The World’s Top Meat Supplier Is Eyeing a Plant-Based Company
Demand for faux burgers is growing so rapidly that JBS SA, the world’s biggest meat supplier, said it will likely set up a new global company focused solely on plant-based products.
Meat from animals will be a pricey luxury in the future, and people will have to turn to vegetable-derived alternatives, which will be cheaper, JBS’s Chief Executive Officer Gilberto Tomazoni told Bloomberg in an interview. In addition, the world’s population is booming and expected to reach 10 billion by 2050. The amount of meat needed to satisfy the world’s protein needs won’t be possible to produce.
“Plant-based will help us to reduce this protein gap with more affordable products compared with animal protein, which will be more premium,” Tomazoni said. “We see plant-based as an independent business in the future.”
Separating plant-based and animal protein businesses is a good idea because of cultural differences in the two spaces, according to Robert Lawson, managing partner of Food Strategy Associates and former CEO of Quorn. While the meat business is about profit maximization, plant-based is about capturing market share, he said.
The winner in plant-based “isn’t the business who made profits each year and captured 1% share of the market,” he said. “It’s the company who invested in making the best products and built the best brand. The objective is to capture as much of the growth as you can and manage the profitability later.”
Brazil-based JBS is just one of many sprawling, legacy food companies trying to up their meat-substitutes game as burgers and sausages made from plant proteins become mainstream. Consumer demand has soared after startups like Beyond Meat and Impossible Foods popularized veggie burgers that imitate real beef. The likes of McDonald’s and Starbucks have added alternative meat items to their menus.
JBS, like U.S. rival Tyson Foods Inc., entered the plant-based meat market in 2019, and regional teams across the globe developed products. The new company Tomazoni envisions would gather all those regional businesses in a global enterprise.
The company already has a sizable footprint, with about 57% of the plant-based burger market in Brazil. In Europe, its Moy Park subsidiary supplies faux chicken burgers. It also has 10 plant-based products in more than 3,000 U.S. stores under the OZO brand, where sales rose 300% last year.
It will still be a challenge to compete with companies like Beyond Meat that created the fake meat craze. Investment money has been pouring into alternative protein startups, which raised a record $2.4 billion of funding in 2020, according to market researcher CB Insights.
“We have the basis to grow on plant-based: innovation capacity, investments in research, agreements with global companies for ingredient supplies, presence in retail,” Tomazoni said.
For now, JBS’s focus is developing new products and trying to better understand the market, Tomazoni said. While it’s still unclear how much plant-based meat will grow, one thing is for sure: it’s not just a niche market. Even now, rising middle-class populations in Asia and Africa are clamoring for more protein in their diets. Protein production must rise 70% in 30 years to meet demand, Tomazoni said, citing UN figures.
“This is a long-term race,” he said. “Consumers will have more choices.”
©2021 Bloomberg L.P.