Meat giant Tyson Foods has sold its stake in California-based alternative protein company Beyond Meat, just ahead of the startup’s public stock offering. That’s according to filings with the U.S. Securities and Exchange Commission.
Neither partner announced Tyson Foods’ exit, which was first reported by Axios.
Beyond Meat is hoping to raise about $184 million in an initial public offering (IPO) next week, which would give the company a value of $1.2 billion, according to market analysts.
Tyson Ventures, the investment arm of Tyson Foods, invested $23 million in Beyond Meat in 2016 and 2017, garnering it a 6.5% stake in the plant-based protein company. The split was not totally unexpected as Tyson Foods CEO Noel White told the media in February the company was in the process of developing its own meat protein alternatives. These products would likely be in direct competition with the Beyond Meat products sold at retail.
White said Tyson Foods was using all its resources and would continue to do so in order to provide “great tasting protein alternatives … accessible for everyone.”
Tyson Foods told Talk Business & Politics that while the company was pleased with its investment in Beyond Meat the time was right to exit.
“Beyond Meat provided an early opportunity for Tyson Ventures to invest in plant-based protein products that many consumers are seeking. We wish the leadership of Beyond Meat all the best,” said company spokesman Worth Sparkman. “Tyson Foods continues to be committed to providing alternative protein as a choice for consumers and recently announced the creation of a new business focused on combining our creativity, scale and resources to make great tasting protein alternatives more accessible for everyone. We plan to launch an alternative protein product soon with market testing anticipated this summer.”
Insiders said the split was amicable but tensions had increased in recent months since Tyson Foods announced its own plans for plant-based proteins at scale. Axios reported no one has yet stepped up to acquire the abandoned stake in Beyond Meat.
Tyson Ventures also owns a stake in Memphis Meat and will continue to look for opportunities to expand the scope for Tyson Foods with regard to alternative protein markets. White told Talk Business & Politics earlier this year as more consumers are adopting a flexitarian diet, Tyson must expand its product offerings to fit the new lifestyle.
A Nielsen survey in 2017 found 39% of Americans to be actively trying to eat more plant-based foods. Sales of vegan staples like tofu, brown rice and granola have flattened, while sales of other plant-based alternatives, including meat and cheese alternatives, have surged, Nielsen reported.
Tyson Foods shares (TSN: NYSE) were trading down on Wednesday (April 24) at $73.28, down $1.17. For the past 52 weeks, the company’s shares have traded between a high of $74.88 and a low of $49.77.