THE PRICE OF SILENCE: The battle to achieve price parity with real meat
Many plant-based meat companies are new and haven’t had the years of production (and government subsidies) under their belt to match the levels of animal meat manufacturers.
MIKAELA COHEN: The popularity of plant-based meat products from companies such as Beyond Meat and Impossible Foods has skyrocketed in recent years, aided by availability everywhere from supermarkets to Burger King and Starbucks… That has helped the plant-based meat industry boom. Grocery sales of plant-based foods that directly replace animal products have grown 27% in the past year, now exceeding $7 billion in sales, according to the Global Food Institute.
In total, the global market for meat substitutes is set to grow to $23.4 billion by 2024, according to market research company Euromonitor. However, one of the biggest deal breakers for potential consumers of plant-based meat is the higher price compared with actual meat.
At major retailers that sell the products, such as Kroger and Walmart, you can buy two Beyond Meat plant-based hamburger patties for $5.99, whereas at the same stores, you can likely get two pounds of ground beef for around the same price and end up with more hamburger patties than plant-based patties. To make a further dent in the more than $100 billion U.S. meat industry, alternative meat will need to address that price parity…
Big meat manufacturers have been producing animal meat products for years at a large scale and keeping prices low. Plant-based companies don’t have the same economies of scale… Many plant-based meat companies are new and haven’t had the years of production [and government subsidies] under their belt to match the levels of animal meat manufacturers…
While animal meat currently costs less for consumers than the alternative options, experts say this might not always be the case… As Beyond Meat and Impossible Foods expand their products from beef to chicken and into other animal meat alternatives, and with new companies entering the market, what can companies do to bring their prices down for customers, ultimately leading to price parity with the animal meat products?
“We’ve lowered our retail prices and our food service prices twice in the last 18 to 20 months, each time by 15% to 20%, so pretty meaningful price drops,” said Dennis Woodside, president of Impossible Foods. “Currently, our product on shelf is priced a little higher than organic grass-fed beef, so that’s still a premium price, and we know we need to get that down over time”…
One of the ways the price of plant-based meat products can go down is if the price of the ingredients goes down. Because peas are one of the main ingredients, Barroso said, there is a growing push to plant hundreds of acres of peas across Canada and other parts of the world. He predicted that with these initiatives, a price parity can be seen around five years from now…
“We will be able to price at the same level or lower than the cow. Our entire production process starts with plants — we turn it into meat without using the cow as the middleman,” Woodside said. “Our ingredients require a small fraction of water, small fraction of the land and energy than it takes to raise a cow”… If animal meat manufacturers enter the plant-based meat market, this could drive down the price of these products. SOURCE…
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