Beyond Meat's CEO says fake meat is good for farmers. The reality is complicated
By Danielle Wiener-Bronner, CNN Business
October 4, 2019
Los Angeles (CNN Business)Beyond Meat can do more than save the planet and improve people's health. It can help American farmers, too. At least, that's what CEO Ethan Brown says.
"This is an opportunity to bring disruptive technology back to the American farmer," Brown told CNN Business's Chief Business Correspondent Christine Romans during a private event in Los Angeles. "They can start making more rather than less money."
Brown bristles at the notion that his company, which makes plant-based meat substitutes, is hurting farmers.
"People always talk about, 'Oh, are you disrupting American agriculture? Are you putting the farmer out of business?'" he said. "That's completely wrong."
Brown, whose father ran a dairy farm after working in academia, believes the plant-based trend is an entry point for people who have traditionally been excluded from the tech revolution. He may be right, but it's complicated.
"The digital economy did a lot of stuff for Silicon Valley, for the tech corridor in Boston, for the tech corridor in Virginia," Brown said. "It left rural America out and I know that because I've lived in those communities, in Appalachia."
Brown sees it this way: Beyond Meat's ingredients, like pea-protein and other plant-based elements, require significantly less land than cattle. So if they switch from cattle to plants, farmers will have more land to use at their discretion.
"Let's say I'm a farmer that I have a hundred acres," Brown said. "I can now grow in seven acres the same amount of burgers that I used to grow in all hundred. Now I have 93 additional acres to make money with for my family and I can plant that in protein crops. I can plant it in crops for export, whatever I want. There's an opportunity to help the American farmer participate in a technology disruption that is really significant."
Undoubtedly, there's money to be made in the plant-based sector.
US retail sales of plant-based foods have grown 11% in the past year, according to a July report from trade group Plant Based Foods Association and the Good Food Institute. Barclays predicts the alternative meat sector could reach about $140 billion in sales over the next decade, capturing about 10% of the global meat industry. Jefferies predicts that by 2040, the alternative meat market could make $240 billion in annual revenue globally.
The expanding market has piqued investor interest. Beyond Meat's (BYND) stock price has more than doubled in value since it went public in May, and the company held a secondary offering this summer. Beyond Meat's main competitor, Impossible Foods, is private, but raised another $300 million from investors in May.
Demand for plant-based foods has driven up demand for pea protein, which is good for farmers. Cargill, which sells food ingredients, made a $75 million investment in North American pea protein producer Puris this summer. The funding "provides significant support to the local economy with approximately 90 new jobs and a new revenue stream for Midwest farmers," said Laurie Koenig, a member of Cargill's leadership team, in a statement at the time.
"I know pea producers and lentil producers who are really excited" about demand from the plant-based protein trend, said Ben Eborn, an economist and professor at the University of Idaho Extension. "We don't grow a ton of peas and lentils in this country — it could be a huge spike in their demand. They could be really profitable, especially in the short run."
Brown said, "The reason that we use pea protein today is that it's been scaled already," but he plans to source from a variety of plants in the future...