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Alternative Meats Could Drive Restaurant Industry Forward

Alternative meats are poised to drive the restaurant industry forward after the coronavirus pandemic ends as the traditional restaurant meat supply chains are crippled and suppliers struggle to keep up with customer demand.

Industry analysts have been indicating that this shift would eventually come. However, their projections generally assumed that restaurant customers would be the driving force behind the movement toward meatless alternatives.

Restaurants will soon face a critical decision as states begin allowing them to reopen: whether to embrace meatless alternatives or continue serving meat even if it means increasing menu prices and potentially alienating customers worried about the reemergence of the coronavirus.

What’s wrong with meat?

It’s time to face the music: the top of the meat supply chain is suffering, sending trouble downhill toward the suppliers who then unload it onto their customers. Slaughterhouses and meat manufacturers have been hard-hit by the coronavirus, leading to low production rates and total closures in some areas. In turn, suppliers like restaurants and grocery stores are passing the costs to their customers.

Recent USDA reports suggest that the slaughter rate for beef is down 31 percent, hogs are down 21 percent, and wholesale prices are up 36 percent this year. Adding to this issue, slaughterhouses are less productive as they reduce their workforce to abide by social distancing ordinances.

Furthermore, manufacturers like Tyson Foods are closing their plants for sanitation purposes to stop the spread of coronavirus to their workforce. Over 700 employees at the Tyson Fresh Meats plant in Perry, Iowa contracted the virus, making it one of the most concentrated workplace outbreaks in the country.

In response to the outbreaks at meat manufacturing plants, the League of United Latin America Citizen (LULAC) is urging both consumers and employees to participate in its Meatless May boycott. Part of the organization’s demands include paid sick leave and slower production rates so workers can increase social distancing.

Similar measures are leading suppliers to rely heavily on the USDA’s cold reserves to keep products on the shelves for their customers. However, these reserves are a means of controlling these ebbs and flows of meat supply, not supplying a nation with meat during a pandemic. While USDA hasn’t released the data yet, the low slaughter rates and increasing prices are reason to believe that the nation’s reserves may be tapped out.

These issues are trickling down to grocery stores and other restaurants that are running out of meat. Some Wendy’s restaurants have been forced to remove burgers from their menus because of meat shortages while grocery stores such as Wegmans, Kroger, and Food Lion are rationing the amount of meat customers can buy.

Who is leading the charge?

While meat manufacturers and suppliers suffer, two companies are leading the alternative meat industry into a new era—Impossible Foods and Beyond Meat—both of which currently sell their products in national fast food chains such as Burger King, Kentucky Fried Chicken, and McDonald’s.

And powerful investors are following these companies into the future. Bill and Melinda Gates, who originally backed both Beyond Meat and Impossible Foods, also reportedly invested in Hampton Creek Foods which just became JUST Inc. Virgin Mobile founder Richard Branson invested heavily in Memphis Meats, which specializes in cell-based meats.

Large meat manufacturers seem to be taking notice of the shifting tides as Tyson Foods announced it will launch vegan meat this summer.

Meanwhile, a slew of other companies are perfecting technology that will dramatically increase the production of meatless alternatives to match projected consumption rates.

Barcelona-based Novameat figured out how to “bio-hack” the 3D structure of meat proteins to develop a plant-based pork product with a similar fibrous texture as the real deal. According to the company’s website, its technology finely tunes the structure of the proteins to create its product on custom 3D printing machines.

Cell-based companies Future Meat Technologies, Finless Foods, Wild Type, and Aleph Farms all raised more than $10 million in 2019, leading analysts at Food Business News to declare that cell-based meat production may become scalable by the end of 2020.

How will this impact the restaurant industry?

At the beginning of the year, Restaurant Business Online predicted that zero-waste greens, cutting back on animal proteins, and veggie-centered dishes will be the fastest growing menu trends.

Data from the Plant Based Food Association and the Good Food Institute backs up these predictions as well. A report authored by both organizations found that meatless food retail sales grew at five-times the pace of total food sales for the second consecutive year. In all, the plant-based market is now valued at over $5 billion.

Some key areas of growth include:

  • Plant-based meat – 10 percent.
  • Dairy alternatives (cheese, yogurt, ice cream, etc.) – 6 percent
  • Emerging categories (spreads, dips, sauces, etc.) – 52 percent

For restaurants, these trends indicate there is a growing opportunity to expand their customer bases once they are allowed to reopen. Restaurants around the country are already choosing to offer fewer meat-centric dishes in favor of plant-based alternatives, even in surprising areas like the American South which is typically associated with slow smoked meats and artery-clogging soul food. Copper Branch in Ft. Lauderdale, Florida offers a 100-percent plant-based menu with a focus on power foods. True Foods in Buckhead, Georgia offers its customers an “anti-inflammatory diet” with vegan, vegetarian, pescatarian, and gluten-free options.

While many restaurant owners have plenty of time to pontificate about how to grow their business once it’s allowed to reopen, one choice seems to be obvious: embrace the plant-based menu options, or risk losing your business for good.

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