Tyson Foods, Inc., through its venture capital arm Tyson Ventures, invested in the San Francisco-based company, New Wave Foods. Tyson acquired a minority stake of 20% of the Californian company; further financial information is yet to be disclosed.
Marketsandmarkets™’ View Point
Tyson Foods, Inc. (NYSE: TSN) is one of the leading food companies recognized as an innovator in proteins. The foremost aim of the company is to innovate continuously to produce more sustainable protein with customized offerings for everyone. After the deal with Beyond Meat, the company is set to enter into the plant-based seafood business by investing in New Wave Foods, a plant-based seafood producer established in 2015. The startup is focused on the production of plant-based shrimp as an alternative for seafood, which will be ready for foodservice operators by 2020. According to Mahima Solanki (Research Associate at MarketsandMarkets™), the increase in demand for alternative protein food among the population has been propelling the market growth. Seafood is one of the best sources of proteins; however, supplying fish and other aquatic animals sustainably without depleting the natural resources is a big challenge. Thus, the growing demand for seafood, coupled with sustainability issues, pushes the food companies to enter into plant-based seafood options to cater to customer demands.
Impact of Investment
Tyson Foods is one of the leaders in plant-based protein production. The company is committed to offering the market a range of alternative protein options. Being a leader in the business, this investment would help the company to diversify its product portfolio of alternative proteins and maintain its focus on investing in companies with disruptive products and breakthrough technologies linked with the core business to serve the global population. Suraj Nagvenkar (Assistant Manager, Food & Beverage at MarketsandMarkets™) identified that the investment offers an opportunity for the company to strengthen its positioning as an innovator in the alternative protein industry. New Wave Foods and Tyson Foods are engaged in complementary businesses, and the combination will lead to a strong market position in one of the most important and booming segments of plant-based products—alternative shrimp. In recent years, growing consumer awareness regarding sustainability issues due to intensive aquaculture practices and its negative impact of the environment has resulted in a shift toward plant-based options.
The figure given below showcases the opportunity in the plant-based fish market. The market for plant-based fish is estimated to grow at a high rate; changing consumer preferences from meat to plant-based protein is one of the main reasons driving the market as an alternative protein source.
FIGURE 1 Plant-based Fish Market, 2019 vs. 2025 (USd billion)
e – Estimated, p – Projected
Source: Related Research Publications, Government Publications, Company Press Releases, Company Annual Reports, Company Websites, Company Publications, and MarketsandMarkets™ Analysis
Tyson is not alone in aiming to diversify its plant-based product portfolio; other food giants such as Hormel and Kellogg also entered the business with announcements directed at launches of plant-based food products in the market. Impossible Foods, another big name in the industry, has also announced work on plant-based fish products, aiming to create replacements for all the animal-based protein foods by 2035. The growing popularity of plant-based meat products is encouraging the market players to come up with alternative plant-based options for every possible meat source. Thus, companies such as Tyson Foods and New wave Foods have invested in diversifying their capabilities in terms of alternative sources of proteins such as plant-based shrimps and other seafood varieties, adding to the competitive landscape.
The investment by Tyson Foods New Wave Foods is a key to product diversification, which has been vital in enabling the company to maintain its leadership in the plant-based protein industry. As seafood is one of the primary protein sources for the end consumers, the demand is growing at a higher rate, ultimately creating environmental pressure due to unsustainable aquaculture practices. Entering into a market with sustainable seafood options is one of the solutions to reduce such ecological concerns. Thus, the boom in plant-based food and its popularity among health-conscious consumers is creating opportunity for plant-based food manufacturers to come up with innovative products.
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