Food Industry Trends: The Market For Alternative Meat

The introduction of new alternative meat products into the grocery aisle, the fast food drive-in, and the trend towards healthier eating patterns are all factors in the reports issued on Wednesday that Barclays, JP Morgan, and other analysts predict regarding plant-based alternative meat products.

Those major analysts predict that the market for plant-based products will grow to $140 billion in 10 years. The major players in the industry segment, Impossible Foods and Beyond Meat, are banking on getting their share of that revenue influx. The combined effect of consumers being more health-conscious along with dietary restrictions (gluten allergy, soy allergy, vegan) as well as supply issues with traditional beef have led to this trend toward alternative meat products.

The secondary impact of the supply issues with beef and chicken are rising costs for those commodities, which has a direct effect on the profitability of a restaurant, diner, or fast food outlet. The mainstream launch into the alternative meat market has been spearheaded by Burger King with a partnership with Impossible Foods which has produced the “Impossible Whopper” sandwich.

The alternative meat version of a classic American hamburger sold so robustly in the test market phase that it has been rolled out nationally by Burger King. This news has been met with speculation that their rival, McDonald’s , will introduce a plant-based alternative meat burger option in the near future. It is speculated that they will work with Beyond Meat as a partner in that project.

The alternative meat option for products such as The Whopper, will provide an option to vegetarians and others who do not eat meat to become fast food consumers, and it opens options for hardcore fast food customers who struggle with having red meat 5 times or more per week. Those customers can now eat the alternative product, which all reviews say tastes like the “real meat” Whopper version, that they can visit Burger King every day, or nearly every day and use the plant-based option two or three times per week.

The gains from the fast food offerings and the additions to the grocery aisle will provide significant growth in sales for both companies as well as the rest of the industry segment. It should be noted that none of the players in the alternative meat space have developed an alternative to chicken.

Chicken, as a commodity, is still priced competitively and comparatively cost effectively when compared to the other traditional proteins and the plant-based protein alternatives. It remains to be seen whether that will play a role in a further shift by the restaurant, fast casual, and fast food outlets toward even more menu items that feature chicken.

The medical community has produced data for years around the dangers of eating too much red meat. The alternative meat trend is a response both in the grocery store aisle and the fast food counter to offset the trend towards eating less red meat. It is also a way to maintain profitability as the alternative meat protein sources are less expensive than beef to produce.

The demographics of the U.S. have changed as well, with Baby Boomers retiring and becoming more health-conscious with the time to dine out more frequently. The other end of the spectrum is the Millennials who trend toward being healthier in their eating patterns than prior generations were at that age, and they are armed with endless dietary information that they use to make food choices. This younger generation is staring to come into its own and have more disposable income to dine out or spend more money on a product such as an alternative meat entrée.

The Beyond Meat product sells for about $12 per pound in comparison to ground beef which sells for $5 to $6 per pound depending on the supplier or your geographic area. That premium is something that certain consumers are willing to pay, or if their dietary needs dictate it, they will pay for the alternative meat compared to the standard ground beef option.

The Beyond Beef alternative product is also appealing to those who are looking to go GMO-free, if they have a soy allergy, or if they are gluten free due to celiac disease or another autoimmune disease that necessitates them to observe a gluten free diet.

The alternative meat trend is also gaining popularity because of the environmentally friendly benefits of producing plant-based meat products. A study by the University of Michigan found that the Beyond Beef burger used 99% less water to produce than beef, 93% less land, and 46% less energy than a beef burger.

In a time of increased environmental awareness and conservation of resources, the alternative meat products provide a “green” friendly option to consumers. All of these factors drive the formula which Barclays, JP Morgan, and other analysts used to determine the explosive growth of the plant-based alternative meat market in the next 10 years. It stands to reason that they may be correct, and in a time where health, dietary considerations, and environmental conservation are “hot button” topics this industry could be at the right place at the right time.

Fast Food Recipe Changes: Smart Science or Smart Marketing?

One of the bigger news stories over the past few weeks in the mainstream media cycle was the series of announcements by fast food chains regarding the removal of artificial preservatives and other recipe changes. The news rides a trend of increased focus by the American consumer on natural foods and healthier eating.


However, at the core of the debate is the question whether this set of changes was smart from a food science perspective or is it a case of smart marketing? Will the changes to the recipes make the food taste different?


