At this moment plant-based meat cost more than conventional animal meat. It is projected to reach its parity by 2023, according to information from the nonprofit organization Good Food Institute (GFI). Achieving this price parity is crucial for mainstream adoption because many consumers are more likely to try a new vegan option if it’s not much more expensive than its animal-based counterpart.
In a recent study conducted by GFI consumers ranked price as the second-most important factor after the taste when purchasing a vegan product. Vegan meat sales grew by 45 percent in 2020, on average, even though that plant-based meat on a weight basis doubles the price of conventional beef, three times the price of pork, and four times the price of chicken. If the price tag will be reduced most consumers, would increase the purchase of plant-based products.
To get to price parity, plant-based foods still have a few obstacles. The animal agriculture industry has been able to keep costs down because it has the help of government subsidies. The plant-based sector is newer and has not yet achieved the same scale.
2030: Will it be the end of animal meat?
In a recent report by investment firm Blue Horizon and business consultant BCG, they’ve pointed out that the key to consumer acceptance is price parity. The report says too that the product must taste good as the conventional foods they replace and cost either the same or less. They estimate that price parity will happen in three stages.
First, plant-based products such as burgers, dairy, and egg substitutes made from soy, peas, and other plant-based proteins will achieve price parity in 2023. By 2025, alternative proteins lab-made from microorganisms such as fungi, yeasts, and algae will reach parity. Protein grew from animal cells (also called “cultured meat” are currently too expensive to produce but will price parity by 2030.
GFI’s own research suggests that cultured meat could become cost-competitive as early as 2030 with a projected production cost of USD 3 per pound.
To know why this is happening we need to understand why the cost of animal meat is rising.
Animal agriculture has experienced higher input costs, such as meatpacker labor issues, and supply chain interruptions which affected the price of animal meat. In 2021, beef, chicken, and pork saw double-digit price increases compared to the same week in 2020 due to the COVID-19 pandemic, when slaughterhouses and meat-processing plants were forced to close because of COVID-19 outbreaks among workers, creating delays in the meat supply chain.
Another key influence is that In recent years, major brands and private labels attempted to underprice animal meat to further drive demand for plant-based products. In 2020, Trader Joe’s launched its plant-based burger patties made with pea protein and priced them at USD 4.49, and Kroger launched its plant-based chicken ground at USD 6.99 for a one-pound package.
In 2021, plant-based brand Impossible Foods announced its second price reduction within a year for its plant-based ground meat, decreasing the retail price to USD 9.32 per pound, which significates a 20% drop. Its competitor BeyonMeat is still expected to follow.