Plant-based alternatives haven’t taken over….yet

A new study, published in Applied Economic Perspectives and Policy, has found that while sales and market share of new-generation plant-based meat alternatives have grown in recent years, it has not reduced consumer spending on animal products.                   

The study, by Ohio State University, found that plant-based meats sold in ground form, in meat-like patties and as sausages, are mostly an add-on to beef and pork and tend to serve only as a substitute for chicken, turkey and fish.

“We thought plant-based meat alternatives would be a potential replacement for red meat, but they’re not. It’s more of a complement,” said study co-author Wuyang Hu, professor of agricultural, environmental and development economics at The Ohio State University. “People buy pork and beef, and at the same time they also buy plant-based meats.”

For this study, the researchers obtained weekly Nielsen scanner data from the first week of January 2017 to the second week of July 2020 on fresh meat expenditures at grocery, drug, supermarket, dollar and military stores across 40 US states. Study categories included plant-based meat alternatives, beef, chicken, turkey, pork, other meats and fresh fish.

Results showed that plant-based meat alternatives constituted only 0.1 percent of average total expenditures on fresh meat during the study period.

Beef and meat alternatives were the highest-priced options, with beef costing an average of $5.44 per unit and alternatives averaging $4.84 per unit. The study also found that reduced prices on beef and chicken lowered demand for plant-based meats, but lower prices on imitation meat didn’t have much of an effect on demand for animal protein sources.

Those findings as well as the way plant-based meat sales grew during product promotions suggested plant-based meat alternatives were “more of an impulse buy and not a weekly purchase,” Hu said. “We concluded it’s novelty-seeking. Consumers are pack followers. When they see a trend they say, ‘I should try this’ and form similar preferences.”

Results also suggested that most of the plant-based products’ growth in market share occurred during the COVID-19 pandemic, when fresh meat prices rose dramatically as shutdowns impacted the supply chain.

“We hypothesised that from a plant-based meat alternative company perspective, what they are trying to do is replace people’s diet of beef and pork,” Shuoli Zhao, co-author of the study said. “We actually found the opposite is the case. Consumers are buying plant-based meat alternatives on top of planned expenditures on fresh meat or are triggered by a promotion or the layout of the retail environment – which is an indication this is not currently a real threat to the fresh meat industry”.

“Our findings suggest that besides marketing, plant-based protein companies should focus their R&D on providing products that meet consumers’ expectations – and then people will make their own choices about whether meat alternatives will become a staple in their diet,” the authors concluded.