Miller Magazine Issue: 118 October 2019

46 NEWS MILLER / OCTOBER 2019 Agribusiness giants want a cut of growing fake-meat market Bunge Ltd, one the world’s biggest grain traders, recently disclosed the 1.6% stake it had purchased in the fast-grow- ing fake-meat startup Beyond Meat. The play looked smart after the stock surged more than 250% since the faux burger and sausage mak- er’s initial public offering in May. Indeed, Beyond Meat’s (BYND.O) market capitalization of $9.9 billion is now larger than Bunge’s (BG.N), a 201-year-old firm with 31,000 employ- ees. No wonder many top agricultural firms want to grab their cut of the booming market for plant-based fake meat. Bunge’s investment is just one example of how grain traders and seed companies are trying to capitalize on a mar- ket that now accounts for 5% of U.S. meat purchases - a share expected to triple over a decade, according to invest- ment management firm Bernstein. That growth would mirror the fast ramp-up of milk substitutes made from crops such as almonds. “I definitely think this is going to continue to drive de- mand,” said Vince Macciocchi, president of the nutrition group at Archer Daniels Midland (ADM.N), one of Bunge’s chief rivals. ADM and privately-held grain trader Cargill are selling processed peas and soy proteins to consumer food companies and restaurants that use them to make vegeta- ble burgers, sausages, fish substitutes and other faux-meat products. They are also getting into the business through acquisitions and corporate partnerships or by leveraging their labs and research ca- pabilities to help make new plant-based products for clients including food and beverage makers. Seed company Corteva - which spun off in June after a merger of Dow Chemical and Dupont (DD.N) - is studying potential vegetable seed offer- ings. Grain traders and seed-makers are following the lead of Beyond Meat and another startup, Impossible Foods, along with traditional meat pro- ducers such as Tyson Foods (TSN.N) and Maple Leaf Foods (MFI.TO ) that have cashed in on plant-based meat substitutes. Demand for meat alternatives has soared as consumers add plant-based protein to their diets for health reasons and out of concern for animal welfare and environmen- tal damage from livestock farming. Tofu, made from soybean milk, is the best known meat alternative and has been around for decades. But in recent years, other crops such as black beans, peas, lentils, cano- la, beets and sunflower have become popular in products made to taste like or replace meat. The big agricultural firms are in part playing defense. Grain traders supply the world’s livestock farms with an- imal feed - a business that would suffer if fake meat sales rise at the expense of real meat. Seed companies such as Bayer AG sell to farmers who grow the corn and soybeans that are now sold mostly to feed livestock. SURGING DEMAND ADM this year created a new position - director of “flexi- tarian” solutions - to focus on developing products for food companies who are targeting the market for a mostly plant-based diet, Maccioc- chi said. The company is also consider- ing repurposing an animal-feed plant in Rotterdam to produce human-grade soy products, he said. ADM has expanded its plant-protein team of scientists and mar- keters in the past three years even as it Many top agricultural firms want to grab their cut of the booming market for plant-based fake meat. Bunge’s investment in the fast-growing fake-meat startup Beyond Meat is just one example of how grain traders and seed companies are trying to capitalize on a market that now accounts for 5% of U.S. meat purchases - a share expected to triple over a decade.