|August 01, 2019|
This is the beginning of the end of the beef industry
|There's a famous Gandhi aphorism about how movements progress: "First they ignore you, then they laugh at you, then they fight you, then you win." That was actually written by the Workshop on Nonviolence Institute as a summary of Gandhi's philosophy, but regardless, it's remarkable how often it accurately describes the evolution of causes, from legal cannabis to gay marriage. I've been thinking about that quote since I wrote my first piece about plant-based meat (or alt meat, as I like to call it) for Outside in 2014. Back then, we were firmly in the "laugh at you" stage. Beyond Meat, the first of the Silicon Valley startups to use advanced technology to produce extremely meat-like burgers, had been ignored for its first few years, but in 2014, it released its Beast Burger, which was treated by the press and public as a slightly off-putting curiosity. What was this stuff? Would anyone actually eat it? Ewwww.|
That product wasn't very good---I compared it to Salisbury steak---and when Ethan Brown, Beyond Meat's founder, announced his intention to end livestock production, you could almost hear the National Cattlemen's Beef Association laughing in the background.
But I didn't laugh. I knew it would keep getting better and beef wouldn't. And I thought the bar was pretty low. Sure, steak is great, but ground beef makes up 60 percent of beef sales, and most of it is more Salisbury than salutary, a greasy vehicle for the yummy stuff: ketchup, mushrooms, pickles, bacon, sriracha mayo. I knew I wouldn't object if my central puck came from a plant, as long as it chewed right and tasted right. I suspected others might feel the same.
In the following years, Beyond Meat was joined by Impossible Foods, a more sophisticated startup with even more venture capital. Its Impossible Burger was way better than Salisbury steak. All the cool cats started serving it, from David Chang in New York to Traci Des Jardins in San Francisco. My conviction grew.
Part of the appeal of the new burgers is their smaller environmental footprint. Beef is the most wasteful food on the planet. Cows are not optimized to make meat; they're optimized to be cows. It takes 36,000 calories of feed to produce 1,000 calories of beef. In the process, it uses more than 430 gallons of water and 1,500 square feet of land, and it generates nearly ten kilograms of greenhouse-gas emissions. In comparison, an Impossible Burger uses 87 percent less water, 96 percent less land, and produces 89 percent fewer greenhouse-gas emissions. Beyond Meat's footprint is similarly svelte.
Yes, a good argument can be made that small-farm, grass-fed beef production (in places that can grow abundant grass) has a very different ethical and environmental landscape, but unfortunately, that's just not a significant factor. America gets 97 percent of its beef from feedlots. And feedlots are irredeemable.
By 2018, sales of both the Beyond Burger and the Impossible Burger were surging, and the companies began to ink deals with restaurant chains. Beyond Meat got Carl's Jr. and A&W (as well as supermarket chains like Food Lion and Safeway), while Impossible got White Castle.
I tracked down a White Castle shortly after the Impossible Slider arrived in the spring of 2018. I'd never been to a White Castle, so I ordered an Impossible Slider and a regular slider. The Impossible was...fine. About what you'd expect. White Castle steams all its meat, which is hard to get past, but with plenty of cheese, it went down easy.
The regular slider, on the other hand, was horrific. I peeled back the pasty bun and stared at the fetid shingle inside. It was appallingly thin and grimy. It made the Impossible Slider look lush and juicy. The bar for fast-food burgers is even lower than I thought. Nobody will miss these shitty little brown things when they're gone.
Perhaps this explains why the chains are latching on to plant-based burgers as if they were life rings. White Castle initially tested its Impossible Slider in just a few locations in New York, New Jersey, and Chicago in April 2018. It was such a hit that the company quickly expanded the program to all 380 outlets. "People are coming back for it again and again," White Castle's vice president, Jamie Richardson, said with a touch of astonishment.
They're coming back at Del Taco, too, which launched a Beyond Meat taco in April. Within two months, it had sold two million, one of the most successful product launches in its history, so it decided to add Beyond Meat burritos as well.
