Cattlemen not worried about growing meat alternatives

Barbara Soderlin
Associated Press
The Impossible Burger is show at Stella's, in Bellevue, NE. The burger is made from plant protein.

OMAHA, NE (AP) — Nebraskans know where their meat comes from: the farms, ranches, feedlots and packing plants that make the state the nation's top beef producer and a growing supplier of pork and poultry.

But what happens to the Beef State's massive livestock industry if Americans switch to "meat" made from plant protein — or from muscle tissue grown not on farms but in big industrial tanks?

It might sound far-fetched, but the plant products have launched and the factory-grown meat may be about to, with claims they are better for the environment than meat from livestock, and taste just as good.

Will they take off? No way, a steak-lover might say. But proponents point to the dairy aisle: Dairy milk sales are falling as shoppers pick up soy, almond, pea protein and other "milk" in mainstream supermarkets.

Alternative meats

A future where lab-grown and plant-based "meat" is also mainstream may not be that far off, the Omaha World-Herald reported . Expect to hear a lot about alternative meats in 2018: The industry is at a turning point thanks to investment from big names like Bill Gates, and big food companies like Tyson and Cargill.

"Technology will begin to disrupt the traditional food chain in 2018 as enterprising manufacturers aim to replace farms and factories with laboratories," market research company Mintel said in its recent annual food and drink trends report.

Plant-based versions of familiar foods such as burgers and chicken strips are already available at some Midwestern supermarkets and restaurants. Food scientists process plant proteins to imitate real meat in ways that the smashed-bean veggie burgers of the '90s never did.

Not on the market yet, but possibly launching later this year, is a product sometimes called lab-grown meat or "clean meat." It starts with real livestock cells and grows in a factory in a tank some call a fermenter or a bioreactor, where cells are fed nutrients and proliferate. The product looks sort of like ground meat — the technology isn't there yet to get cells to build a muscle structure that resembles a steak or chicken breast.

Leaders in Nebraska's beef industry are aware of the challengers but say their product is better.

"We'll see what the marketplace says, but we feel good about the growth of beef and the consumer's confidence in our product," said Pete McClymont, Nebraska Cattlemen executive vice president.

The new products are launching at a time of rising meat consumption, including beef. Americans are expected to consume a record amount of meat this year — 222 pounds of red meat and poultry per person, the U.S. Department of Agriculture forecasts. McClymont said cattle producers are wondering why companies such as Tyson and Cargill are investing in what producers see as meat competitors.

The Nebraska Beef Council, which uses money raised from cattle sales to promote beef, won't be advocating for "lab-grown beef."

"Our focus truly is letting the consumer know what a nutrient-dense food beef really is," said Ann Marie Bosshamer, executive director of the Nebraska Beef Council.
As confident as beef producers are in their own product, advocates for these new alternatives contend the products will upend the U.S. livestock industry. They hope so, at least, arguing that livestock production is hard on the environment and unsustainable as the world's population grows.

Demand for protein

"This is a new type of meat that can really change the world," said Nick Halla, chief strategy officer for Impossible Foods.

The company makes the Impossible Burger, a patty sold in restaurants that looks and cooks much like a beef hamburger. Impossible credits its "heme" soy protein ingredient for its meaty taste and red color.

The company opened a new manufacturing plant in Oakland, California, last fall, making more than 1 million pounds of its burger mixture a month. (U.S. packers produce more than 2 billion pounds of beef a month.)

Its main competitor is Beyond Meat's Beyond Burger, sold in supermarkets in raw patties destined for the backyard grill.

Beyond Meat investor Tyson Foods — a major employer in Nebraska, with plants in Omaha, Lexington, Dakota City and Madison — said plant protein burgers fit in with the company's portfolio of protein-centric products and will help Tyson meet growing global demand for protein.

"This investment is about 'and,' not 'or,'" spokeswoman Caroline Ahn said when asked whether Tyson foresees any drop in livestock-based protein sales.

On the lab-grown meat side, companies including Hampton Creek and Memphis Meats are racing to commercialize their versions, said Paul Shapiro, a former vice president at the Humane Society of the United States and the author of a new book, "Clean Meat," that chronicles these businesses and their investors.

Hampton Creek says its product will be sold in restaurants later this year. Memphis Meats says it will be a few years. Cost is a barrier.

"These are not alternatives to meat, they are actual animal meats, simply grown with fewer resources than we use to produce animal meats today," Shapiro said.
Its backers liken it to "clean energy."

Opponents  say the beef industry damages the environment with greenhouse gases produced by the livestock and in transportation, and hurts water quality with runoff from farms growing grain for livestock feed.

They say the beef industry damages the environment with greenhouse gases produced by the livestock and in transportation, and hurts water quality with runoff from farms growing grain for livestock feed.

For its part, the beef industry touts its gains in efficiency as cutting beef's environmental footprint. Processors are under public pressure to conserve resources.

Steers and heifers headed to the slaughterhouse are a lot meatier than they used to be. In 2016 the U.S. produced 26 billion pounds of beef, nearly the same amount it did 40 years ago. It did so while raising and slaughtering 28 percent fewer cattle.

"What sustainability is is what producers are doing right now," said Sarah Place, an animal biologist who leads research in sustainable beef production for the National Cattlemen's Beef Association.

Lab-grown meat

Shapiro, the former Humane Society executive, says traditional producers should be worried about the factory-grown product, even though it's yet to hit the market. He contends it will be so disruptive it will send the livestock industry the way of the horse-drawn carriage, whale oil lamps and ice blocks cut from lakes.