These questions will be explored as well as the background to the decisions from an executive level. This news follows the introduction of new chicken offerings by fast food giants McDonald’s and Subway recently that feature the removal of preservatives and artificial ingredients. Those changes made consumers, such as myself, pause and wonder what was in the chicken in the first place, if the chains had to pronounce the new supply basically as “real” chicken.


I have covered the natural foods trend for a while now, but I am still surprised at how some people within the media feel it is a “fad”. Where that label is a misnomer is that fads do not last as long as this trend has within the American food landscape. The sales of organic foods were at an all-time high in 2014, this “fad” is not slowing any time soon, and now you see the bigger players across the industry getting on board.


The most recent of those big players to drop into the recipe change trend came just before the Memorial Day holiday weekend, when Taco Bell and Pizza Hut announced changes to make their food offerings “more natural”. Both chains are experimenting with the revamped recipes at this point. Taco Bell mentioned in the press release to the media that they are focused on removing ingredients such as natural black pepper flavor and replacing it with real black pepper.


I have prior industry experience in the flavor industry and this trend of replacing flavor systems, whether they be natural or artificial flavors (Panera Bread is removing all artificial flavors and ingredients from their menu by the end of 2016) will damage the flavor ingredients industry which has already been slowed by other factors. The chief factor in the downturn being the decreased number of new products being developed in many segments of the food industry by the large food production companies.


These changes to the menu offerings of several major fast food operators will have a dramatic impact on the supplier side of the food industry across many segments from preservatives, sweeteners, and other industrial products. It is similar to anything else, it is a relationship of cause and effect.


Taste and See


The big question at the forefront of this debate is whether these changes are smart from a food science perspective or whether they are just simply an exercise in smart marketing? I think the “jury is still out” on the answer. In my view the new recipes will have to be rolled out first and then be subjective to public opinion before we know the answer.


In a related issue, it remains to be seen whether the taste profiles of some of these menu items will be altered based on the changes made to the recipes to make them more natural in orientation. Some industry experts seem to feel that the changes to the recipes being proposed by these restaurant chains will inevitably alter the taste profiles of those menu offerings in some way.

Panera Bread, for instance, has already completed the most painstaking of the menu changes at hand: the removal of artificial sweeteners and chemical ingredients from their salad dressings. They believe that the taste profiles are similar to the original line of dressings for their extensive salad offerings.


However, in the end, as the food expert featured on Fox Business explained relative to Panera Bread and I am paraphrasing: all these changes are all well and good but at the end of the day their main product is still bread, and bread is still inherently unhealthy.


Other restaurant chains have publicly stated that they will only make these recipe changes if it makes sense from both a taste and a cost perspective. In the event that the executives at a given company feel that the taste profile is too dramatically altered, or if the cost of the alterations to an all-natural recipe are cost prohibitive, then it will be scrapped.


Smart Marketing


I mentioned earlier that I have industry experience in the flavor industry working on product line extensions with the largest food companies in the world. I also have experience in marketing in a variety of other industries and I can tell you, and some other industry experts agree with this assessment, that most of these announced recipe changes from the large fast food restaurant operators are based on smart marketing more than any other variable within this equation.


Taco Bell, for instance, took a hit back several years ago when it was discovered that they used GMO corn in their tortilla shells and other corn based menu items. They took another hit when they had issues with their supply of beef for their menu items back about five years ago.


The net effect of those two public relations nightmares caused the executive team at Taco Bell and other fast food operations to look to the natural foods trend to bring some positive marketing and media coverage to the often negative feedback loop which is the fast food industry.


In the case of a chain like Panera Bread it is smart marketing more than smart food science and for two reasons: it appeals to the purchasing habits of their core demographic customer base, and it distracts somewhat from the fact that their main offering is still bread based products loaded with calories.


It is also true in the case of Pizza Hut, which is trying to stave off fierce competition from a resurgent Domino’s and a stalwart in Papa John’s, their executive team looked at this angle as a potential avenue to gain a point of difference with the customer. If they can tout that they are using natural products in their pizza offerings they are trying to win over a general public that is very much in tune with that natural products messaging.


This is a developing story and one where I am sure we have not seen the end. I am confident that more companies will come forward with pledges to change their recipes or their product offerings to reflect a change to more “natural” ingredients. It may, in some cases, end up costing the consumer more money for the same products before the changes were indoctrinated.


