The big videos last week were great, the market was solid and program cattle were fetching big premiums. Cattle targeted for the NHTC market brought $15-20 premiums over freshly weaned calves. The market was stronger than most expected for fall-delivered calves and yearlings. The live futures markets are not very encouraging and feed grains are still an unknown factor. But cattle feeders were very aggressive on the yearling cattle, which are coming in much heavier than expected with lots of 900 pounds and bigger cattle sold in the high $140s and low $150s.
I am still amazed how much media attention Beyond Beef and Impossible Foods are getting on their plant-based patties that they disguise as a beef burger. The irony is that vegans are not their target market—you are, everyday meat eaters. These companies are looking at a much larger market than the 5 percent vegetarian and vegan market. It’s estimated that the U.S. meat industry is a $250 billion business. These people are not going to settle for a paltry $7.5 billion market potential.
David Lee, CFO at Impossible Foods, predicts they will have a $5 billion market by 2020. They also expect the business to grow 8.4 percent a year. Their big problem is producing enough product to satisfy their market. These guys have done their market research and appear to be betting the farm and lots of other peoples’ money on plant-based protein. Market observers are estimating the alternative meat market will be a $35 billion business.
The news media is covering this new business like they did the internet industry in the late 1980s. This is bigger news than the current political banter going on about what kind of country we’ll see in 25 years.
Last week we talked about the nutritional value of their version of plant-based protein. Lee says that Beyond Meat has the exact same chemistry as beef. “Heme” is the magic ingredient, which gives their product the beefy taste.
Targeting their product to existing meat eaters is a tall order. I can see folks giving it a try, but they will also look at it as a different food altogether. I think it needs a different name if that’s their goal—something like Earth Pucks or Chemlean—some center-of-the-plate kind of thing. Let your imagination go. There are a lot of veggie-protein patties on the market and they certainly haven’t received as much attention as these new products.
These new meat replacement companies are run by well-educated people who realize they may make a big hole in the food industry. I would have to say that the Beef Checkoff folks should look at hiring these folks—they’re doing a heck of a job. Marketing a highly processed food item into a market that wants more natural food products looks like it would be an uphill battle.
They’re also well connected. People like Bill Gates, Katie Perry, JZ, and other high-profile celebrities have invested their money into the company. Having celebrity endorsements certainly doesn’t hurt. Who is the current celebrity representing the beef industry?
How do these companies get such good press coverage? This is valuable advertising for these guys. It’s what we call “free ink” or free air. I haven’t seen much in the way of traditional advertising for these companies. Their big splash seems to be in the investment world and just how much money they will make investors.
I kind of look at the product as reverse-engineered ground beef, rebuilt with highly processed components and chemicals. This doesn’t sound like foods that are in the fresh produce, meat and dairy case. This is highly processed food that we have been warned for years to stay away from.
But this is the biggest new food item to come along in years. Think about it; what new food item has been introduced in the last 10 years? I can’t think of anything other than a flat iron steak.
But for now, we must be even more efficient producing beef and let the world know that cattle are environmentally friendly. Beef is fundamental and offers consumers more variety. Let’s see how they go beyond a patty, sausage or a chicken-like product. Real meat has been around since time began, and that’s a long time. The meat industry hasn’t ruined the world in all those years. Think about it. — PETE CROW