Part Three: Price Parity, Economic Convergence and the Future of Alternative Protein
Question: We’ve been talking about the convergence of consumer demand around meat analogues and alternative proteins, and so far, we’ve covered their appeal to lots of different age groups and to people and governments across the globe.
What about the money, though? I see prices falling for my favorite faux sausage, but pork is still cheaper. Are these kinds of designer foods just for the rich and famous? Are we headed toward anything like price parity?
Stephanie: Oh, good question! Thanks for the nice set up.
We think about three main motivations for eating less meat:
- Health — both individual health like fewer antibiotics and hormones, less fat and cholesterol; and collective health like zootrophic disease.
- Cruelty — toward the animals of course, and also working conditions in the meat packing industry.
- Environment — energy and water resources, deforestation, runoff.
People are concerned about those things across economic levels. Rich people don’t automatically care more about their health. You can’t say that one income group has more or less empathy for food animals, or for human workers in the meat industry. And concern and care about the environment cuts across economic boundaries, too. Income influences consumers’ abilities to act on their beliefs, rather than the beliefs themselves — people care or don’t care, regardless of whether they have a lot of money. Wealth just gives us more choices opportunities to show our concern.
Movement toward price parity with ground beef or chicken will allow a wider addressable market to act on their beliefs. Greater innovation, product development and competition among meat analogues will eventually and inevitably drive prices down for the consumer in every category. Suddenly a person whose low income has previously narrowed her food choices has access to more possibilities. She can choose an analogue burger at a fast-food restaurant or a frozen lasagna at the grocery store and have the same cost and convenience she’d get from meat. At that point, even the purely price-sensitive meat buyer can make protein choices based on moral values.
Now, undeniably, other solutions contribute to better human health, allow for more humane nutritional choices, and improve our current environmental situation, too. Alternative proteins aren’t going to put beans and rice or baked potatoes out of business. It’s not necessarily that plant or cellular meats become our exclusive sources of protein or nutrition. A healthy diet will continue to include a veggie taco and a salad. Equally undeniably, though, alternative proteins will contribute to the overall movement away from meat-centered menus.
From a business standpoint, alternative proteins don’t need to put grilled cheese sandwiches out of business. Price parity means a larger market — more people buying plant-based proteins, more sales and more money. And price parity — which is where we’re headed — will remove price as the last obstacle to everyone being able to include plant-based and cellular meat in their diets. Starving artists, Gen Xers, minimum-wage workers, everyone, will become part of the target market.
This convergence of markets we’ve covered in these last three posts –from all different economic backgrounds, all across the world, and all different age groups — creates a huge demand for alternative proteins, now and even more in the future. The investment money that’s pouring into this space fuels growth, and that growth fuels profits.
To recap: Movement toward price parity with beef, chicken and even seafood will allow retail customers, as well as foodservice consumers, access to healthier, more ecologically sustainable, ethical protein choices.
We’ve talked about the current and future convergences of markets, across generational, geographical and now economic lines. The future includes a rapidly expanding market for alternatives to animal protein — plant-based, cell-based, mycoproteins and all the rest.
Already covered: Part One: Alternative Protein for People of All Ages
And also: Part Two: Geographical Convergence and the Global Market
I think your point is spot on. As we gain scale, price parity is sure to follow. At that point the world will be our (plant-based) oyster!