Tyson Foods’ venture capital group takes stake in Memphis Meats
Springdale-based Tyson Foods said its venture capital segment has made an undisclosed investment in Memphis Meats, a startup that focuses on producing meat protein from animal cells in a laboratory, eliminating the roles of cattle and chicken farmers.
Terms of the investment were not disclosed, but Tyson Foods joins Microsoft founder Bill Gates and competitor Cargill who have also invested in Memphis Meats.
“We’re excited about this opportunity to broaden our exposure to innovative, new ways of producing meat, especially since global protein demand has been increasing at a steady rate,” said Justin Whitmore, chief sustainability officer at Tyson Foods. “We continue to invest significantly in our traditional meat business, but also believe in exploring additional opportunities for growth that give consumers more choices.”
Memphis Meats is the second alternative protein venture funded by Tyson Foods. Last year the company invested in California-based Beyond Meat, a venture geared toward non-animal protein that is consumed by a growing number of vegetarians.
Michael Milken, founder of the Milken Institute, said last week during a speech in Northwest Arkansas that over the next decade 20% of Americans will be vegetarians. Milken said technology is colliding with agriculture like never before and plants are being grown in hydroponic high-rise warehouses in China in a more sustainable manner with 24 harvests per year. He also said meat is being produced in labs by using animal DNA like at Memphis Meats. A recent report by agri-lender CoBank indicated protein products made from plants, insects and cultured meat as a top food trend to watch this year and beyond.
“We are excited that Tyson Foods will be joining us in our mission to bring meat to the table in a sustainable, affordable and delicious way,” said Dr. Uma Valeti, co-founder and CEO of Memphis Meats. “Our vision is for the world to eat what it loves, in a way that addresses today’s challenges for the environment, animal welfare and public health. We are accelerating our work and building out a world-class team to make this a reality.”
Memphis Meats expects to use the funds to accelerate product development. The company is recruiting to expand its team of chefs, scientists, creative people and business people.
Tyson Foods CEO Tom Hayes said the investments in alternative protein sources might seem counterintuitive for a meat giant like Tyson Foods. But he said the company is more than just a chicken, beef and pork packer and it continues to transform into a food company with ready-to-eat snacks, meals and even meat alternatives.
“There will be a billion more people in the world by 2030, and each person is expected to eat more calories. Those factors combined mean the world will need to supply at least 20% more calories in 2030 than it does today,” Hayes said recently.
He said feeding the growing number of people and adding protein consumption in a sustainable way is a challenge facing the agriculture sector. Hayes said Tyson Foods believes it will take a combination of innovative and traditional approaches to solve the issue and that’s the basis for the company’s investments in Beyond Meat and Memphis Meats.
“We’re also stepping up our game on animal proteins by reinvesting millions of dollars in our core businesses and making bold moves that matter to consumers, like raising chicken without antibiotics. Consumers are eating more animal protein than ever before, and we’re committed to getting that protein to them,” Hayes said.
He said no one knows exactly what will be practical and accepted by consumers, and that’s why the company is exploring new approaches.
“Some will resonate with consumers more than others, but we believe every attempt will move us forward – as a business and as a planet hungry for protein,” Hayes added.
Cultured meat ventures will still need to win regulatory approval before they can enter the market. The labeling for “cultured meat” has not yet been determined by the U.S. Department of Agriculture and Food and Drug Administration, according to the CoBank report. The timeline for commercial viability is an unknown with the best estimates being three to five years for restaurants and specialty stores. Supermarket acceptance is expected to take an additional two to three years. The report does note that production costs have dramatically declined, though they remain a long way from consumer affordability. The product cost of one lab-grown hamburger patty was $325,000 in 2013. In late 2017, Memphis Meats said a pound of hamburger meat made in the lab cost $2,400, down from $18,000 in 2016. The industry expects to get the cost down to $10 for a single hamburger patty in the near term, which is still around four times as expensive as traditional beef.