One of the biggest reasons people won’t try plant-based meat substitutes is the price. But as the cost of beef and pork has steadily increased in recent months and the price of alternative meat products made from pea protein and other plant-based ingredients is expected to decline, the price gap should be cleared by 2023.
The gap is still wide so far, at $3.95 for a pound of beef and $7.79 for a pound of Beyond Meat, but a new report from the Good Food Institute (GFI) has found that parity prices could happen much sooner than expected. Their calculation shows that the price of plant-based meat is expected to fall below that of conventional meat in 2023, giving customers the option of affordable protein alternatives.
The nonprofit conducted the study alongside consumer research firm Mindlab to examine consumer motivators for plant-based meat. While taste is still the most important factor for consumers, the study found price to be a close second. Plant-based meat is becoming more mainstream, but the researchers noted that to achieve widespread acceptance and demand, price parity is essential for the alternative protein market.
“We anticipate this gap [in price] declines as plant-based producers increasingly scale up production, achieve economies of scale, and seek price parity with their conventional competitors,” the report found. “Indeed, the price difference is smaller for more developed categories such as milk and butter.
Recent data from Neilson reveals that, to date, plant-based meat is about twice as expensive as conventional beef, three times as expensive as pork and four times as expensive as chicken. Thus, for many consumers, the purchase of plant-based meat is still a difficult exercise when it comes to allocating their family food budget. The study points out that by closing the price gap, the plant-based meat industry will open up to new consumers. The authors of the study postulate that when production becomes more efficient and meat prices continue at inflationary rates, prices could reach parity within a year.
“Achieving price parity is a matter of scale,” said Emma Ignaszewski, corporate engagement project manager at GFI. VegNews. “Making the plant-based meat supply chain more efficient and risk-resistant can lead to lower costs for the manufacturer and ultimately greater accessibility for the consumer.”
Plant-based meat is gaining popularity
Plant-based proteins are becoming popular around the world, appearing in retail and foodservice distributors more often than ever. Vegan meat is appearing on restaurant menus 1,320% more since the start of the pandemic. The accelerated growth of the plant-based meat industry will allow vegan brands to increase their production. By maximizing production capacities, plant-based companies will begin to truly compete with the bigger giants of animal agriculture.
The Good Food Institute report also mentions another study conducted by investment firm Blue Horizon and business consultants BCG. This 2021 report found that price parity would be the most effective method of reducing animal meat sales around the world. While consumers are driven by sustainability and health benefits to try plant-based foods, price discrepancies are a significant deterrent. The report predicts that by 2032, enough meat and dairy alternatives will exist to eclipse the animal agriculture sector for market share.
The BCG report predicts that plant-based proteins from soy, peas and other sources may first reach parity in 2023, but other alternatives to meat will follow closely. The report notes that price parity will occur for protein substitutes made from microorganisms such as yeasts, single-celled algae and fungi in the next phase of growth for these products. Cultured, lab-grown meat could potentially reach price parity within a decade. By making the three alternative products – pea protein, new microprotein and possibly cultured meat – more affordable options, consumers will come to view meat and dairy as prohibitively expensive, at which point they could become obsolete or at least a luxury. rare for a significant number of consumers.
“None of this can happen if consumers are unhappy with the taste of plant-based meat products. It doesn’t help increase something consumers won’t buy,” Ignaszewski said. “So companies must first and foremost make plant-based products that come closer and closer to tasting the same or better than conventional meat. Scaling a plant-based product that tastes the same as conventional meat – or better – to the point that it also achieves price parity is a golden formula.
Are vegetables really cheaper?
Plant-based meat options have rapidly become more affordable over the past decade. Last year, when chicken prices began to soar, plant-based company Alpha Foods realized the potential of cheaper meat alternatives. Calling the outbreak ‘chicken flation’, the vegan brand has promised to cut the cost of its own products with every penny the price of conventional chicken increases. Companies in the plant-based sector have worked to make products available to the public, and now, plant-based meat will soon be achievable on a budget.
Despite the room for improvement regarding plant-based meat, vegan diets are still remarkably cheaper for consumers than a high-meat diet. People can save up to nearly 30% on food by adopting a plant-based diet. By increasing the consumption of vegetables and fruits, people reduce unnecessary dairy and meat products that drive up grocery costs.
A report by researchers from Deakin University’s School of Exercise and Nutrition Sciences concluded that people can save $1,260 per year by adopting a plant-based diet. Soon, people looking to save money won’t have anything to deter them from buying plant-based protein, because by next year, plant-based food will be more affordable across all categories.