Investors Push Companies on Plant-Based Protein

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By Andrea Vittorio

Oct. 3 — Getting a meat eater to go vegetarian is hard enough. But how do you get a company known for its poultry to consider plant-based protein?By appealing to its business sense, as a shareholder proposal at Tyson Foods Inc. is trying to do.

“We wanted to go all-in and see how it goes,” Marissa LaFave, a shareholder advocate at Green Century Capital Management, said in an interview.

Green Century, which has pressured Tyson in the past on its use of gestation crates for pigs, is asking the company to look at business risks and opportunities from consumers eating less meat and more plant proteins. A Tyson spokesman said the company will respond when it sends its proxy statement out to shareholders later this year.

Plant-based protein remains a niche market today. But Lux Research predicts soy, peas, rice and other alternative sources could constitute a third of the total protein market by mid-century.

Carbon Bubble, Meet Protein Bubble.

Forty institutional investors with a collective $1.25 trillion in assets under management are asking more than a dozen multinational food makers and retailers, including General Mills Inc., Nestlé and Wal-Mart Stores Inc., what they are doing to get ahead of the game. It is part of a campaign organized by the Farm Animal Investment Risk & Return (FAIRR) initiative and the nonprofit ShareAction.

“There are several different risk factors that surround [industrial-scale] farming that investors haven’t yet valued,” Maria Lettini, who directs the FAIRR initiative, said in an interview.

Aviva Investors, Robeco and others involved in the campaign are framing it as a supply chain issue: Population growth and rising incomes have driven a sharp increase in meat production, which brings with it a number of environmental and public health concerns. The current supply chain may not be able to cope with future demand.

Jeremy Coller, founder of FAIRR and of U.K.-based private equity firm Coller Capital, has called it a “protein bubble,” in a nod to the potential “carbon bubble” facing the world’s fossil fuel assets due to climate controls.

By 2050, food-related greenhouse gas emissions could grow by more than half unless diets change, according to a recent Oxford University study. It found that eating less meat and more fruit and vegetables could cut food-related emissions by up to 70 percent.

Secret Sauce: Customer Satisfaction

Nestlé says it generally does not use much meat, so the impact of replacing it would be minimal. “Our main opportunities lie in innovating new products using alternate proteins” through brands like Garden Gourmet and Herta in Europe, a company spokesperson said.

Plant-based foods are starting to be seen as more than just a substitute. About a third of Americans buy meat alternatives even though only 7 percent consider themselves vegetarian, according to market researcher Mintel. Non-dairy milk is also becoming a market in its own right as sales sour for the kind from cows.

“We recognize that some consumers are choosing to shift entirely to plant-based diets, and others are just looking to increase the portion of their diet that is plant-based,” General Mills said in a statement. The company’s new venture capital arm has invested in plant-based startups Beyond Meat, which makes chicken and beef alternatives, and Kite Hill, which makes cheese and yogurt from nuts.

Seth Goldman, Beyond Meat’s executive chairman and a vegetarian for 10 years, said the key to success is customer satisfaction: the food has to taste good. McDonald’s former chief executive officer Don Thompson joined Beyond Meat’s board after he tasted one of its burgers. A taste test also hooked Bill Gates as an investor.

“You can tell people whatever environmental or health or animal welfare concerns you may have,” Goldman said in an interview, but “you can’t tell people to buy something or to sell something that isn’t going to work in the marketplace.”

To contact the reporter on this story: Andrea Vittorio in Washington at

To contact the editor responsible for this story: Larry Pearl at

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