The disruption of the global meat supply chain, which started a couple of weeks ago in the US with the Covid-related closure of meat processing facilities, intensified in recent days. Over the weekend, China’s customs suspended imports of poultry products from a Tyson meatpacking facility which was a coronavirus cluster.
This move followed the discovery of coronavirus on chopping boards used to cut salmon in a wet market in Beijing and China’s suspension of pork products from German company Toennies, where more than 700 out of 1,100 workers had tested positive.
The fast spread of Covid in meat processing facilities finds its source in two main factors: the virus is believed to thrive in a cold and indoor environment and meatpacking staff is working in close proximity.
As of now, food agencies and scientists across the world estimate it “very unlikely” to catch coronavirus from food or food packaging. But public perception of meat safety could clearly be shaken should headlines about Covid and meat keep popping up or should scientists finally find that Covid can spread from food.
Against this backdrop, food safety and traceability are of utter importance and it’s no surprise that Chinese authorities have started testing all imported meat shipments and are also checking products at domestic markets in major cities. Such initiatives could well expand to the US and Europe, boosting demand for testing services, instruments, reagents and tracking technology. Food safety and traceability account for close to 20% of our portfolio.
Another potential consequence of these rising concerns about meat safety is a continued or accelerated consumer shift towards plant-based meat at the expense of traditional meat. Indeed, plant proteins come with two major positives: they are perceived as natural and healthy and they are manufactured in highly automated factories with limited manual intervention, hence reducing the risk of a coronavirus outbreak.
Also, it’s worth noting that the meat supply chain disruption is pushing up prices of traditional meat and then making the price of plant-based meat (most of the time 30-40% more expensive) more competitive. Interestingly, Beyond Meat (our largest portfolio position) just announced a value pack in the US that further reduces the price differential ($1.60 per patty or $6.40 per pound vs. $5.26 per pound for traditional beef patties) and makes plant proteins an even more compelling proposition for consumers.
In all, this potential meat crisis should put the spotlight on plant proteins and food safety and traceability which account for a significant part of our portfolio.
Launched just two weeks ago, our Food Revolution certificate is off to a solid start, outperforming all major indices by a wide margin (+5% vs. MSCI World).