In recent years, meatless meat products have taken off among consumers. But the meatless meat market still represents only about 1% of the meat market. One of the main reasons: Vegetable meat products are considerably more expensive.
There are signs, however, that this is changing. Impossible Foods products on supermarket shelves are expected to be about 20% cheaper in the coming weeks, the company announced Tuesday morning. The company will suggest to retailers that prices drop to $ 5.49 (from $ 6.99) for a two-burger package and $ 6.99 (from $ 8.99) for a 12-ounce package. . pack of ground beef impossible in the US (actual prices vary by location and retailer).
The announcement follows a similar price cut, Impossible Foods made for restaurant distributors earlier this year, and is the latest attempt by vegetable-based meat manufacturers to cut the great price advantage of meat.
The pandemic just underscored the importance of reducing that price advantage and making meat without meat a common alternative to meat from industrial farms. Slaughterhouses, long known for their poor working conditions, have been the focus of the coronavirus, in some cases because they responded to the coronavirus crisis by telling employees not to take sick leave for any reason. And then there are the larger-scale problems that the pandemic has reminded the world of: It is a danger to public health to raise animals for food in overcrowded conditions that can incubate and spread disease quickly, and our farming practices are at risk of starting the next pandemic. global.
Faced with these problems, consumers have shown greater interest in herbal offerings. More and more traditional food companies launch vegetable-based meat brands, more and more fast food restaurants and casual dinners add menu options, and the main players in the sector raise a lot of money.
Having won the first battle – making consumers interested enough to try vegetable-based foods and investors interested enough to finance them – vegetable-based meat companies are turning their eyes to a greater challenge : make vegetable products as cheap as animal meat products are. The vegetable-based meat industry has to be bigger to compete with animal products in price – and competing in price is a key component to growing as an industry.
Half a kilo of industrially created hamburgers at Walmart near me costs just $ 2.80 / pound. To give each person access to plant-based alternatives and a meaningful transition from industrial agriculture, plant-based alternatives must be just as cheap – without cutting any of the same corners.
Vegetable meat is still a long way from the very low prices of animal meat. But the 20% cut in the price of Impossible Food is yet another step towards making vegetable meat a reliable alternative to industrially raised animal meat.
Why is meat so cheap?
Meat in America is shockingly cheap and unprecedented.
The average price for a meat alternative sold at a grocery store in the United States last year was $ 9.87 / pound. The average price of beef? $ 4.82 / pound. Chicken is even cheaper at $ 2.33 / pound.
This is a big difference and can help a lot to explain why even with the increase in consumer interest and the flavor profile of vegetable meats getting closer and closer to the flavor profile of animal meats, vegetable meats still represent only a small sales share.
“The animal industry has streamlined its processes for a century,” Dennis Woodside, president of Impossible Foods, told me.
“The cheapest, most processed forms of chicken are incredibly cheap, by historical standards and other food products on the market,” said Lewis Bollard, who researches the welfare of farm animals at the Open Philanthropy Project last summer . “The chicken industry has cut all corners, does not pay the environmental bills, does not pay many of the public health risks it causes. They managed to produce a product that is artificially cheap and difficult to compete. “
But optimization is only part of the story. The other is that the meat industry has accumulated a lot of political power, which it has leveraged to make meat cheaper – and to make Americans eat a lot.
Livestock is heavily subsidized by the federal government. That said, neither Bollard nor Zak Weston, a researcher at the Good Food Institute, believes that direct monetary subsidies were the main reason why meat was so cheap.
More important are invisible forms of subsidies, such as not enforcing workers’ rights, exempting industrial farms from laws against cruelty to animals, not requiring companies to be involved in environmental cleaning and not restricting risky practices – such as the use of excessive use of antibiotics – which impose costs on the whole world.
“It’s not the case that vegetable-based meat is strangely expensive or labor-intensive or something,” Weston told me earlier. “The animal protein industry has spent decades extracting incredible efficiencies from every part of the program. Animal meat is able to externalize many of its negatives – externalities such as health care, ecology, worker welfare, animal welfare. “
In other words, if the animal meat industry were held responsible for the costs that its products and its operation inflict on society, meat would be much more expensive.
Vegetable meat is getting cheaper, but it still doesn’t beat animal meat
The impossible 20% price cut is big in absolute terms, but price parity is still a long way off.
However, industry experts are optimistic.
“We were thinking about cost reductions and getting to the cost structure of the ground beef commodity from the beginning,” David Lee, chief financial officer at Impossible Foods, told me earlier. “We knew that if we had the best product at the same cost, consumers would vote with their stomachs.”
In recent years, they have already made progress. Last year, Impossible Foods cut restaurant prices by 15%. Now, they are cutting recommended retail prices by 20%. The companies hesitated to share specific figures about their costs with me, but based on the Securities and Exchange Commission files, Bollard estimates that Beyond’s production cost dropped from $ 4.50 / pound in mid-2019 to $ 3.50 / pound in mid 2020.
In some establishments, such as Dunkin ‘, Beyond Meat’s Sausage Sandwich is sold for the same price as the meat sausage sandwich. Beyond Meat executive Charles Muth says Beyond products do much better when they are listed at the same price as meat.
“What we like to say here,” said Muth last year, “is that we are changing the way consumers and buyers think about what they eat. We don’t want the price to be a barrier when they are considering this. We would like to eliminate the prices of this conversation in the best possible way. “
There is no single brilliant secret for making a mass-produced product cheaper. Instead, experts told me, it is a matter of making every element of the supply chain, the manufacturing process and the distribution process work a little better, relentlessly.
When a company is big enough, it can buy ingredients on a large scale, get expensive equipment that is only worthwhile if used to make a huge amount of products, have distribution centers in many parts of the world to minimize shipping costs and negotiate better deals for your supplies. There is the potential for a virtuous cycle in which lower costs recruit more consumers, which allows for more cost savings.
It is these economies of scale that have driven Impossible Foods’ latest price cuts. “Last year, we more than doubled our production,” said Woodside. “The more we sell, the better use we have of our manufacturing lines, the better prices we get from our supplies, the more suppliers we can bring to the plant-based ecosystem.”
And while the ultimate goal of every plant-based food expert I talked to is price parity with animal meat, price cuts make a big difference before they even reach that point. Cheaper vegetable meat means options for more consumers and more restaurants. It also means less demand for animal products at a time when prices are high, animal welfare is ignored and Congress is investigating coronavirus outbreaks in slaughterhouses. There is a long way to go, but a 20 percent price cut is a substantial advance.