And then there's Burger King. The second-largest fast-food chain in the world rattled big beef's cage by testing an Impossible Whopper in St. Louis in April. Resulting foot traffic was so strong that Burger King decided to serve the Impossible Whopper in all 7,200 restaurants, marking the moment when alt meat stopped being alt.
That was enough to get the meat industry to snap to attention. "About a year and a half ago, this wasn't on my radar whatsoever," said Mark Dopp, head of regulatory affairs for the North American Meat Association, to The New York Times. "All of a sudden, this is getting closer."
The strategy, predictably yet pathetically, was to engage in an ontological battle over the term meat itself. Big beef successfully lobbied for a labeling law in Missouri banning any products from identifying themselves as meat unless they are "derived from harvested production livestock or poultry." (But this is wrong; the word simply meant sustenance for the first thousand years of its existence.) Similar labeling laws have passed or are pending in a dozen more states, most of them big ranching ones.
Obviously, none of this has stemmed the rise of alt meat. But it did make me think again of Gandhi (a staunch vegetarian, FYI). They ignored, they laughed, and now they were fighting.
This stuff, I thought, just might win.
This year is shaping up to be the inflection point when this becomes obvious to everybody else. Beyond Meat's products are in 15,000 grocery stores in the U.S., and its sales have more than doubled each year. On May 2, it held its IPO, offering stock at $25, which turned out to be a wild underestimation of what investors thought the company was worth. It immediately leaped to $46 and closed the day at $65.75. That one-day pop of 163 percent was one of the best in decades, putting to shame such 2019 IPOs as Lyft (21 percent) and Pinterest (25 percent), to say nothing of Uber (negative 3 percent). In the following days, it kept ripping, climbing above $150, where it has stayed. The market currently estimates Beyond Meat's worth at close to $10 billion.
Not to be outdone, that same month, Impossible Foods raised an additional $300 million dollars from private investors (for a running total of $740 million and a valuation of $2 billion) and announced it would be joining Beyond Meat in America's grocery stores later this year. These companies are no longer little mammals scurrying around the feet of the big-beef dinosaurs. And they are gearing up for an epic head-to-head battle.
Both Beyond Meat and Impossible Foods recently released new, improved versions of their meat. For the past week, I've subsisted on little else. It feels great. Both have the same amount of protein as ground beef (about 20 grams per quarter-pound serving) and less fat. Being plant-based, they also provide a healthy shot of fiber. Both get their unctuousness from coconut oil.
But the core of each formula is very different. Beyond uses pea protein, while Impossible uses soy. Beyond gets its bloody color from beet juice; Impossible uses heme---the same molecule that makes our blood red---to achieve its meaty color and flavor. This is its killer app. Beef gets its beefiness from heme. When you cook heme, it produces the distinctive savory, metallic flavor of meat. Since heme is normally found in blood, no veggie concoction has ever used it. Soy plants do make microscopic amounts of it, but not enough to ever use. Impossible Foods' breakthrough was to genetically engineer yeast to produce soy heme in a tank, like beer. This GMO process is a deal breaker for some people, but it makes all the difference. The Impossible Burger is incredible, the Beyond Burger merely passable.
The Beyond Burger comes as two premade four-ounce patties (packaged in a plastic tray wrapped in more plastic---strike one). They don't quite pass as hamburgers. They're too wet and too pink. They almost resemble finely ground salmon burgers. They cook to a satisfying toothiness on either a grill or a griddle, but there's an inexplicable cellulose quality to the texture. (This is even more pronounced in the Beyond Sausage.) The flavor is also slightly off. There's a hint of fake smoke and an earthiness I'm guessing comes from the beet juice. (My wife would argue that it's more than slightly off; she has to leave the room when the Beyond Burger is cooking. But she also hates beets.) It's not an unpleasant experience, just don't expect the burgergasm you get from a quarter pound of USDA prime.
Impossible Foods, on the other hand, has delivered burgergasm after burgergasm. It's shine-up-the-Nobel-Prize good. Not only does it taste like ground beef, it looks and acts like it, too. It's truly plug and play.
