By Jim Whitt, Contributing Editor
A friend texted me with this question: “What is your take on all the plant-based burgers? Is the beef industry headed to being a niche market?” I replied: “If so, it will be good for farmers!” His response: “LOL [laugh out loud].”
As a more serious response, I referred him to Will Verboven’s column in the CALF News April/May 2019 issue, “New Meats Are Closer Than You Think.” It’s an excellent read and Will poses a sobering question, “So, what is the meat industry to do to at least survive in some form?”
Who would have dreamed of a meat industry without meat? Certainly not Elmer Wheeler. It was Mr. Wheeler, founder of The Tested Selling Institute, who famously coined this phrase in the 1930, “Don’t sell the steak – sell the sizzle!” Mr. Wheeler went on to observe, “The sizzle has sold more steaks than the cow ever has, although the cow is, of course, mighty important.”
The cow’s importance will be greatly diminished if these fake-meat products meet the consumer taste test. And this is straight from the Beyond Meat mission statement: “By shifting from animal, to plant-based meat, we are creating one savory solution that solves four growing issues attributed to livestock production: human health, climate change, constraints on natural resources and animal welfare.”
Since the public has been conditioned to believe that message, it has plenty of sizzle.
The sizzle is already selling. On May 2, Beyond Meat became the first plant-based food company to go public on a major exchange. It zoomed past its projected price per share by 163 percent on its first day of trading, giving the company a market value of about $3.8 billion. This was the best opening day for an IPO in 2019. The marketplace just made a statement by betting big on Beyond Meat.
Industry giants Cargill and Tyson have invested in plant-based and cultured-meat products. They don’t want to be on the outside looking in if fake meat turns out to be the real deal. From a purely economic perspective, imagine producing exactly what you want when you want it and eliminating the supply chain inefficiencies of taking an animal from conception to the dinner plate.
Technically, beef is already a niche market. Meat makes up about 9 percent of the average daily calories consumed by the world’s population. Beef accounts for only 1 percent of the world’s average daily calories. The beef industry is already a niche market in the meat industry, which is a niche market in the food industry. Fake meat could make these niches even smaller.
As Will stated in his column, “In researching this topic, one becomes rather depressed about the future of the meat industry.”
Before we get too depressed there are some silver linings in the fake meat cloud. Another industry was faced with a major market disruption a few years ago. Remember when Tesla was going to take over the auto world with its electric car? Like Beyond Meat, Tesla went public in 2010 amid much fanfare. Its stock increased more than 40 percent on its opening day. It’s still struggling to meet sales and production goals and has never had a profitable year. What do consumers prefer to drive? The most popular vehicles on the road are light duty trucks and SUVs with real internal combustion engines.
Consider the fact that fake meat is being developed because people like to eat real meat! Part of the sizzle Beyond Beef is selling is that their fake burger tastes like a real burger. It’s an admission that a real burger is the standard a fake burger has to match. And by the way, a real burger is a much easier sell to those on low-carb diets. The Beyond Meat burger has 5 grams of carbohydrates. A real burger has zero.
The beef industry has a research, development and promotion machine with a proven track record. The Beef Checkoff program has been the industry’s success story for the last 30 years. It will be more important than ever for the beef industry to survive.
Finally, adversity can be painful, but it is the most powerful catalyst for change and growth. This challenge should be a call to arms! It’s time for every breed and segment of the industry to crawl out of their silos and partner to satisfy the end-product consumer.
It’s time for the real meat industry to plan beyond meat.
E-mail comments to jim@purposeunlimited.com
