Meat Industry Hires Robots
This week, we talk about how the coronavirus pandemic has spurred meatpackers to explore robots.
Welcome to our weekly chat about the environmental and social issues that influence the way we work, spend our money and live our lives. We're your hosts, Maitane Sardon and Dieter Holger. Want to get our newsletter every Wednesday? Hit the subscribe button in the upper right corner and please share with your friends!
Hi, Maitane! Did you see that the coronavirus pandemic is speeding up the adoption of robots by meatpackers? Tyson Foods, one of the largest meat producers in the U.S., has a team of engineers, designers and scientists developing a robotic butcher at its Arkansas Manufacturing Automation Center.
Yes! Workers in the meat industry, many of whom are immigrants, have been hit hard by the coronavirus. Workers at meat and poultry processing facilities have to stand right next to each other to do their job and many also share transport to and from the job. This increases their chances of catching the virus, which can survive in cold and damp areas.
Not to mention that there have been outbreaks at meat processing sites across the world. In the U.S., the Centers for Disease Control says that more than 16,000 workers in meat and poultry factories got infected with Covid-19 in April and May. That’s why meatpackers have spent hundreds of millions of dollars to buy safety equipment for their workers. They say robots are a long term solution to health and safety concerns and want to use them for more labor-intensive and dangerous tasks such as deboning livestock and slicing up chickens.
But what will happen to human meat-cutters? Are they at risk of losing their jobs?
Meatpackers have admitted robots can’t yet match a person’s butchering skill. Dean Banks, the president of Tyson Foods, says workers won’t get replaced by robots anytime soon and that those who are can move to other positions at the company.
Speaking of meat, plant-based options are gaining popularity among investors and consumers because they are viewed as healthier and have a lower environmental impact. Swiss bank UBS says the market for plant-based meat substitutes could reach $50 billion by 2025. The stock of Beyond Meat, a producer of vegan burgers and sausages, has had incredible gains since the company went public. The company priced its IPO at $25 a share in May last year and its stock has skyrocketed to more than $125 a share since then. Lots of other companies offer plant-based substitutes as well, including Conagra, Kellogg, Nestle, Danone, Unilever, Nomad Foods and Kraft Heinz. Tyson also has its own plant-based brand called Raised & Rooted.
What am I looking at? The chart above shows the stock performance of plant-based food maker Beyond Meat since it went public in May last year.
This is one of the hottest trends in food, and we will keep our eyes on it. Anything else on your mind, Maitane?
Yes. Once again this year we are seeing banks put aside billions of dollars to cover losses on loans for people who can’t make their payments because of the virus. Three of the biggest banks, JPMorgan, Citigroup and Wells Fargo, have collectively stockpiled $28 billion in the latest quarter to cover defaults from consumers and businesses. That marks a sharp increase from this year’s earlier quarter. For example, JPMorgan set aside $10.47 billion in the second quarter, up from above 8 billion in the first quarter. As a result, profits have taken a hit.
It’s a troubling sign. Now, let’s open it up to our readers: What do you think about companies using robots to protect their workers from the coronavirus? Share your thoughts below or catch us on Twitter. Your words could appear in our next edition! Have a great weekend and remember to wash your hands. 👋
Meet the team:
Elevate the Conversation is produced by the editorial teams of The Wall Street Journal and Dow Jones Newswires. Here's a little bit more about us, along with our contact information. We'd love to hear from you.
Dieter Holger, Reporter: I have a knack for uncovering values-based investing trends and I’m obsessed with spreadsheets and charts. I really enjoy ‘80s music, skateboarding and yoga (but I’m bad at both). dieter.holger@wsj.com @dieterholger
Maitane Sardon, Reporter: I have a passion for amplifying the voices of those at the center of stories. I love running on Barcelona’s beaches and binging on chocolate ice-cream to compensate (it’s all about balance). maitane.sardon@wsj.com @sardomaitane
Catherine Lindsay, Editor: I like breaking down complex ideas and explaining them. On the weekend, you’ll find me wandering the city with my film camera at the ready. catherine.lindsay@wsj.com @CathsLindsay
Tammy Lian, Designer: As a visual producer, I'm always excited by the challenge of creative problem solving. In my spare time, you can usually find me taking care of my ever-growing collection of plants and drinking tea. tammy.lian@wsj.com @violian.tammy