Meat Supply Chain: Where's the Beef? - Inbound Logistics
Demand Planning, Food Logistics, SustainabilityFacing empty meat cases thanks to COVID-19 shortages, many consumers are flipping to plant-based meat alternatives. Companies are responding to the demand with relish, producing brands that taste more and more like the real thing, but not without sizzling supply chain challenges.More to the Story:Plant Protein PrimerBurger BattlesMove over Tofurky.The household name that in 1995 gave vegetarians a Thanksgiving option to the traditional roasted bird now faces far more competition in the plant-based meat alternative product category. Unlike more recent entries to the market such as burgers and snack foods, the Tofurky Holiday Roast never pretended to be anything more than tofu with seasonings reminiscent of holiday flavors.The Oregon company's counterparts today are engineered to provide a similar taste and mouthfeel to meat—and suppliers continually develop novel ingredients that help them do that. For example, Improved Nature's soy-based fibrous plant proteins give a meat-muscle texture to its plant-based chicken breast fillet products.The companies that make Beyond Burgers, Impossible Burgers, and similar products are responding to increasing consumer interest in diets that include more plant-based foods. The global plant-based meat market in particular is expected to increase from $150 million in 2018 to $320 million by 2025, according to Global Market Insights. No Shortage of OpportunityThe perception that plant-based meat alternatives are healthier than animal products fuels strong consumer interest, although the meat industry is pushing back. Still, with COVID-19 outbreaks in meat-processing facilities creating shortages nationwide, some alternative meat manufacturers are seeing an uptick in sales as supermarket shoppers use empty meat cases as an opportunity to try the plant-based options."During the first few weeks of the COVID-19 outbreak, conventional grocery stores reported 40% growth in Tofurky sales compared to the previous year," says Jean Nesterak, vice president of supply chain for Tofurky.While Tofurky's strong supplier relationships help make sure it can meet that demand (Nesterak says that 80% of its suppliers have been with the company since the beginning), even that's not enough to support the supply chain in some situations.As more and more products enter the marketplace, there's greater demand and competition for a key ingredient in all of them: protein. Beyond Meat, for example, uses yellow pea protein in its burgers."Companies are having a hard time sourcing yellow peas in sufficient quantities at prices they're comfortable with," says Vincent Smith, professor of economics at Montana State University. "If you pay enough, you can convince farmers to switch from corn or wheat to pea production."The question is what companies are willing to pay as they focus on profit margins.That increased growth in the number of products makes all aspects of the supply chain more competitive. It's particularly difficult for companies such as Tofurky that use only non-GMO ingredients (meaning the genetic makeup of the plants used in its products has not been altered)."We use soybeans, and 96% of the crop worldwide is GMO-based, so trying to make sure we get organic soybeans can be a challenge," says Nesterak.Wheat FeatNo Evil Foods, which makes Comrade Cluck chicken substitute, Pit Boss pseudo-pulled pork, and other meat alternatives with as few ingredients as possible, would like to source more ingredients closer to home in North Carolina. The obstacle is protein quality."We have to source our wheat protein from Europe because they use fewer pesticides on crops there," notes co-founder and CEO Mike Woliansky.Brooklyn-based kelp jerky maker Akua's supply chain problems have been related to logistics rather than ingredient availability. When kelp is harvested in the spring, it must be dried or flash-frozen immediately."Most co-packers don't have a giant freezer for 30 pallets of kelp, so in the beginning, every time we needed to run a batch, we had to set up a shipment to the facility," says Matthew Lebo, co-founder of Akua.The company recently solved that challenge by contracting with a processor that has the on-site freezer capacity required because it specializes in frozen foods. Lebo is concerned that COVID-19 has created another issue."Because many restaurants are closed and aren't buying kelp, there will be too much of it," he says. "If farmers lose money on this year's harvest, will that restrict our supply for next year?"Manufacturers can also face problems caused by long crop-growing lead times. Farmers are planting now for crops that will be harvested in one year. If a product in a brand's line suddenly takes off, companies might find it difficult to meet demand because they can't get enough ingredients.Automation is an important supply chain element at startup Roc Regenerative Farms in Rochester, New York. The company recently launched hybrid burgers and sausage that improve the nutritional value of grass-fed beef and free-range chicken by blending them with organic mushrooms, which are grown by its sister company Leep Foods."Because we're in a high-cost labor market, we have to innovate to exist," says George Zheng, a co-founder of both companies. "We're continuing to invest in machine design that no other company has."Plant-based alternatives won't replace the real thing anytime soon because of taste preferences, habits, and consumer budgets. "Meat is highly subsidized so it's incredibly cheap," says Tony Martens, co-founder of San Diego's Plantible Foods, which is gearing up to provide aquatic plant lemna as a protein source.As Tofurky has demonstrated, however, plant-based meat alternative products have legs—they're just not attached to animals.
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