Impossible Foods, Beyond Meat battle to achieve price parity with

The popularity of plant-based meat products from companies such as Beyond Meat and Impossible Foods has skyrocketed in recent years, aided by availability everywhere from supermarkets to Burger King and Starbucks.

“You look at the plant-based category, and millennials and Gen X are attracted to it for health reasons and sustainability reasons,” said Rupesh Parikh, a senior analyst of food, grocery and consumer products at Oppenheimer & Company.

That has helped the plant-based meat industry boom. Grocery sales of plant-based foods that directly replace animal products have grown 27% in the past year, now exceeding $7 billion in sales, according to the Global Food Institute. In total, the global market for meat substitutes is set to grow to $23.4 billion by 2024, according to market research company Euromonitor.

However, one of the biggest deal breakers for potential consumers of plant-based meat is the higher price compared with actual meat.

At major retailers that sell the products, such as Kroger and Walmart, you can buy two Beyond Meat plant-based hamburger patties for $5.99, whereas at the same stores, you can likely get two pounds of ground beef for around the same price and end up with more hamburger patties than plant-based patties.

To make a further dent in the more than $100 billion U.S. meat industry, alternative meat will need to address that price parity.

“As much attention as they’re getting, it’s just a very small fraction of the total meat or hamburger market,” said Carlos Barroso, president and founder of CJB and Associates, a research and development firm specializing in the food and beverage industry. “I think there’s plenty of runway left for them to grow, and people are looking for alternatives, not necessarily to become vegans but to give up meat occasionally.”

While animal meat currently costs less for consumers than the alternative options, experts say this might not always be the case.

Big meat manufacturers have been producing animal meat products for years at a large scale and keeping prices low. Plant-based companies don’t have the same economies of scale.

“Anytime you’re a niche product — and niche usually means you are smaller, more innovative, you’re creating a trend and you’re not one of the big manufacturers — your costs are going to be higher and your prices are going to be higher. It just goes hand in hand,” said Debra Holstein, owner of The Edible Future, an innovation and research consultancy group that’s worked with companies such as Unilever, Kraft Foods and Campbell’s.

Many plant-based meat companies are new and haven’t had the years of production under their belt to match the levels of animal meat manufacturers, Holstein added.

Getting alternative meat to taste similar to animal meat equivalents is one of the primary…