Plant-based meats have been all the rage in recent years, and their popularity is only growing. Beyond Meat and Impossible Food‘s products can be found at just about any grocery store, from Walmart to Whole Foods. And plant-based options are taking over restaurant menus from fine dining establishments to fast-food chains as business owners are waking up to the demand for vegan and vegetarian food options.
The two main criteria most people are looking for in their decision to try a plant-based product are taste and price…in that order. If a person knows a particular food tastes delicious, they are more likely to pay more for the product. But when trying something new, a higher price is a potential deterrent.
THE FUTURE IS VEGAN
According to Good Food Institute (GFI), “a nonprofit working internationally to accelerate alternative protein innovation,” plant-based meat and animal meat are expected to be much closer in price by 2023. With plant-based prices falling and meat prices rising, they will likely meet somewhere in the middle. Competitive pricing is an essential step for plant-based meat to continue to grow in the mainstream.
Plant-based meat prices are currently more than double the price of traditional animal meat in many instances. A pound of plant-based meat is estimated to cost twice as much as a pound of beef, three times more than pork, and four times more than chicken. This disparity has created an uphill battle for plant-based meat, but it has fought valiantly, with sales growing by 45 percent in 2020 alone. Closing the price gap makes consumers more likely to select a plant-based option.
BREAKING THROUGH ANIMAL AG
With the help of government subsidies, the animal agriculture industry has been slaughtering animals on a large scale for decades. The subsidies given to the meat industry and sheer scale of the industry enable it to keep its prices low. Plant-based products aren’t produced as massive of a scale yet, because they are so new.
“Reaching price parity comes down to scale,” says Emma Ignaszewski, Corporate Engagement Project Manager at Good Food Institute. “Making the plant-based meat supply chain more efficient and more resilient to risks can result in lower costs for the manufacturer—and ultimately, more affordability for the consumer.”
THREE STAGES TO PARITY
In Stage 1, products made from soy, peas, and other plant-based proteins are projected to cost the same as their meat counterparts by 2023.
Stage 2 projects that plant-based meats like Quorn that are made from microorganisms such as yeast, fungi, and single-celled algae will reach equal cost by 2025.
And Stage 3 projects that meat substitutes that are derived from animal cells will reach equal costs with animal-based proteins by 2032.
“GFI’s own research suggests that cultured meat could become cost competitive with some conventional animal meats as early as 2030, when cultivated meat is projected to reach a production cost of $2.92 per pound.”
ANIMAL MEAT PRICES ARE RISING
Production costs and market effects directly influence the price of traditional animal meat products. Labor issues and supply chain interruptions have contributed significantly to rising prices over the last few years. In addition, Covid-19 outbreaks caused numerous meat-processing plants and slaughterhouses to close down, further slowing supply chains.
“Interruptions like this and the resultant price hikes of conventional categories go hand-in-hand with the production inefficiencies of the conventional meat supply chain.”
AFFORDABLE PLANT-BASED MEAT IS COMING
Many major plant-based meat brands have already made efforts to under-price animal meat. Price reductions have a great potential to increase demand for plant-based products.
In 2021, animal-based meat prices rose by double digits, whereas plant-based meat prices remained steady or decreased compared to the previous year.
As the demand for plant-based meat grows, prices will continue to fall. The future of plant-based foods is limitless, and it’s so exciting to think about what the future will bring.