The consumer backlash against a meat product made from leftovers and treated with chemicals is making a bad situation worse for Cargill Inc. and Tyson Foods Inc. (TSN) ahead of the beef industry’s peak sales period.
Kroger Co. (KR), the largest U.S. grocery-store chain, last month stopped buying ground beef containing what processors call lean, finely textured beef, while Wal-Mart Stores Inc. (WMT) said it would offer customers meat without the additive.
Lower demand for the product — dubbed “pink slime” by critics — has prompted Cargill, the biggest U.S. beef processor, to scale back output of the lean meat at four plants. Tyson says beef supply will decline. The companies, already dealing with higher cattle costs, may start labeling ground beef with the product as the industry tries to win back shoppers’s confidence ahead of the U.S. summer grilling season.
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