There was a report circulating inside the trade yesterday that “Record Sums of Money Flowed Into Alternative Meats in First Quarter.” As I’ve been saying for the past couple of years, if millennials and other investors are going to keep throwing huge sums of money in that direction, those companies are going to be able to hire brighter and brighter individuals and figure out ways to make meat cheaper and taste better. It’s simply the “law of numbers” at this stage, they are going to get both more efficient and more competitive as they receive more and more money. On the flip side, our traditional livestock operations could become a bit more expensive each year to operate as we face stiffer and stiffer environmental rules, regulations, and procedural processes that add to a bit more overhead. As the fake meat gets cheaper to make and taste a bit better each day we may eventually find ourselves on a collision course. I have included below a few of the recent money-flow highlights. This is certainly something we need to keep on our radar and think more about. You can read in full detail at Financial Times

  • More money flowed into companies making plant-based or cell-cultured meat, eggs and dairy in the first quarter than in the whole of last year, as some of the biggest names in the sector led large investment rounds.
  • Impossible Foods, which makes plant-based burgers and pork, raised $500m, LiveKindly, both a media site and a stable of alternative food brands, raised $200m and Memphis Meats, which grows cultured meat, raised $160m.
  • Beyond Meat, the $7.8 billion fake meat company recently announced quarterly earnings and revenues rose +140% year-over-year. In the first quarter, Beyond Meat’s gross margin was an astonishing 38.8%. To put that in context, that’s double what $20bn Tyson, the world’s second-largest beef, chicken and pork processor, has achieved at peak over the past 30 or so years
  • Donald McLee, analyst at Berenberg, said that while restaurant closures have hit some companies, the overall trend towards “environmental sustainability, health and wellness, and animal welfare” would remain positive for the “plant protein category”.
  • Meat shortages and complications in logistics with traditional protein is presenting an opportunity for Beyond Meat and its competitors such as Impossible Foods to grab more market share.
  • Competition inside the “fake meat” space is also heating up. As more players see the opportunity, big names like Cargill, Tyson, Kellogg, Conagra, Hormel, and Nestlé are now jumping in the game. I have to imagine this ultimately means more money being thrown at the “process” which in the end drives prices down and creates a better product. 

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