Liz Specht Ph.D. — a senior scientist at the Good Food Institute (GFI) — says vegan meat products are about to come down in price.
The vegan meat market is booming. As consumer attitudes change, supermarkets, fast-food chains, pubs, restaurants, and even fish and chip shops are jumping on the vegan wagon. But there seems to be a catch that comes with eating vegan meat products — especially if you buy them straight from the store — in many instances, they’re more expensive.
It’s a fact that cannot (and should not) be ignored, but is it one that is going to change anytime soon? Many think it is. According to Liz Specht Ph.D., a senior scientist at the Good Food Institute (GFI), price parity with vegan meat and its animal-based counterpart is just around the corner.
“Industrial animal agriculture has been operating and optimizing at a global scale for decades,” she explained in a post on GFI’s website. “Yet it is still inherently more efficient to make meat directly from plants rather than feeding our crops to animals and then eating a part of the animal.” She added, “It’s all but inevitable that the plant-based meat industry will eventually be cost-competitive with conventional meat.”
Why Is Vegan Meat Currently More Expensive?
According to Specht, vegan meat is currently more expensive for a number of reasons. It’s partly due to the fact that brands are operating in a “free market.” They must maximize their profit, and this means charging consumers more.
“Companies like Beyond Meat and Impossible Foods are currently producing as much as they can and are still unable to meet demand,” writes Specht. “There is no reason for them to charge less than consumers will pay at this time — moving down the supply/demand curve would not allow them to sell more products.”
She continues, “Lowering prices would just lower their revenue, which would, in turn, hurt their ability to scale and meet demand.”
Another reason is that while the vegan meat market is growing at a rapid rate, currently, it remains small. This means that brands have a harder time negotiating prices for their ingredients — such as soybeans or peas. The market is also currently at a place where it lacks the same infrastructure as animal agriculture. “The current scale of plant-based meat companies also limits their manufacturing facility design, equipment, and other technologies,” notes Specht.
“Even the largest plant-based meat production facilities look like boutique operations compared to the scale of manufacturing facilities for conventional meat products and other common food products,” she adds.
When vegan meat brands have a bigger share of the overall meat market, production methods will evolve, explains Specht, increasing efficiency and inevitably reducing cost.
One of the other factors to consider when looking at the price of vegan meat products is the cost of research and development. UK veggie and vegan meat brand Quorn, for example, recently invested £7 million into researching and developing its own “bleeding” plant-based burger.
As smaller brands find their feet and “secure their market position,” less money will be poured into this research and development, says Specht.
How Long Until Vegan Meat Falls In Price?
Vegan meat could fall in price pretty soon.
The market is consistently growing. It’s currently worth around $1 billion, but this is expected to increase by 4,000 percent in the next decade, potentially reaching a worth of more than $40 billion.
The growth could be partly due to Beyond Meat’s recent IPO. The California-based brand — responsible for the “bleeding” Beyond Burger — went public in May. It was the first-ever company of its kind to do so. Initially, the IPO was priced at $25 a share, but this rose to $65 at the end of the first day. Stocks are now valued at around $99.
Primary competitor Impossible Foods has also seen huge success in recent months. It partnered with fast-food giant Burger King to launch the Impossible Whopper — a vegan meat version of the chain’s signature beef-filled Whopper sandwich. The vegan trial — conducted in 59 locations in Missouri — went “exceedingly well,” and the burger is now being rolled out across the U.S.
“[The] tipping point may hit relatively soon,” notes Specht. “Given the recent flurry of activity reflecting new production capacity among the existing plant-based meat companies and the involvement of new entrants with massive resources.”
The market is growing so quickly that existing major companies want in, like meat giant Tyson Foods and multinational corporation Nestlé. The latter has already rolled out the plant-based Incredible Burger across Europe, which features on McDonald’s menus in Germany and Israel. It also intends to roll out the similar Awesome Burger in the U.S. in the fall, under its Sweet Earth brand.
Tyson Foods — the world’s second largest processor and marketer of chicken, beef, and pork — announced earlier this year it will be joining the vegan meat market this summer.
Specht adds, “once plant-based achieves sufficient market penetration to tap into these emerging opportunities to optimize raw materials and make production more efficient, the industry will enter a bright new era of accessibility and affordability that will benefit both consumers and producers.”
Could Anything Stifle The Growth Of The Vegan Meat Market?
Some have criticized the vegan meat market. In Mississipi, plant-based foods that emulate meat cannot be labeled as meat or a meat-based product on the packaging. So, brands cannot market soy or pea protein-based products, for example, as “meatless meatballs” or “vegetarian bacon.” The reason for the law is that some members of the meat industry believe that consumers will be misled by this use of terminology.
But many vegan organizations and brands — such as the Plant Based Foods Association (PBFA) and Upton’s Naturals, which are suing the state of Mississipi over the law — maintain that using this sort of language helps consumers understand what the product will taste like.
“People are not confused by terms like ‘veggie burger’ or ‘vegan hot dog,’” said Justin Pearson, a managing attorney at the Institute of Justice, in a statement. The institute is backing the PBFA and Upton’s Naturals lawsuit. He continued, “To the contrary, those terms tell consumers that they are buying exactly what they want: a plant-based alternative to animal meat.”
Daniel Staackmaan — the founder of Upton’s Naturals — added, “Mississippi’s law is not about clearing up consumer confusion, it’s about stifling competition and putting plant-based companies at a disadvantage in the marketplace.”
The Future Is Innovation
Despite challenges from the meat industry, it’s unlikely the vegan meat market will slow down anytime soon. The food industry is innovating, just like the tech industry has and continues to do, says GFI on its website.
“Unlike at any other moment in history, we now have the ability to blend imagination with design to improve the world around us,” notes the organization. “An array of inventions has improved lives for billions of people across the globe. Smartphones allow farmers and textile workers in the developing world to start small businesses and move out of desperate poverty.”
“Modern air travel and the internet have made travel and information more accessible than previous generations could have even imagined,” it continues. “Now, that same spirit of innovation is coming to our dinner plates. Just as modern automobiles replaced the horse and buggy, better alternatives will replace conventional animal agriculture.”
As it stands, animal agriculture brings with it a wealth of environmental problems. Last year, the United Nations labeled tackling meat consumption as one of the world’s biggest problems. It also jointly honored Beyond Meat and Impossible Foods with the Champion of the Earth award.
“Our use of animals as a food-production technology has brought us to the verge of catastrophe,” said the UN Environment in a press release at the time. “The destructive impact of animal agriculture on our environment far exceeds that of any other technology on Earth.”
“The global community can eliminate the need for animals in the food system by shifting the protein at the center of the plate to plant-based meat,” it continued. “For their pioneering work towards reducing our dependence on animal-based foods, Ethan Brown [CEO of Beyond Meat] and O’Reilly Brown [CEO of Impossible Foods] have been selected 2018 Champions of the Earth in the category or science and innovation.”
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