By Ciara Linnane, MarketWatch
The dizzying rise of the plant-based meat trend continued Thursday, with ingredients giant Archer Daniels Co. the latest big food player to jump on the bandwagon.
Chicago-based Archer Daniels /zigman2/quotes/203479136/composite ADM 0.00% said plant-based meat is one market it is eyeing as it works to offset “challenging external conditions,” that include the trade tensions between the U.S. and China that have disrupted food and agricultural trade flows, as well as the current outbreak of African swine fever in China.
“Fast-growing consumer trends such as plant-based proteins are creating long-term growth opportunities for our comprehensive portfolio of food and beverage solutions,” the company said in its second-quarter earnings release.
The alternative meat market has exploded into a major theme for investors and traditional food companies, ever since the enormous success of the initial public offering of Beyond Meat Inc. /zigman2/quotes/211617595/composite BYND +0.34% in May. Beyond Meat shares are trading at more than six times their IPO price as the company has signed up new distributors and restaurant clients.
Barclays estimates the market for plant-based or lab-made meat could climb to $140 billion in the next 10 years and food companies are moving fast to avoid being left behind.
Other food companies that have shown an interest in the sector include Tyson Foods Inc. /zigman2/quotes/201117502/composite TSN -0.29% , Kellogg Co. /zigman2/quotes/209631250/composite K +0.29% , Kraft Heinz Co. /zigman2/quotes/203625533/composite KHC +0.33% , Conagra Brands Inc /zigman2/quotes/200394144/composite CAG +0.29% and Nestlé SA /zigman2/quotes/208115528/delayed CH:NESN -0.89% and Kerry Group PLC /zigman2/quotes/202059924/delayed IE:KRZ -0.85% , among others. These companies have either invested in plant-based meat startups or have developed their own.
In the restaurant sector, Burger King parent Restaurant Brands International Inc. /zigman2/quotes/202094900/composite QSR +1.90% has launched tests of Beyond Meat breakfast sausage at Tim Hortons and of Impossible Burgers at Burger King. Impossible Meat, the private company behind the Impossible Burger, was founded in 2011 and is backed by Microsoft /zigman2/quotes/207732364/composite MSFT +0.05% founder Bill Gates, Khosla Ventures and Hong Kong billionaire Li Ka-shing, among others. The meatless burger was developed at Rutgers’ Food Innovation Center.
In case you missed it: Beyond Meat goes public with a bang: 5 things to know about the plant-based meat maker
Burger King earlier announced plans to take the Impossible Whopper nationwide starting Aug. 8 through Sept. 1.
Beyond Meat shares were down 11% Thursday, after the company priced a secondary offering of its shares at $160, an 18.6% discount to the closing price of the stock Wednesday, but more than six times the company’s IPO price of $25.