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Large Agribusinesses Purchasing Stakes in Fake-Meat Markets
USAgNet - 09/10/2019

Bunge Ltd, one the world’s biggest grain traders, recently disclosed the 1.6% stake it had purchased in the fast-growing fake-meat startup Beyond Meat. The play looked smart after the stock surged more than 250% since the faux burger and sausage maker’s initial public offering in May, reports Reuters. Beyond Meat’s (BYND.O) market capitalization of $9.9 billion is now larger than Bunge’s (BG.N), a 201-year-old firm with 31,000 employees.

No wonder many top agricultural firms want to grab their cut of the booming market for plant-based fake meat. Bunge’s investment is just one example of how grain traders and seed companies are trying to capitalize on a market that now accounts for 5% of U.S. meat purchases - a share expected to triple over a decade, according to investment management firm Bernstein. That growth would mirror the fast ramp-up of milk substitutes made from crops such as almonds.

“I definitely think this is going to continue to drive demand,” said Vince Macciocchi, president of the nutrition group at Archer Daniels Midland (ADM.N), one of Bunge’s chief rivals.

ADM and privately-held grain trader Cargill are selling processed peas and soy proteins to consumer food companies and restaurants that use them to make vegetable burgers, sausages, fish substitutes and other faux-meat products. They are also getting into the business through acquisitions and corporate partnerships or by leveraging their labs and research capabilities to help make new plant-based products for clients including food and beverage makers.

Seed company Corteva (CTVA.N) - which spun off in June after a merger of Dow Chemical and Dupont (DD.N) - is studying potential vegetable seed offerings, according to Reuters.

Grain traders and seed-makers are following the lead of Beyond Meat and another startup, Impossible Foods, along with traditional meat producers such as Tyson Foods (TSN.N) and Maple Leaf Foods (MFI.TO) that have cashed in on plant-based meat substitutes. Demand for meat alternatives has soared as consumers add plant-based protein to their diets for health reasons and out of concern for animal welfare and environmental damage from livestock farming.

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