"There's a reason Cargill is investing in this — it recognizes that the future of protein production doesn't have to come out of live animals," Shapiro said. The Minnesota-based agribusiness, with meat processing plants in Nebraska, is an investor in Memphis Meats.

Of course, it remains to be seen whether consumers will want to eat meat from a tank. And Cargill says it is still investing plenty in its livestock-based protein business, noting $850 million spent in the past two years on acquisitions, plant expansions and renovations and new facilities.

"We believe consumers will continue to crave meat, and our goal is to bring it to the table in a safe, responsible and sustainable way," said Sonya Roberts, president of growth ventures for Cargill Protein. "Cultured protein products will provide greater choice and help meet the needs of those consumers who seek options."

"We believe consumers will continue to crave meat, and our goal is to bring it to the table in a safe, responsible and sustainable way," said Sonya Roberts, president of growth ventures for Cargill Protein.

Global demand

Hampton Creek CEO Josh Tetrick said he's not sure what path lab-grown meat will take, or if it will displace current sales of meat from livestock.

It could turn people who shun meat into meat eaters. It could also help satisfy the growing global demand for meat.

He said he's in conversations with large meatpackers worldwide about working together: The meatpacker could license his technology, make the meat in its facility, and sell it using existing manufacturing and distribution channels.

He's been surprised at the interest from meat processors.

"They approach the world through this question of 'How do we sell more animal protein more efficiently, in a safer way, in a more sustainable way?' " he said. "They know it's a challenge. They're aware of the resource constraints around land and water."

The plant-based protein makers also envision their products being sold far and wide, not appealing just to people who don't eat meat today.

"We're not going to have the big impact until we really hit the masses," Impossible's Halla said. That means plant-based meat in McDonald's, Taco Bell and Subway, he said.
Consumers are increasingly interested in protein in all forms, and it's showing up on labels in foods around the grocery store, even the cereal aisle.

Meat no longer has the only claim on protein in a shopper's mind, said Danette Amstein, principal at Midan Marketing, a Chicago company whose clients include meat companies. "We have to share it with a long list of items, including fake meat," which is what she calls plant-based patties.

Eye on trends

Her advice to the meat industry is to keep an eye on the trend. The new competitors have the potential to erode market share.

"Don't ignore it, but consider how they can find more ways to talk about the nutritional value of meat," or launch new protein-centric products, she advised.

Plant-based meat substitutes are one of the top challenges for agriculture in 2018, said Chuck Jolley, who is president of the Meat Industry Hall of Fame, and president of Jolley & Associates, another food industry marketing company.

"If Tyson decides that they want to make a big deal out of it, they have an awful lot of clout at the supermarket," he said.

How fast could plant-based and lab-grown meats build market share?

It depends on how consumers perceive the new alternatives, including how they feel about the manufacturing process and whether they see a health benefit, analysts said.
It also depends on taste and cost. Some will switch because of the perceived environmental benefits, but most people won't switch from traditional meat if the alternative is expensive or doesn't taste good.

Advocates for lab-grown meat point to the milk aisle to illustrate how quickly new products can put a squeeze on conventional ones.

Cow's milk has been losing shelf space and sales to competitors like soy milk, almond milk and newer pea-protein milks.

Milk losing shelf space

Cow's milk has been losing shelf space and sales to competitors like soy milk, almond milk and newer pea-protein milks.

Sales of dairy milk will continue to fall, market research company Mintel said. Mintel forecasts dairy milk sales to fall 11 percent between 2015 and 2020, to $15.9 billion.

Meanwhile, U.S. sales of non-dairy milk will grow by about 50 percent, to $3 billion.
Dairy farmers try to defend their territory in the milk aisle. They, with members of Congress, have launched a campaign against the use of the word "milk" on non-dairy beverages. The meat industry could put up that kind of fight over "clean meat" and "plant-based meat."

Ironically, total U.S. milk production has been growing. Americans are passing on milk but eating more yogurt, butter and cheese. Similarly, if consumers replace burgers with plant matter, they still may order up real-beef steaks.

If the new products do take a bite out of meat sales, Nebraska could be vulnerable, its economy relying on a livestock industry that employs tens of thousands of people in a labor force of 1 million.

Don't sell the herd just yet

A pair of recent reports, from ag lenders CoBank and Rabobank, concludes that the new meat alternatives aren't going to make a significant dent in demand for meat, at least not anytime soon.

Yes, meat alternatives are growing quickly, CoBank economist Trevor Amen wrote in a November report, and are something to watch. But they'll remain "dwarfed" by sales of traditional meat. The alternatives may benefit from total global protein demand growth, but won't bite into the existing market for livestock and poultry protein, he said.

While meat alternatives are growing quickly, CoBank economist Trevor Amen says alternatives are"something to watch" but  they'll remain "dwarfed" by sales of traditional meat.

Rabobank said "alternative protein products are not about to get close to the demand for traditional meat products," although it said growth of these products will be faster in Europe and in some coastal, urban areas of the U.S., and will represent a material share of growth there.

Meat processors can respond by promoting the health benefits of eating animal protein, and improving animal welfare and the sustainability of their supply chains and operations, some analysts say.

If the new products cut into beef sales, they could also open up new opportunities for Nebraska agriculture. Some plant-based proteins come from crops like peas, some of which are grown here. Tetrick at Hampton Creek said it makes sense to put manufacturing facilities in the Midwest, taking advantage of livestock processors' supply chains and technical capabilities. Beyond Meat already has a plant in Columbia, Missouri.

Whatever "meat" consumers eat, it seems the Midwest will have a role.