The Cattle/Beef Industry: ‘Whistling Past the Graveyard’
Fake Meat poses a real and serious threat to the cattle/beef industry
The Cattle Range
In a recent press release, the National Cattlemen’s Beef Association stated “While meat substitutes have certainly attracted a lot of media hype over the past couple of years, data shows that real beef maintains 99.5% of the retail market vs. only 0.5% for meat substitutes.” To be fair to the NCBA, read the entire release and you will see they are concerned and 'click here' to see they are responding. The quote from the press release was used to exemplify an attitude widely held within the cattle/beef industry, an attitude that seems to be ‘Whistling Past the Graveyard’ since fake meat companies are selling all they can produce and have a waiting list for future increased production.
Impossible Foods launched a co-manufacturing collaboration on July 31st with global food provider OSI Group, one of the largest food producers in the world. OSI will begin producing Impossible Foods’ flagship product, the Impossible Burger, starting next month, adding short-term capacity to Impossible Foods’ plant in Oakland, Calif. OSI will continue to expand production of Impossible Foods flagship product throughout 2019 and thereafter.
Whether called alt meat, faux meat, plant-based meat, cell-cultured meat, or any other name for fake meat, they pose a real and serious threat to the cattle/beef industry. For example, Beyond Meat stock has performed beyond any expectations so far on the stock market, surging to nine time its IPO price of $25 per share. Beyond Meat announced on July 29th that sales nearly quadrupled from a year ago and they plan to sell additional shares in the company.
Beyond Meat demonstrates that venture capital is readily available to the fake meat industry and is not just a U.S. phenomenon. A British company has signed a distribution deal with Amazon’s Whole Foods Market to have its fake meat products on the shelves of 450 stores across America this month. The bottom line is there will be more start-ups, more research & development, and more efficient and increased production. This will result in the cattle/beef industry facing a competitor offering larger quantities of improved fake meat products costing them less to produce.
In a piece titled “This Is the Beginning of the End of the Beef Industry” published on OutsideOnline.com, Rowan Jacobsen, an Outside contributing editor, wrote “Most Baby Boomers are going to stick with their beef, right up to the point where their dentures can’t take it anymore. But Gen Z will find the stuff as embarrassing as Def Leppard and dad jeans.” He goes on to state “As this shift accelerates, the beef industry will lose its last advantage -- price.” He closes with “Recent projections suggest that 60 percent of the meat eaten in 2040 will be alt, a figure I think may actually be too conservative. An estimated 95 percent of the people buying alt burgers are meat-eaters. This is not about making vegetarians happy. It’s not even about climate change. This is a battle for America’s flame-broiled soul. Meat is about to break free from its animal past.”
A survey of 1,800 U.S. food consumers conducted earlier this year by economists from Purdue University, Ghent University, and Michigan State University found that holding prices constant, 72 percent of participants chose farm-raised beef. This is not a victory… 28 percent of those surveyed did not choose farm-raised beef.
The pain could begin long before 2040... Assume that in 10 years, fake meat has captured 10 percent of the retail market. Losing just 10 percent of the retail market would be significantly detrimental to the cattle/beef industry. The loss of 60 percent of market share by 2040 would devastate the industry and relegate beef production to a small number of producers filling the demand for a niche market comprised of beef-loving wealthy consumers and average consumers celebrating special occasions.
Long-term projections are largely based on guesswork and surveys have a margin of error. The important point is that loss of market share to fake meat is inevitable but the amount can be mitigated if the industry acts in a timely and aggressive manner.
Belgian microbiologist Frederic Leroy recently spoke at a Red Meat Sector Conference in New Zealand at which he stated that the “Meat Industry needs to Restore Pride” in their products. Professor Leroy added “Meat is fundamentally beneficial. We need to communicate that and get the science in behind it.”
A possible course of action…
Lobby for the USDA and additional states to enact legislation prohibiting fake meat from describing and labeling its products as “Beef” and assist in defending the legislation from the inevitable challenges in the courts. Actively educate consumers about fake meat because a portion of consumers will be concerned about nutritional issues with fake meat. For less health-conscious consumers, knowledge of fake meat’s ingredients and how it is produced will trigger a ‘Yuch’ reaction with many of them. Launch a robust and ongoing advertising campaign on the Internet, social media, television, and print publications to get the message to a wide range of consumers with the message reinforced with a "Real Beef" label on beef products.
The obvious question is how to pay for all of this? Because Fake Meat poses an extraordinary threat to the beef industry, an extraordinary response is required with participation and funding from all segments of the industry, including other industries that depend on cattle for a significant amount of their revenue. Wiser heads than those at The Cattle Range will be needed to formulate, finance, and implement an effective response to Fake Meat, but to ignore the threat would be ‘Whistling Past the Graveyard.’
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