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Meat the Competition

· May 10, 2019

Lately, substitutes to the commonly produced and available meat and seafood in stores and restaurants have garnered lots of attention and support. Burger King recently announced its partnership with California-based Impossible Foods Inc. and plans to offer the Impossible Burger nationwide by the end of the year and as of this writing, Beyond Meat Inc. (BYND) had the strongest IPO of 2019. This swell in plant-based meat alternatives has also coincided with recent developments in lab-grown, or cell-cultured, meat and seafood as well. These sectors of the food industry are at the start of a new wave of innovation and competition.

The reaction to this rise in meat alternatives is quite pronounced. Beyond Meat and Impossible Foods are not the only two firms in the market; others are taking notice of the opportunity. Shortly before Beyond Meat’s IPO, Tyson Foods sold its stake in Beyond Meat and announced it would pursue alternative meat products of its own. Joining Beyond Meat’s availability in stores is Lightlife, another company creating plant-based meat alternatives. Lightlife recently announced its newest products Lightlife Burger and Lightlife Ground will be available in grocery stores across the US starting this summer. (Even companies whose main focus isn’t food, yet offer it nonetheless, are pursuing these alternatives. IKEA, known for its Swedish meatballs, is creating a new meatless version of the dish.) And early March 2019, the FDA and USDA released their first official joint policy document on the regulation of “cell-cultured meat.”

Demand for these types of products has also spiked in recent times, so much so that Impossible Foods even struggled to meet that demand. And this demand is only growing stronger; due to its deal with Burger King, Impossible Foods is practically doubling the amount of restaurants it works with. This is all on top of the new offerings from companies like Beyond Meat and Lightlife in stores across the US, and the push from established companies like Tyson Foods to develop their own alternative meat products. In addition to the growing availability of these products in US stores and restaurants, there’s international interest and activity as well.

This shift towards alternative sources of meat and seafood could have strong effects on the meat and seafood industries, and competition in this sector could take an interesting turn. The expansion of plant-based and cell-cultured meats and seafoods could shift the jobs of the meat and fishing industry in new directions, transitioning away from mass farming and fishing towards development in the lab.

New competition in the food sector also inspires the inevitable regulation-oriented responses by competitors. Just as dairy producers are fighting the application of the term “milk” to dairy alternatives, a legal battle is brewing in the agriculture industry over legislation to classify “cauliflower rice” as “rice” at all. The same battle is emerging for the barnyard lobby (meat, livestock, and poultry) with these new offerings as well. [1] [2] As plant-based and cell-cultured products are poised to take a bite out of incumbents’ market share, these disruption-driven legal tussles may ultimately resemble legal responses in markets that have or are experiencing similar disruption. DisCo has previously covered this phenomenon and actions geared towards regulatory capture in multiple markets. [1] [2]

Nevertheless, the combination of multiple consumer-accepted sources of meat and seafood, once the cost of the means of production of these emerging products decreases, will likely benefit consumers in multiple ways: it could increase competition by pushing the established meat and seafood industries to innovate; it could reach a much wider base of consumers (offerings such as the Impossible Burger being not only plant-based but also certified kosher and halal); it could encourage healthier eating and raise standards for traditional meat and seafood; and it could lower prices for consumers for traditional meat and seafood and these emerging products.

Innovation

New technologies are constantly emerging that promise to change our lives for the better. These disruptive technologies give us an increase in choice, make technologies more accessible, make things more affordable, and give consumers a voice. And the pace of innovation has only quickened in recent years, as the Internet has enabled a wave of new, inter-connected devices that have benefited consumers around the world, seemingly in all aspects of their lives. Preserving an innovation-friendly market is, therefore, tantamount not only to businesses but society at large.