In the end, this whole scenario is more about smart marketing than anything else as these major food producers and restaurant chain operators all vie for one thing and one thing only: your money.







Fast Food Wage Wars

The news cycle recently has been littered with stories on the domestic front regarding the labor strife within the major fast food chains. The news today featured footage of workers protesting peacefully in front of a Burger King restaurant.


The central issue here is wages, and this labor turbulence follows a spirited, and at times, heated national debate over the raise in the minimum wage. The political spectrum and the general public are largely divided over the issue, and in my home state of New Jersey, the public referendum on the last ballot dealt with the minimum wage. The people in New Jersey overwhelmingly voted to raise the minimum wage, though in a state with a high standard of living, it still may not be enough to help some workers.


Some politicians believe that the raise in the minimum wage is going to slow or halt part time job growth. Some business leaders share this view as well, and have made the new minimum wage standards the scapegoat for a sputtering economy.


Fast Food Wage War


The wage issues in the fast food industry impact all the major industry players: McDonald’s, Burger King, Wendy’s, and KFC/Yum Brands. The workers in this case are looking primarily for the following:


  • Wage increase to $15.00 per hour
  • Ability to unionize


These two goals may seem reasonable to some people, but the reality here is that both objectives are problematic, and will probably be difficult to achieve.


In most states that voted for a minimum wage increase, the wage went from $7.25 or $7.40 per hour to around $10.00 per hour. These workers are seeking an additional $5.00 per hour increase. That is going to be met with resistance by the respective corporations they are employed by in the coming weeks.


The second issue is the ability to unionize, some people do not realize that the ability of Wal-Mart to be so competitive on pricing for the products they carry is because the corporation does not allow unionized labor of any kind.


This allows Wal-Mart to be very competitive in all products but particularly in the grocery segment because their competition: the national/ regional grocery store chains have unionized labor forces. The unionized work forces do not allow the grocery stores to stay open as late as Wal-Mart. In addition, the unions involved creates a wage threshold for these grocery store chains where they cannot compete on price with Wal-Mart and remain profitable.


In fairness to Wal-Mart, they maintain that while not allowing unionized workers, they pay a good wage and provide their employees with great opportunities to grow within the company.


The same profitability scenario with fast food is not a reliable comparison because the profit margins within fast food and the entire business model is completely different.


I am also unsure of the potential impact unionized workers could have on the fast food business or if it would impact the ability for the respective corporation to continue providing low cost products such as a “dollar menu” or “value menu” with the same margins for profitability. I have read that it is a price sensitive business, though I am not sure what that actually means in terms of dollar figures.


The restaurant and fast food industry groups are pushing back with great force regarding the idea of a raise to $15.00 per hour. Their rationale is again that the fast food industry is price sensitive and cost sensitive and that the $15.00 figure is too steep for them to meet at this point.



Wage Theft


There are currently three different states involved with cases in their respective judicial systems involving McDonald’s and allegations of wage theft by their employees.


The workers here claim that the fast food giant has deprived them of wages through a variety of ways. The company has not formally responded to the allegations.


The workers are using these lawsuits as further leverage for the increase in wages they seek as well as the ability to unionize.


The cost to McDonald’s is numerous unhappy employees which disrupts company morale on the restaurant level, and bad publicity which could hurt their sales.




In my view, nobody should have to try to survive on $7.25 an hour or even $10.00 per hour. This issue is not going away without a resolution that is concrete to improve conditions for these workers in some way.


I also reject the notion by some politicians that the raise in the minimum wage has negatively impacted job growth. It is a very sad state of affairs in our world if multi-billion dollar corporations are going to haggle with people over a few dollars more per hour.


The situation here comes down to multi-billion dollar companies that want to keep more of their profits and not pay their workers on the ground level. It is greed driven activity, and it sends a very negative message by these corporations to the general public, which for a fast food company is also their target customer base.


I have read accounts of protesting workers today throughout this country who were told by their manager that they would no longer be on the schedule to work if they participated in the protests.


In fair balance, reports have stated that McDonald’s is looking into some of the wage theft claims more closely and is going to take action on franchise owners who may have violated certain policies.


In the end, these people work very hard on the restaurant level to provide customer service or cook our fast food. Many of these workers have families or dependents. All of them deserve to be paid a fair wage for the work that they do each day.



(background information and statistics courtesy of USA Today, The Washington Post,, and CBS