That wasn't true for the previous version. When I first wrote about Impossible Foods three years ago, I had to beg the company to send me one patty. It was hesitant. Back then, the burger was fussy. It didn't work well on a grill, so you had to pan-fry it just right. The company made me do a Skype tutorial first, and when the micropatty arrived in a refrigerated box, with a special bun and special sauce, it was accompanied by pages of printed instructions. The burger was good, certainly the most meat-like plant patty up to that point, but it still tasted like a lite product---a little cleaner, a little less decadent, a little bit like filler.
This time, when I asked the company to send me a burger, a five-pound block of meat---clearly what it normally ships to food-service companies---arrived on my doorstep. No instructions, no hand-holding. It looked identical to ground beef, so that's how I treated it. And that's how it performed. I made sliders, kebabs, nachos, chili, Bolognese sauce, even a little tartare (note: the company frowns hard on this).
If I'm being honest, I find that I slightly prefer it to real beef. It's rich and juicy, more savory, but still somehow cleaner and less cloying. Now when I go back to regular beef, I notice a whiff of the charnel house in it, something musty and gray that I don't like and don't need.
In the coming years, expect a lot of other omnivores to have similar epiphanies. Impossible Foods has performed more than 26,000 blind taste tests on its burger, which is on track to surpass ground beef in those tests in the near future. What happens then? Impossible has been laser focused on creating the perfect simulacrum of ground beef. But why? The cow never had a lock on gastronomic perfection. It was just the best we could do given the limitations of the natural material. Firelight was fine until electricity came along. Then things got really interesting.
Look for something similar to happen with alt meat. For now, it's necessary to make people comfortable with the familiar, the way Steve Jobs loaded the early iPhones with faux felt and wood grain. But once people stop expecting burgers to refer to a hunk of flesh, the brakes on deliciousness will be released.
This will be generational. All change is. 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.
As this shift accelerates, the beef industry will lose its last advantage---price. Most offerings made with Beyond Meat and Impossible Foods are about a buck a burger more expensive. But it's inherently cheaper to make a burger directly out of plants than it is to feed those plants to an animal first. Beef is currently cheaper because of scale. Big food companies can negotiate tremendously reduced prices for feed, and gigantic factories and supply chains are much more efficient to run.
But the playing field is leveling fast. Last week, Dunkin' announced a new Beyond Sausage breakfast sandwich that will be just 14 cents more than the meat version. But more than anything Beyond Meat or Impossible Foods has accomplished, the true death knell for the cattlemen is how the mainstream food industry has embraced alt meat. Whole Foods just announced it will start selling burgers from the UK-based startup the Meatless Farm in all of its stores. Nestlé is launching its Awesome Burger this fall. Tyson Foods, America's largest meat producer, just debuted its own plant-based nuggets, with more products to come. Tyson CEO Noel White said he expects Tyson "to be a market leader in alternative protein, which is experiencing double-digit growth and could someday be a billion-dollar business for our company."
If that quote isn't enough to send chills down the spine of any meat producer, try this one from Perdue Farms chairman Jim Perdue: "Our vision is to be the most trusted name in premium protein. It doesn't say premium meat protein, just premium protein. That's where consumers are going."
And that's where these companies will go. Beef is a headache. It comes with a lot of baggage to worry about: antibiotic resistance, E. coli outbreaks, animal welfare, climate change. It's the kind of icky biological variable that corporate America would love to leave behind---and as soon as beef becomes less profitable, it will.
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. As traditional meat companies embrace alt meat with the fervor of the just converted, making it cheap and ubiquitious, it's unclear if Beyond Meat or Impossible Foods can survive the feeding frenzy (though Impossible's patents on its core IP may help), but at least they'll be able to comfort themselves with a modern take on Gandhi's wisdom:
First they ignore you.
Then they laugh at you.
Then they sue you.
Then they try to buy you.
Then they copy you.
Then they steal your shelf space.
Then they put you out of business.
Then you've won.