Beyond Meat and Impossible Foods.
“We love the product, we love the sustainability, the attitude that they have,” Tyson CEO Tom Hayes said in an interview. “Plant protein is growing faster than animal protein. For us, we want to be where where the consumer is.”
While alternatives to meat won’t replace the real thing, more companies are investing in the industry and reformulating recipes so consumers can’t tell the difference, said Kenneth Shea, a food analyst at Bloomberg Intelligence in Skillman, New Jersey.
“Consumers, more and more, think in terms of sustainability,” Shea said. “They’re looking to eat more plants as opposed to red meat due to the perceived health benefits.”
While most consumers want to keep eating meat, they’re becoming more informed about the consequences on the environment and sustainability. It takes about 15,000 liters (3,963 gallons) of water to produce 1 kilogram (2.2 pounds) of beef, compared with 1,600 liters for a kilo of wheat, according to estimates from the Water Footprint Network.
“Clean meat” production requires far less land and water than conventional meat, requires no antibiotics, and eliminates the environmental repercussions of animal waste and contamination during runoff, according to a report from Washington-based non-profit The Good Food Institute.
Still, most Americans don’t want to sacrifice taste.
“They’re hungry for a solution,” Beyond Meat’s Brown said. “It’s up to science and our efforts to get it to the point where it’s completely indistinguishable from its animal equivalent.”