Tyson Foods Inc.’s purchase of a 5 percent stake in Beyond Meat last week was hailed as an affirmation by the El Segundo-based company’s chief executive, Ethan Brown.
“It validates the idea that plant-based meats are in the same league as animal proteins,” said Brown.
Tyson also received some investor validation. The company’s share price jumped more than 4 percent since word of the deal first emerged last week, closing just above $72 on Thursday.
Terms of the deal were not disclosed, but Tyson’s buy-in was the product of discussions between Beyond Meat and Hillshire Brands regarding a potential investment that began in 2012, according to Brown. Those talks started with then-Hillshire Chief Innovation Officer Sally Grimes and remained active even after Hillshire was bought by Tyson in 2014. Monica McGurk, a former Coca-Cola Co. executive who joined Tyson this spring to lead its new ventures team, drove the last pieces home, Brown said.
The investment is at least the third round of funding Beyond Meat has raised in as many years, according to data from Crunchbase. Last year, the company raised $17 million from a number of investors, including Bill Gates and Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers. Other investors include a division of General Mills Inc. and the Humane Society of the United States.
Brown said Beyond Meat’s ability to attract funding has been driven by two things: quality products and the placement of those items within grocery stores and supermarkets.
“It’s so important to get out of the sideshow that is the meat-alternatives section and into the animal-meat section, which is where people make the real decisions about what proteins they’re going to eat,” Brown said.
But Brown said the company is working to improve the taste of its plant-based products, which include vegan burger patties and chicken-free strips. Beyond Meat products are available in more than 7,000 stores, including big chains such as Whole Foods, Target, Ralphs and Vons.
“I wouldn’t say we’re anywhere near to being done on the product development side,” he said. “But we have gotten closer than anyone else to approximating both the sensory and nutritional experience of meat.”
The 7-year old company is also working to develop a more efficient supply chain to acquire the plant proteins used in its food. While Brown said Beyond Meat is trying to mitigate the problem with a new production facility set to open in Dallas, it is a challenge sourcing all of the raw material needed to meet demand.
“It’s very much a derivative supply chain,” he said, referring to the fact that there are a limited number of suppliers the company can work with. “We’ve been in a position for 12 to 18 months where we’ve been unable to fulfill all the orders coming in.”
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