Plant-Based Meat Will Be Cheaper Than Animal Meat Sooner Than You Think

The cost of plant-based meat is projected to reach parity with conventional animal meat by 2023, according to new information from the nonprofit Good Food Institute (GFI). Achieving price parity is vital to widespread adoption because consumers are more likely to try a new plant-based option that isn’t much more expensive than its animal-based counterpart.

In a recent study conducted by GFI with consumer research firm Mindlab that investigated price as a driver of purchase intent, consumers ranked price as the second most important factor (after taste) when purchasing a food product. of plants. Although plant-based meat retail sales grew 45% in 2020, on average, Neilson data shows that plant-based meat per pound is now twice as expensive as conventional beef, three times as expensive as pork and four times more expensive than chicken. For most consumers, closing the price gap would likely increase purchase intent for plant-based products.

To get to price parity, plant-based foods have some looming hurdles. The animal agriculture industry has been able to keep costs down because it has been slaughtering animals for food for decades on a large scale with the help of government subsidies. However, the plant-based sector is newer and has yet to achieve the same economies of scale.

“Achieving price parity comes down to scale,” Emma Ignaszewski, Corporate Engagement Project Manager at GFI, told VegNews. “Making the plant-based meat supply chain more efficient and risk-resilient can result in lower costs for the manufacturer and ultimately more affordable for the consumer.”

2032: The end of animal meat?

A 2021 report from investment firm Blue Horizon and business consultancy BCG also notes that the key to consumer acceptance is price parity. The report notes that alternative proteins should taste and feel just as good as the conventional foods they replace and cost the same or less. According to his research, price parity will occur in three key stages.

First, plant-based products such as burgers, dairy products and egg substitutes made with soy, peas and other plant-based proteins will reach price parity in 2023. By 2025, alternative proteins made from microorganisms like fungi, yeasts and single origin proteins cellular algae will achieve parity. And finally, proteins grown directly from animal cells (often called “cell-based meat” or “cultured meat”) will reach price parity by 2032.

GFI’s own research suggests that cultured meat could become cost-competitive with some conventional animal meats as early as 2030, when cultured meat is projected to reach a production cost of $2.92 per pound.

“None of this can happen unless consumers are happy with the taste of plant-based meat products. It doesn’t help to expand something that consumers won’t buy,” Ignaszewski said. “So above all, companies have to make plant-based products that come ever closer to tasting as good as or better than conventional meat. Scaling a plant-based product that tastes like conventional meat, or better, to the point where it also hits price parity is a golden formula.”

Why is the cost of animal meat increasing?

According to GFI, progress in price parity for plant-based meat is not only affected by production costs, but also by market effects that drive up the cost of traditional animal meat products. Recent developments in animal agriculture, such as higher input costs, meatpacker labor problems, and supply chain disruptions, have affected the price of animal meat. In the fall of 2021, conventional meat categories such as beef, chicken and pork saw double-digit price increases compared to the same week in 2020. Plant-based meat prices compared to the previous year decreased or remained the same.

Additional supply chain disruptions occurred at the beginning of the COVID-19 pandemic, when slaughterhouses and meat processing plants across the country were forced to close due to COVID-19 buds among workers, creating delays in the meat supply chain.

Shoulder-to-shoulder working conditions in slaughterhouses mean workers are at higher risk of becoming infected.

“Disruptions like this and the resulting price increases in conventional categories go hand in hand with production inefficiencies in the conventional meat supply chain,” GFI said in its report.

Plant-based meat approaches parity

In recent years, major brands and private labels have already tried to undervalue animal meat to further drive demand for plant-based products. In 2020, trader joe launched its plant-based burgers made with pea protein, priced at $4.49 for two quarter-pound patties. Also in 2020, Kroger launched its plant-based ground chicken priced at $6.99 per one-pound package.

Last year, plant-based brand impossible foods announced its second price reduction in a year for its plant-based ground beef, lowering the suggested retail price to $9.32 per pound, a 20 percent drop. And competitor Beyond Meat has also said it aims to cut the price of animal protein in at least one category by the end of 2024.

For more information on vegan meat, read:
Why the best new meat products will come from Korea
Will vegan meat replace animal meat? This is what the CEO of Beyond Meat has to say.
The USDA Just Spent $10 Million on Lab-Grown Meat