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What Does Tyson's Blended Burger Mean for the Industry?

I previously made the case for non-vegetarian blended meat products, and there has been some exciting recent news on this front. Perdue launched their Chicken PLUS line of blended chicken nuggets, and Tyson announced a new “plant-based” brand Raised and Rooted. The first two Raised and Rooted products are a vegetarian chicken nugget (containing egg whites), and a non-vegetarian blended angus beef / pea-protein burger [1].

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It’s clear that Raised and Rooted is targeting the flexitarian consumers driving the growth in vegan brands like Beyond Meat and Impossible Foods. They explicitly call out flexitarian consumers on the front page of the Raised and Rooted website. Additionally, their packaging contains natural colors like brown and green, and has a strong emphasis on the health benefits of the products.

I can see a couple of reasons why Tyson might have started with these products over more traditional vegan products:

  1. I previously talked about the disconnect in the fact that most plant-based products are vegetarian, but their consumers aren’t. A non-vegetarian product that still allows flexitarians to reduce their meat consumption potentially serves their needs better. Instead of eating meat 40% of the time, they can eat something that’s 40% meat.

  2. Given that Tyson doesn’t have any ideological commitment to veganism, they could have simply seen animal products as a way to improve the quality of their offerings.

  3. Creating a blended product allows Tyson to participate in the quickly growing alternative protein segment in a way that synergizes with their core business, rather than being at odds with it. They have access to cheap, high quality meat through their existing supply chains that other companies might find difficult to match.

  4. They might have felt that they couldn’t match the quality of Impossible Foods and Beyond Meat if they tried to compete head on with a vegan product. Instead, they differentiated themselves with a blended product. This would make sense given the theory of disruptive innovation (which I wrote about here)–startups can gain a product advantage over incumbents by having a head start.

What does this new development mean for those whose mission is to move completely past factory farming? I think it’s too early to draw strong conclusions since Tyson said that Raised and Rooted will be a “pipeline of innovation,” meaning that there will likely be more products in the future. Plus, we don’t know how good the products are. However, there are some things we can extrapolate from the information we have so far. 

The short term impact that the blended burger has on overall meat demand will be determined by two parameters: how much of the product is meat, and how much the product competes with animal meat versus vegan products. Roughly speaking, if X% of the burger by volume is animal meat, and Y% of the other products that the burger displaces are animal meat, then the burger will reduce short term meat demand if X<Y [2]. Else, it will raise it.

Without the ingredients list or full nutritional information about the blended burger, it’s difficult to speculate about how much of the product is meat. However, given the wide reach Tyson has, they will likely have access to many consumers that are difficult for companies like Impossible Foods to reach. Still, they clearly also see their products as directly competing with the existing vegan products. They explicitly call out their vegan competitors in their press release: “The blended burger...has fewer calories and less saturated fat than the plant-based burgers sold by several competing companies.” Taking all of these factors into account, I’m cautiously optimistic that these products will cause a small-to-medium decrease in short-term meat consumption.

I’m less optimistic about the long-term ramifications of these products than I would be if they were made by a startup. Previously, I claimed that the main long-term benefit of blended products was to lay the groundwork for blended cell-based products. However, this benefit is lessened given the differing incentives of startups versus incumbents.

If a startup were to establish themselves as a leader in blended products, then blended products would make up their entire business. They would feel pressure to keep growing past this niche market (following the path of disruptive innovation), especially if they were venture funded. One way to grow would be to take a large bet on cell-based meat (either themselves, or through partnerships). At first, they could incorporate cell-based meat into their blended products, and use this traction to continue to fund R&D. The price of cell-based meat would go down over time, eventually allowing them to create fully cell-based products that are cheaper, healthier, and tastier than animal-based meat. 

Incumbents, on the other hand, might not feel the same pressure to bet on cell-based hybrids, since they would already be market leaders. Given how much incumbents have to lose, it could be risky to invest in a technology that wouldn’t pay off for many years.

Further, early incumbent entry into the blended product category makes it more difficult for startups to use the market as a springboard for eventual disruption. Disruptive innovation must start out in a niche market so that under-resourced startups can gain traction. However, if incumbents already crowd the space, it will be difficult for startups to get a foothold (insofar as future blended cell-based / plant-based products will mainly compete with blended animal-based / plant-based products). 

“Plant-Based” Term Creep

One interesting development is Tyson’s use of the term “plant-based,” despite the animal products in both their nuggets and burgers. While they are careful to avoid the term when talking solely about the patties, they use it consistently when talking about their nuggets, and their product platform in general. For example, their brand tagline is “Raised and Rooted, plant-based protein.” Some media outlets are avoiding this ambiguity (e.g. FoodNavigator), while some are adopting it (e.g. Gizmodo). 

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This ambiguity is in a broader trend of “plant-based” term creep. For example, Soylent often markets their products as having “plant-based protein,” even though they aren’t directly substituting for an animal product. Additionally, I’ve seen “plant-based beverage” in supermarkets refer to beverages like tea and juice.

It’s certainly confusing as a consumer to have terms shift meaning like this, but it’s not clear whether term confusion is good or bad for the industry. One risk is that consumers think that  non-vegan products are better for the environment, health, or animals than they actually are, allowing worse products to free-ride off the branding of better products. On the other hand, if someone eats a blended burger and concludes that plant-based products taste great, this may positively affect their perceptions of vegan products like the Impossible Burger.

Ultimately, it might not matter much what is considered plant-based, since it’s not clear if it’s the best marketing term anyways.

Endnotes

[1] Tyson already had a brand of meat that incorporated plant-based ingredients: Aidells. Alongside the launch of Raised and Rooted, Tyson also released a new line of Aidell Whole Blend products. However, given the ingredient list of these products, it seems like meat is a majority of the volume of the product. Therefore, they seem more like extended meats than blended products. Further, the branding is completely focused on providing unique tastes: their tagline is “Welcome to a world of unexpected flavor.” Therefore, I don’t think this brand is going after flexitarians, and given the lack of terms like “plant-based,” I’m not counting it as part of Tyson’s efforts to move into alternative proteins.

[2] To be clear, I’m assessing the short term impact on meat demand relative to where it would be otherwise, not compared to what it currently is. Meat demand may increase or decrease for reasons unrelated to Tyson’s new Raised and Rooted line.

Robert YamanComment