By Theopolis Waters
CHICAGO (Reuters) - Burgers made from plants instead of animals are capturing more space on U.S. barbecue grills this summer, fueling sales in the niche products that could reach $5 billion globally by 2020.
Plant-based meat foods are now available that include beet juice for color and canola oil to simulate fat. These changes are not only pulling in consumers but also one of the powerhouses in traditional meat production, Tyson Foods Inc <TSN.N>.
Tyson jumped into the sector last October when it bought a 5 percent stake in California-based Beyond Meat. Tyson's Chief Executive Officer Tom Hayes has said demand for plant-based protein is growing a little faster than for animal-based.
That trend was in evidence at a recent picnic of the Christian Tabernacle Church - a small primarily African American congregation in Chicago's western suburb of Roselle.
Five grills seared veggie burgers alongside summertime meat staples: ribs, bratwurst and hog dogs. Church member Doug Parker said vegetarian foods were added to the traditional mix two years ago to address the rise in youth obesity.
"I had to make a lifestyle change and I like the veggie burgers a lot. They've come a long way from a time when they tasted like vegetables," said Parker, who has cut back on meat since being diagnosed with type 2 diabetes eight years ago.
The U.S. summer grilling season, which runs from early May to September and includes three holidays, is a key sales period for burgers, ribs, steaks, and now alternative meats. The period accounted for $23.74 billion of retail meat revenues in 2016, according to Nielsen Research, when total meat revenues were $76.43 billion.
AGENTS FOR CHANGE
Alternative meat producers are targeting millennials and Generation X, people between 18 to 50 years of age, according to Chicago-based consumer research firm Technomic. These consumers tend to care more about the food they eat and are also willing to spend more on their choice, said Michele Simon, executive director of the Plant Based Foods Association.
Nielsen data showed millennial and Gen-X households also accounted for 45 percent of the dollars spent on meat last year.
"Within the animal protein sector, plant-based meat companies are targeting the next generation that is emerging as change agents," said David Henkes of Technomic. "It's a cohort that's going to shake things up even more."
The meat substitute market could reap $5.2 billion in sales by 2020, according to Oregon-based Allied Market Research (AMR), an 8.4 percent rise from 2015. U.S. companies such as Beyond Meat and MorningStar Farms, owned by the world's largest cereal maker, Kellogg Co <K.N>, are leading the charge.
Rather than triggering a complete meat-lover conversion from traditional grilling fare, plant-based makers are looking for a fusion of both worlds.
"It's not about elbowing the burger off, it's about finding our place next to it," said Mel Cash, brand manager director at Kellogg.
Beyond Meat has persuaded retailers like Safeway and Kroger-owned stores to sell its plant-based burger patty side-by-side in the grocery aisles with real ground beef products.
Beyond Meat CEO Ethan Brown conceded there were still differences between a ground beef burger and the company's Beyond Burger product, but the company's researchers are narrowing the gap.
"It would be unrealistic to think that we can, in less than a decade, bypass the animal and perfectly build it from plants," he said.
"However, we are deeply encouraged by the scientific path we are on, and over time see no fundamental obstacle to creating meat directly from plants that rivals the choicest of cuts," said Brown.
(Reporting By Theopolis Waters; Editing by David Gregorio)