Photo: Beyond Meat's plant-based burger.

Poultry giant Tyson Foods has parted ways with plant-based protein company Beyond Meat, Axios reported this morning in its newsletter. This news comes just days before the El Segundo, California-based startup is expected to go public with a valuation of up to $1.2 billion.

Tyson had a 6.5% ownership stake in Beyond and had invested a total of $23 million in the company between 2016 and 2017. Axios discovered the break when it noticed that Tyson was listed on Beyond’s April 15 amended regulatory filing, but not in one on April 22.

And things started off so well! We were fascinated to see Tyson, the second-largest meat processing company in the world, invest so heavily in Beyond, a company out to disrupt the industrial meat industry altogether. As Tom Mastrobuoni, CFO of Tyson Ventures, pointed out onstage during our Smart Kitchen Summit Europe last year, they’re very aware of that. “We’re onto disruption now,” he told the audience. “The startups that we’re focusing on are, in some ways, out to get us.”

The meat giant seemed fine with that initially, but things must have shifted at some point. Likely after Tyson announced in February that it would be developing its own line of plant-based protein products, which it plans to have in retail by this summer (see statement below). It makes sense that Tyson wouldn’t want to compete directly with one of its portfolio companies in the B2C alternative protein market, and vice-versa.

We don’t know if Tyson had already decided to develop its own line of plant-based products before it invested in Beyond. Otherwise, maybe they saw the numbers and realized the potential of the protein market, then decided to jump in themselves.

If the latter, it’s no wonder that Beyond Meat got a bee in their bonnet. As we mentioned Tyson is the second largest meat processor in the world. They have an incredible amount of capital, manufacturing abilities, R&D teams, and retail partnerships in place that will let them scale their plant-based protein business quickly. It’s easy to see why Beyond Meat wouldn’t like the idea of having such a giant, well-financed competitor in the meat aisle.

A rep from Tyson sent us the following statement (the same one it shared with Axios):

Tyson Ventures is pleased with the investment in Beyond Meat and has decided the time is right to exit its investment. Beyond Meat provided an early opportunity for Tyson Ventures to invest in plant-based protein products that many consumers are seeking. We wish the leadership of Beyond Meat all the best.

Tyson Foods continues to be committed to providing alternative protein as a choice for consumers and recently announced the creation of a new business focused on combining our creativity, scale and resources to make great tasting protein alternatives more accessible for everyone. We plan to launch an alternative protein product soon with market testing anticipated this summer.

According to Axios, there were multiple buyers for Tyson’s stake in Beyond Meat as no new 5% shareholder was listed in the new statement.

Other Big Food companies have also been investing in plant-based protein. However, instead of buying stakes in prominent startups like Beyond Meat, they’re chiefly acquiring smaller vegan companies (Unilever, Maple Leaf Foods) or developing their own products (Nestlé). Maybe Tyson tried to take over Beyond Meat and were rebuffed, then decided to change course and make their own line of plant-based proteins.

Beyond isn’t Tyson’s only venture into the alternative protein space. The poultry giant has also invested in cell-based meat company Memphis Meats as well as Future Meats, a biotech company creating animal-free fat and muscle cells. Though cultured meat is still a ways away from entering your grocery store, it’ll be interesting to see how Big Food companies like Tyson react once they do get to market — and if they’ll be friend or foe.

It’s also worth asking if the break from Tyson will impact Beyond’s IPO, which is set for just days from now. Potential investors might be more wary to buy stock in a company that was backed by a giant like Tyson, but no longer. Then again, I don’t think this will have too much of an effect. People are still ravenous for plant-based protein, and interested parties attracted by Beyond’s inspiring message or growing revenues will likely still buy shares in the company, regardless of any Tyson drama.

We’ve reached out to Beyond and Tyson for comment and will update this post when we hear back.

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