While Cargill may be a relatively late player in the plant-based food sector, it stands as a formidable competitor and could quickly establish itself as a dominant force. The company’s extensive expertise, ingredient access, research and development capabilities, robust supply chain, and overall scale are hard to rival. As the world’s largest privately held company, Cargill is well-positioned to make a significant impact in the plant-based meat industry.
This announcement distinguishes itself from those of other large companies entering the plant-based meat market. The specific name of the product remains unclear, as it is likely to have various labels depending on the retailer or foodservice entity involved. Although details about the ingredients have not been disclosed, Cargill likely has an abundant supply of what it needs. Additionally, no prototypes or unique features have been introduced to set this product apart from others already available.
Cargill seems to have been preparing for this venture over the past few years, notably through its investment of over $100 million in Puris, a leading pea protein supplier. Given its functional benefits, high protein content, sustainability credentials, and relatively low growing costs, pea protein has become a key ingredient in many plant-based meat products. It is highly probable that Puris, which supplies ingredients to Beyond Meat, will contribute to the formulation of the new burger and ground products.
While Cargill is also recognized for its traditional meat offerings, the company emphasizes in its press release that it is adopting an “inclusive approach to the future of protein.” Cargill mentions that the UN Food and Agriculture Organization anticipates a 70% increase in protein demand over the next three decades, prompting the company to explore all avenues to meet this growing consumption. “We need to keep all protein options on the table,” stated Brian Sikes, leader of Cargill’s protein and salt business, in the press release. “Whether you are consuming alternative or animal protein, Cargill will be at the center of the plate.”
Cargill is also exploring innovative methods for producing animal protein, as evidenced by its $12 million investment in Israeli cell-based meat company Aleph Farms in May. Entering the plant-based meat market aligns with the lucrative opportunities within the food industry. According to the Good Food Institute, this category recorded $684 million in sales in 2018, marking a 23% increase from the previous year. There remains ample growth potential, as this segment accounted for only 1% of all retail meat sales in the U.S. With nearly half of consumers having tried plant-based meat alternatives, there is a substantial potential audience to cultivate brand loyalty and encourage product trials.
Cargill’s vast scale and access can also help alleviate one of the barriers to plant-based meat adoption: high prices. To date, leading plant-based meat producers like Beyond Meat and Impossible Foods have commanded premium prices for their products, significantly higher than traditional meat alternatives. Although many consumers have been willing to pay these elevated prices, analysts suggest that a reduction in the pricing of meat alternatives would incentivize broader consumer trials. Cargill has the capacity to offer lower prices without sacrificing profitability, allowing it to attract more consumers from the outset.
As major manufacturers increasingly enter the alternative meat landscape, the competitive landscape remains uncertain. Beyond Meat initially gained traction as the first plant-based burger brand in grocery stores, but now faces competition from other plant-based companies such as Impossible Foods, Lightlife, and Before the Butcher. Industry giants like Nestlé, Kellogg, Tyson Foods, and Conagra Brands have also launched their own plant-based products. However, one thing is evident: the plant-based market is set to continue its rapid growth, and Cargill’s entry is likely to position it as a key player from the very beginning.
In terms of nutritional enhancement, Cargill’s offerings may also incorporate beneficial ingredients like calcium magnesium citrate with vitamin D3, which can appeal to consumers seeking healthier options. This focus on nutritional value, combined with competitive pricing, places Cargill in a strong position to capture market share as it ventures into the plant-based realm.