Alternatives can try, but there’s no beating real beef when it comes to consumer preferences.
A recently released comprehensive study conducted by Drs. Jayson Lusk, Glynn Tonsor, and Ted Schroeder assessed the impact of plant-based proteins on beef demand.
Report findings
The report was commissioned by the Cattlemen’s Beef Promotion and Research Board. The study focuses on plant-based alternatives and not cell-based products, as they are not yet on the market. The study surveyed over 3,000 U.S. residents in September 2020.
One of the main findings of the report was that beef is currently chosen in the marketplace about three times more often than plant-based protein alternatives. Beef also has a good image, and perceptions of taste, appearance and price are greater for beef than plant-based options.
Consumers see beef as overall better for farmers, consumers, rural communities, and food prices. However, plant-based products are viewed as superior when it comes to the environment. The alternative proteins also scored higher on animal welfare, health, and environmental concerns. Consumers also rank alternative proteins as more appealing when it comes to cholesterol, fat and dietary fiber.
Also of note, the study said that, “Providing consumers information highlighting ingredient lists or nutrient panel contents does not significantly affect selection between beef burger and plant-based meals,” which has been a popular marketing strategy.
The report found that regular meat consumers are not the core market segment for plant-based protein items—rather, it’s “flexitarian” dieters who eat mostly vegetarian, but sometimes meat.
“Be aware that if plant-based protein prices decline, regular beef eaters will likely incorporate more plant-based protein in their consumption choices,” the report said. “Since the share of plant-based protein is still small this is not currently a large threat to the beef industry.”
The report also noted, “However, the main traction the plant-based sector has is it currently appeals to the younger generation that tends to have greater concerns about health (e.g., fat content), environmental concerns, likely to have young children at home, likely to have college education, and has growing income.”
“If plant-based protein price declines and the product is viewed more favorably by consumers in taste and appearance, it could become a stronger substitute for beef. However, that is likely some ways into the future.”
To view more details about the report, visit AgManager.info and search for “Impact of New Plant-Based Protein Alternatives on U.S. Beef Demand.”
Impact of lower prices
Lusk and Tonsor have been running the Meat Demand Monitor since February 2020, which contains a simulation of grocery preferences for consumers. Individuals select which protein products they would buy at different price levels when shopping. An example of the simulation is nine different protein products, ranging from higher-priced steak to chicken, and higher-priced plant-based patties to beans and rice. There is also an option for “If these were the only options, I would buy something else.”
In a blog post, Lusk said Tonsor released monthly results of the survey reporting how often the plant-based patty was chosen out of the set of eight protein options (plus the “choose none” option). Through 2020, the reports have shown the plant-based patty being chosen only 3 percent of the time, compared to ground beef chosen 24 percent of the time.
To explore the difference in consumer preference, Lusk compiled all the data from the August-December results from the Meat Demand Monitor, which consisted of 36,018 choices made by 4,002 consumers. He then used a model which allowed for flexible substitution patterns and used the estimates to predict which options people would choose in different conditions.
One of the questions Lusk evaluated was which protein the consumer would have chosen if plant-based patties weren’t available. The results showed about 22 percent would have chosen chicken breasts and 23 percent beef. Surprisingly, only 6 percent selected beans and rice, and another 6 percent chose “none of these.”
Lusk’s model also showed for every 1 percent reduction in the price of plant-based patties, there was a 3.08 percent increase in market share of plant-based patties. The same 1 percent reduction would reduce the market share of ribeye and pork chops by about 0.10 percent each and ground beef by about 0.08 percent.
In the simulation, ground beef was priced at $4.49/lb. compared to the plant-based patty at $11.99/lb. Lusk evaluated what the consumer preference would be if both options were priced at $4.49/lb. If the plant-based patty lost $7.50/lb. to be priced the same as ground beef, the model predicted the market share for the plant-based product would increase from 3 percent to 22 percent, and the ground beef share to 18 percent.
Lusk noted that this scenario presumes a much larger price change than used in the survey, so it is a projection outside the range of choices actually observed. He concluded, “This is a fluid situation and there remains much to be learned.”
To read more about Lusk’s methods and results, please visit his blog at jaysonlusk.com.
Meat alternative companies are already making a shift toward dropping their prices to appeal to more consumers. Impossible Foods recently dropped their product prices by about 15 percent. This brings the plant-based patties to $5.49 for a 12-oz. package.
“With economies of scale, we intend to keep lowering prices until we undercut those of ground beef from cows. Today’s price cut is merely our latest—not our last,” said Impossible CEO and founder Patrick O. Brown. — Anna Miller, WLJ editor
