The plant-based protein industry will eat into consumer demand for meat as the rapidly growing sector expands, Cargill Inc Chief Executive Officer David MacLennan said on Friday.
“Our analysis is that in … three to four years plant-based will be perhaps 10 per cent of the market. We’re a large beef producer and that is a big part of our portfolio. So there’s some cannibalization that will occur,” MacLennan said at a National Grain and Feed Association convention.
Privately held Cargill is a supplier of pea protein to meat alternative company Beyond Meat Inc through its joint venture with PURIS Foods.
MacLennan, since taking over as chief executive in 2013, has sold under-performing businesses and bet heavily on demand for protein, including beef, chicken and fish.
Cargill is also a large beef processor, particularly in the US, where it ranks among the biggest. During the early days of the Covid-19 pandemic, many American beef processors closed their slaughter houses as the virus infected hundreds of workers. That allowed the few companies such as Cargill that managed to keep their plants open to profit from extraordinary margins.
The company made almost $4.3 billion in net income during the first nine months of its fiscal year, according to data released by the trading house to tap the bond market. That figure already surpasses its best ever total annual profit.
Surging demand for meat, corn and soybeans has sent agricultural markets skyrocketing, sparking a bonanza for commodity producers and traders. While that means soaring profits for the likes of Cargill and its rivals, it also stokes the prospect of worsening food inflation at a time when supply chains are seizing up and the world is grappling with a hunger crisis.
With some 155,000 employees across 70 countries, Cargill is the “C” in the vaunted ABCD group of merchant companies that have dominated grain trading for a century. Archer-Daniels-Midland Co. is the “A,” Bunge Ltd. is the “B,” and Louis Dreyfus Co. is the “D.”