According to two recent reports, big meat and food companies are threatening to squeeze out smaller meat alternative manufacturers in the same way they have impacted other food industries.
Meat companies like JBS and Cargill have invested heavily in plant-based proteins and lab-grown meats in recent years, and bought out several smaller companies, according to a report released Tuesday by nonprofit Food & Water Watch and a March report by IPES- Food, a coalition of food systems experts.
The animal meat conglomerates join other food giants that already control about 80% of the meat alternative market, including Kellogg’s, which owns the MorningStar Farms brand, and Conagra, which owns Gardein.
“Most of these products don’t have the parent company’s name on the label,” said Philip Howard, associate professor at Michigan State University and lead author of the IPES Food report. People who buy alternative meat products “may not realize that they are supporting these big companies,” he added.
According to IPES-Food, the meat substitutes market is expected to grow rapidly, from $4.2 billion in sales in 2020 to $28 billion in 2025. Much of that growth will come from the already robust plant-based meat industry, it said in the report, but several conglomerates have also invested hundreds of millions in the development of lab-grown meat — meat made in bioreactors without the need to slaughter animals.
Both plant-based and lab-grown meat producers say their products are better for the environment than meat. According to a report by Johns Hopkins University, plant-based alternatives have a 93% smaller mean carbon footprint than beef. And German scientists have said that replacing as much as 20% of the world’s beef consumption with microbial proteins like Quorn could halve deforestation.
Even as the meat industry downplays the value of fake meat and pressure mounts from climate scientists and other experts to drastically reduce meat consumption, some big meat companies may be looking for other revenue streams.
Cargill has been active in this sector, investing in lab-grown meat company Aleph Farms and making its own plant proteins. Tyson Foods sells plant-based meat under its Raised & Rooted brand and has invested in several plant-based and lab-grown meat companies.
JBS, the world’s largest meat company, last year bought lab-grown meat company BioTech Foods and also Dutch plant-based meat company Vivera, which carries the company slogan, “Life’s better when you eat less meat.”
“They cover their bases because this is an area that’s growing very quickly,” Howard said. “These companies have grown big and powerful by using every strategy imaginable.”
US regulators are doing little to halt consolidation in the alternative meat sector, said Amanda Starbuck, research director at Food & Water Watch, adding it could end up looking similar to the beef industry, which includes four companies — JBS, Cargill , Tyson – operating groceries and National Beef Packing – control 85% of the industry.
“Plant-based meat brands are little alternative to the current system if they continue to consolidate corporate power,” concludes the Food & Water Watch report. “It shows the futility of voting with your dollar,” Starbuck said.
This concern is reflected in the IPES-Food report, which says corporate governance threatens to erode gains from reducing animal dependency by replicating some of the problems of the traditional meat industry, including mass-produced, monocultured ingredients and energy-consuming methods . The proliferation of meat alternatives could “reinforce the power relations that keep current systems running and fail to answer the question of how systemic change will be achieved,” the report says.
As large corporations are likely to tighten control of the meat alternatives industry, Howard worries the landscape will resemble the US craft beer industry. While there are nearly 9,000 breweries in the US, the vast majority are tiny and can’t distribute beer beyond their neighborhood bars, and liquor conglomerates have bought up most of the larger craft brewers.
Smaller producers may find it difficult to get the grains and other crops needed for meat alternatives, said Celia Homyak, co-director of UC Berkeley’s Alternative Meats Lab. Big companies “are going to capture all of these ingredients and take them away from the smaller companies that are doing the innovation,” Homyak said. “You have the power of money and size.”
But she also sees advantages in the increased interest of large meat companies. Business investment and a smaller industry aren’t necessarily bad, Homyak said. “We need more people to enter this space and of course it’s going to shrink because you can’t have a million players,” she said. “I’m actually not too worried about the big conglomerates that are coming in because it shows that these larger companies think this industry is valid.”
At least 1,300 startups were making meat alternatives six months ago, said Zak Weston, senior supply chain manager at the Good Food Institute, a nonprofit that advocates for fewer animal proteins. “There’s a lot happening in the ecosystem right now, and big companies are playing a role. And we think that’s positive,” Weston said.
But some worry investments from big meat companies will stifle innovation in an industry that depends on it.
The industry is better off with smaller, unaffiliated companies, said Dan Staackmann, who founded Upton’s Naturals 16 years ago. The Chicago-based company, which Staackmann said has never taken outside money, sells vegan proteins in stores and restaurants across the country.
“You take the money and suddenly someone is looking over your shoulder,” he said. “I can do more with $100,000 than some of these companies can do with $100 million, and I think that’s true of a lot of entrepreneurs. In a changing market like this, you just can’t steer a big ship fast enough.”
But independence may be fleeting for many producers, said Howard, a Michigan State professor. Conglomerates have partnerships with major grocery chains and retailers, so anyone looking to expand their meat alternatives beyond their neighborhood will feel selling pressure.
“It’s going to be very difficult for these small and medium-sized businesses to stay in business,” Howard said. “We have economic systems that empower the rich and powerful. Just getting into supermarket shelves is very difficult for smaller producers.”