Tyson Foods, $TSN, making its first foray into the insect-protein industry as the meat giant seeks to diversify its operations, per Bloomberg.
Tyson Foods Inc., the prominent American meatpacker, is venturing into the insect-protein industry, marking its first involvement in this sector as part of its strategy to diversify its operations.
In its announcement on Tuesday, Tyson Foods revealed its agreement to acquire a stake in Protix BV, a company based in Dongen, Netherlands, with the objective of supporting Protix's expansion plans. Additionally, the two companies will establish a joint venture focused on constructing and operating a facility in the United States designed for the production of insect-based meal and oil. These products are typically utilized in fish feed and dog food. However, specific financial details of the transaction were not disclosed.
Several major players in the food industry, including Cargill Inc. and Archer-Daniels-Midland Co., are increasingly exploring insect-based protein as a more environmentally sustainable option, with insects such as the black soldier flies cultivated by Protix being considered a lower-carbon source of protein.
For Tyson, which is headquartered in Springdale, Arkansas, and produces approximately 20% of the beef, chicken, and pork consumed in the United States, this move represents both a novel avenue for diversification and a new source of feedstock for the vast number of chickens and hogs it raises annually.
According to Tyson's Chief Financial Officer, John Tyson, "It’s a multibillion-dollar industry opportunity that has tremendous growth potential, and we see Protix as being a leader there. In the long run, insect-protein inclusion in animal-feed diets can be a real thing that exists and can be one that is good for people, planet and animals."
For Protix, established in 2009 and backed by investors like Aqua-Spark Management BV and the private equity arm of Cooperatieve Rabobank UA, the partnership with Tyson represents a significant opportunity to expedite its expansion efforts. The company supplies insect-based protein to pet-food manufacturers, including Nestle SA and Mars Inc.
Kees Aarts, founder and CEO of Protix, emphasized the strategic importance of this collaboration, stating, "It is definitely a huge way to establish ourselves into an international context. This was really the tipping point we have been working for."
The new US plant, although not yet having a designated location and not expected to be operational before 2025, is anticipated to be up to four times larger than Protix's existing facility in the Netherlands. This facility will encompass all aspects of bug-protein production, from insect larvae breeding to incubation and hatching. Waste generated by Tyson's meatpacking operations will be repurposed to feed the insects.
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