The future of meat at Tyson
Analysis of Tyson Foods’ efforts to mitigate the environmental impact of its meat supply chain
In 2006, the United Nations Food and Agriculture Organization released a report that found that the livestock sector generates more greenhouse gas emissions than the global transportation industry. The report projected that at the current pace of global economic growth, global meat production would more than double from 229 million tons/year to 465 million tons/year in 50 years. In addition to the impact of livestock on greenhouse gas emissions, the report notes that the livestock industry also accounts for “wide-scale land degradation” and is a significant contributor to “water pollution, euthropication and the denigration of coral reefs” through pollutants like waste, antibiotics, and other chemicals.
As such, global food suppliers have taken note that the production of meat in its current form is likely unsustainable over the long-run. Over the past decade, Tyson Foods, the world’s second largest processor and marketer of chicken, beef, and pork, has increased its focus on sustainability and environmental impact. Tyson’s focus on sustainability has been driven not only by its recognition of the environmental hazards associated with meat production and livestock, but also by its recognition that consumers are increasingly demanding food products that are produced in a way that minimizes impact on the environment.
Given consumer demands and the potential disruption to the meat supply chain resulting from its costly impact on the environment, Tyson has taken a number of steps to address some of the concerns outlined above. While the Company has continued to process meat, it has searched for ways to eliminate the use of certain chemicals and antibiotics that have a detrimental impact on the environment. In April 2015, the Company pledged to “eliminate the use of human antibiotics from its U.S. broiler chicken flocks by the end of September 2017.” This announcement came following the achievement of an 80 percent reduction in human antibiotic use on broiler chickens since 2011. In 2016, the Company pledged to reduce water use by 12 percent by 2020 and committed to working with its independent farmers who grow animals that the Company processes to find ways to reduce water usage. In the last year, Tyson also launched an animal well-being initiative that uses “high-touch monitoring and training to improve the care of chickens.”
In addition to taking steps to improve and optimize its existing supply chain, Tyson has begun to consider ways to address the environmental concerns related to its meat supply chain by looking at other channels for growth and innovation. In 2016, Tyson invested in Beyond Meat, a company that produces a plant-based burger with the goal of reducing consumption of animal-based products. While the investment likely does little to mitigate the challenges Tyson faces in its current business, it may indicate the beginning of a new way of thinking about tackling the challenge of sustainable meat production over the long run.
Following the investment in Beyond Meat, Tyson should take a much bolder approach to investing R&D resources into plant-based meat production, or, at the very least, into finding ways to improve meat output with lower required animal inputs. Incremental changes to mitigate the environmental impact of its current production processes are useful, but the Company is likely to face severe supply chain consequences if it does not consider more radical changes to the way it relies on livestock and animal resources. It is unrealistic to expect a shift away from animal processing overnight, but Tyson’s management team needs to act with a greater sense of urgency to get ahead of the long-term unsustainability of the use of livestock in food for a rapidly growing and increasingly prosperous population.
While efforts to improve the sustainability and environmental impact of its supply chain are laudable, does Tyson need to take bolder steps to diversify away from meat production given the environmental challenges facing its supply chain? While the Company’s recent investment in Beyond Meat indicates a strong desire to diversify away from animal-based meat and protein, can (or should) it do more to get behind similar efforts to innovate away from traditional animal-based food products? As other plant-based meat companies like Impossible Foods continue to grow at a rapid pace, what can Tyson do to ensure that its own production process remains competitive and sustainable. (709 words)
 “Livestock a major threat to the environment,” FAO Newsroom, November 29, 2006, http://www.fao.org/newsroom/en/news/2006/1000448/index.html, accessed November 2017.
 Tyson Foods, “Tyson Foods Strives to Eliminate Human Antibiotics From Broiler Chicken Flocks by 2017,” April 28, 2015, http://www.tysonfoods.com/media/news-releases/2015/04/antibiotics-announcement.aspx, accessed November 2017.
 Tyson Foods, “Water Conservation Goal Announced with Third Segment of Tyson Foods Sustainability Report,” March 31, 2016, http://www.tysonfoods.com/media/news-releases/2016/03/water-conservation-goal-announced-with-third-segment-of-tyson-foods-sustainability-report, accessed November 2017.
 Tyson Foods, “Tyson Foods Rolls Out High-Tech, High-Touch Animal Welfare Program,” June 21, 2017, http://ir.tyson.com/investor-relations/news-releases/news-releases-details/2017/Tyson-Foods-Rolls-Out-High-Tech-High-Touch-Animal-Welfare-Program/default.aspx, accessed November 2017.
 Stephanie Strom, “Tyson Foods, a Meat Leader, Invests in Protein Alternatives,” The New York Times, October 10, 2016, https://www.nytimes.com/2016/10/11/business/tyson-foods-a-meat-leader-invests-in-protein-alternatives.html, accessed November 2017.
Student comments on The future of meat at Tyson
I think a key question is around the long-term viability of top-line growth in the food industry. More efficient practices will only increase yield so much (how much waste currently exists in the process? capped at 100%), and land is a fixed input, with output per acre decreasing as we move to more sustainable processes. Then, if we assume that price increases as supply of meat decreases (augmented by increased demand levied by a larger consumer base), and only high-income consumers can afford meat, where do consumption dollars go? If plant-based substitutes are less expensive and higher-efficiency, does this mean the average share of household income spent on food decreases, implying that revenues for food producers will go down over time?
I think the biggest barrier Tyson has with the more radical approach you laid out is consumer willingness to accept meat-substitute products. To take the issue one level deeper, I would argue that most consumers are not even aware of the scale of the environmental impact that meat production has. So without full consumer awareness of the problem, Tyson has an even bigger hill to climb in encouraging a change in consumption behavior.
I also think it’s interesting to look at what other companies are doing to address this issue without turning to meat-free substitutes by adopting meat sourcing practices that are more sustainable. Take EPIC for example: they are committed to converting more ranches towards holistic land management practices. Transforming the way ranchers rotate grazing patterns among their herds can have restorative effects on grass growth, which will reduce the amount of fertilizer and chemicals they are introducing to their land as well as contribute to removing carbon dioxide from the atmosphere. Although companies like EPIC are still small, just think of the impact this type of thinking could have if adopted by larger meat producers.
This is a very interesting topic, thank you for the well written article. While it does seem that Tyson is taking steps in order to become more environmentally conscious and socially responsible (reducing water usage, investing in meat alternatives, etc.), I have to wonder how much of this can be considered “greenwashing” as a reaction to larger societal trends. I am in agreement that I would like to see bolder commitments from Tyson and other food manufacturers, especially with respect to greenhouse gas emissions – an area where Tyson likely has a significant negative impact, but does not seem to have a set target or goal. One additional question that this raises for me is the responsibility Tyson has to its shareholders versus society as a whole. For example, if Tyson shifted its portfolio to more sustainable plant-based products with significantly fewer environmental impacts but the change resulted in lower sales, will the market ever value this as a favorable trade-off?