The competitive environment within the plant-based food industry is likely to heat up after Impossible Foods said Tuesday it reduced wholesale prices by 15% on average.
The Impossible Foods News
Impossible Foods, the maker of the Impossible Burger, will lower the price it asks for plant-based meat from around $8.50 a pound to $7.90.
President Dennis Woodside told The Wall Street Journal the decision to do so is due to competitive concerns.
Many potential clients are holding off on trying the company's products and will only do so if "it's cost-competitive," the CEO said.
Rival plant-based food company Beyond Meat Inc's (NASDAQ: BYND) CEO Ethan Brown has mostly shied away from discounting the price of that company's burgers, according to WSJ.
Branding seems to play at least a small role in purchasing decisions: the Florida-based restaurant chain BurgerFi International told WSJ it decided against switching from a Beyond patty to a competing product that costs less.
Plant-Based Food Economics
One might assume plant-based food companies are at an economic advantage given the absence of managing livestock and lower grain, water, and energy requirements.
Meat alternatives are made from soy and protein. Yet the plant-based production processes are still more expensive, in part due to their relatively small size and scale compared to the global meat industry.
To address costs, both Impossible and Beyond are looking for ways to make their production process more efficient and part of the savings can be passed on to the consumers.
Beyond hopes to offer consumers at least one product that costs the same as traditional meat by 2024, according to WSJ.
Photo courtesy of Impossible Foods.