Plant-based meat producer Impossible Foods will be lowering its suggested prices for US grocery stores by 20%.
The decision of Impossible Foods to cut its suggested retail prices for US grocery stores brings its plant-based products closer to the price of meat it aims to replace.
According to the US Department of Agriculture’s national beef retail report, Impossible’s pricing for meat-free burgers have been lowered to $5.49 for patties and $6.99 for a 12-ounce package.
Despite the price cuts, these meat alternatives are still double the price of regular meat.
Impossible Foods is also reducing prices outside the US by double digits, marking the first time that the company slashed its retail prices. However, this is the third time in the past year that the firm permanently discounted products.
Restaurant distributors have also received lower prices in 2020 and again in January.
Expansion and competition
The price cuts comes as the company continued to expand its retail presence. The number of supermarkets selling Impossible Foods’ meat substitutes has increased by 113 times in the past year. Costco Wholesale is also currently testing its products in 47 of its locations.
New interest in meat substitutes has been attributed to the Covid-19 pandemic, with more customers turning to grocery stores for their food supply and as meatpacking plants faced shortages.
Impossible Foods President Dennis Woodside said: “Our plan was not to move this fast in retail last year until Covid hit.” since 2019, the company's production capabilities have increased by six times.
Woodside claims that the firm has become more efficient in its production as it runs its production lines more frequently and adds more shifts to its schedule.
He also mentioned the increase in the number of suppliers to Impossible Foods. “They are able to pass along savings to us,” he said.
Meanwhile, the firm's rival Beyond Meat has also been looking to reduce its prices as more competition arises. Beyond Meat started selling frozen value packs for its meatless burgers, with its 10-pack's suggested retail price at $15.99, or $6.40 per pound.
This January, PepsiCo announced its partnership with Beyond Meat to develop and distribute plant-based snacks and drinks.
According to a Beyond Meat spokesperson, the partnership with Pepsi will enable the firm to enter more categories and launch new products to market faster than before. The spokesperson added that the US joint venture between the two companies may include a future expansion into China and the UK.
Meanwhile, Pepsi will benefit from the joint venture by giving it access the growing plant-based protein market.
Ramsey Baghdadi, consumer analyst at data and analytics company GlobalData, explained: “Consumer demand for plant-based products is large enough to make an impact in sales, as the plant-based alternative industry continues to grow.”
“PepsiCo’s decision to widen its existing selection of plant-based snacks will be a game changer in the long-term, as more consumers naturally gravitate towards the trend,” Baghdadi added.
However, both Impossible Foods and Beyond Meat are facing pressure Future Meat Technologies, an Israeli-based company producing cell-based meat. The firm has been able to reduce the production cost of a cultured chicken breast to $7.50.
Currently, Singapore is the sole country to give its approval to lab-grown meat after granting permission to Eat Just in December.
Woodside said: “Ultimately, what we’re all competing against is the 1-trillion pound industry, which is the current animal-based protein industry.”
