Will meatless burgers moo-ve in on beef’s market share as prices fall?

Discussion
Photo: Impossible Foods
Jan 07, 2021

Impossible Foods announced yesterday that it is cutting the price of its Impossible Burger patties for the second time in under a year.

The plant-based meat alternative brand said it is dropping prices an average of 15 percent to foodservice industry distributors. The company said the price cuts will apply to its quarter-pound and third-pound Impossible Burger patties, five-pound Impossible Burger bulk packages and Impossible Sausage Made From Plants patties, CNBC reports.

“We sincerely hope our food distributor colleagues pass along this price cut to hard-working restaurateurs and their customers in this unprecedented time of need,” said Dennis Woodside, president of Impossible Foods, in a statement. “As unemployment remains stubbornly high and the effects of COVID-19 continue to ravage the economy, it’s imperative to provide affordable, delicious and sustainable food to restaurants and the public.”

“Our stated goal since Impossible Foods’ founding has always been to drive down prices through economies of scale, reach price parity and then undercut the price of conventional beef from cows,” said  Dr. Patrick Brown, founder and CEO of Impossible Foods.

“Today’s price cut is just the latest — not the last — step toward making the food system sustainable,” he added.

Rachel Konrad, a spokesperson for Impossible Foods, told CNBC that the lowest whole price for the company’s meatless burger is $6.80 a pound. That compares to the Jan. 1 average price for beef patties of $5.32 a pound.

DISCUSSION QUESTIONS: Do you think prices more in line with beef will help grow sales and market share of plant-based alternatives? What do you think are the marketing and sales keys for retailers and restaurants selling these products?

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"Lowering the price to make Impossible Burger bulk packages more compatible with the cost of beef will definitely entice more people to give it a try."

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16 Comments on "Will meatless burgers moo-ve in on beef’s market share as prices fall?"


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Richard Hernandez
BrainTrust
Richard Hernandez
Director, Main Street Markets
10 months 27 days ago

I guess with anything, if you lower the price the hope is that increased volume would offset the erosion on gross profit and customers would trade up to a healthier option as the price gap is reduced between the real thing and the healthy option. My question would be, when economic situations get better, will they raise the retail price back again to pre-pandemic levels?

Jeff Weidauer
BrainTrust

The challenge for Impossible Foods and other plant-based meat alternatives is to make a product that is both sustainable and healthful. Price is less the issue for most buyers than is the long list of ingredients and its highly processed content.

Tony Orlando
Guest

I have tried these products, and those who love them will appreciate the lower price. For us lovers of real beef hamburgers, it won’t move the needle at all. I love vegetables, but nothing beats a great burger with real beef.

Shep Hyken
BrainTrust

Pricing is important, but does it matter what the price is if nobody is buying? That’s not the case with Impossible Foods (and plant-based alternatives in general). The meatless burgers have proven to be successful. Finding the balance between a popular product and the pricing that will create higher sales is the key.

Carol Spieckerman
BrainTrust
Carol Spieckerman
President, Spieckerman Retail
10 months 27 days ago
Yay for Impossible for achieving the, well, near impossible: getting its beef alternatives’ prices closer to subsidized “originals.” I appreciate Impossible’s mission to make meat alternatives more widely available and affordable (rather than just trying to make a buck). The happy difficulty these days is that so many wonderful meat and dairy alternatives exist. Some “taste just like it” (or better), others bring taste and ingredient options that expand the palate. The days of convincing and cajoling people into trying these products are over. Availability and affordability matters most at this point. As a vegan, my main challenge has been to sort through the options and stay on top of new product launches. Several local stores including Walmart offer impressive options across all alternative categories yet plenty of “duds” are featured as well (products from particular brands that just aren’t the best in the line-up). As product launches accelerate, retailers should stay on top of what’s hot and which products are the best representations in particular categories rather than defaulting to supplier recommendations or guessing.… Read more »
Georganne Bender
BrainTrust

Lowering the price to make Impossible Burger bulk packages more compatible with the cost of beef will definitely entice more people to give it a try. I have read the list of ingredients so I won’t be one of them.

Brandon Rael
BrainTrust

Health and wellness are emerging trends, and consumers are more conscious of what they are eating. With consumers already spending a premium on organic fruits, vegetables, meats, a price reduction on alternative plant-based meats is always welcome.

The reality of the situation is that consumers have to spend significantly more on healthier organic options and, with their wallets already strained, any savings would be appreciated. However price and quality aside, while plant-based meat may be a viable alternative for when consumers don’t want to eat meat, it won’t be enough to turn the tide to a 100 percent vegetable-based diet.

Perry Kramer
BrainTrust

Lowering the price will certainly help attract new customers. Lowering the price is a smart move as part of the long game. One of their goals at this point is to continue to introduce the product to new customers and this will help. As part of their strategy to introduce healthier eating consumers do not need to switch 100 percent away from beef to plant-based. Being able to introduce some more healthy meals at a similar price is a sound strategy. Once they have built up a larger consumer base, they can slowly move the prices back up to maintain their target margins.

Gary Sankary
BrainTrust

At best this is a niche market. I’ve enjoyed Impossible Burgers at fast-food places. It’s a good product, I haven’t been able to tell the difference. My motivation has to do with dietary restrictions around beef and cheese together, so this is a chance to enjoy some forbidden fruit – a cheese burger. For others it’s about environmental concerns or a lifestyle choice. What I don’t see is people trading up to this just because they want to try something new. Because of that I don’t see changes having much impact overall to beef sales. If Impossible finds a way to lower prices even more and can position the product significantly lower than the market price for ground beef, that might be another discussion.

Bindu Gupta
BrainTrust

As per a recent report in September 2020, 72 percent Of Impossible Burger sales displaced animal-derived foods. Given this statistic alone, there is a high probability that price reductions can help grow sales and market share further for Impossible Foods. In addition, consumers are becoming more conscious of the environmental impact of their actions which perfectly aligns with Impossible Foods’ mission to make the food system sustainable.

Raj B. Shroff
BrainTrust

I think adjusting prices will help because at grocery they are more expensive. For those who have considered but do see cost as a barrier, it might entice them.

From a marketing standpoint, the idea that an alternative can complement regular meat consumption is smart, they should continue to do more of that to get people who want to eat less meat to try and add it to their regimen. Merchandise it with other meat, make it easy to find and easy to shop. Show comparisons with signage so shoppers can make informed decisions on trade offs.

As for restaurants, ones I order from do a great job of making it taste great, I am not at all jealous of my family as they eat their hamburgers because my alternative tastes great, has all the toppings theirs does, etc.

Cynthia Holcomb
BrainTrust

As a former vegetarian who is now still basically one, I walk past the meatless burger selection. Personally, I cannot get past my visceral reaction to the hurdle of a highly processed food product, which is relatively expensive and engineered. Bottom line, in the ’90s we saw meatless products as replacements for beef — Gardenburger, for example. Now some 25 plus years later, the idea is to engineer plants to resemble as closely as possible the taste, texture, and consistency of real beef. A real distinction in terms of consumer preferences, especially those of vegetarians. An oxymoron of sorts.

Ralph Jacobson
Guest

I think awareness is critical. Across the population of beef eaters, I would guess a small portion have tried meatless alternatives. The other point is proper preparation of the food itself. Many of these alternatives can dry out faster than beef, I have found. I think sampling in stores would be a great idea, within COVID-19 guidelines, of course.

storewanderer
Guest
10 months 27 days ago

The ingredient list on these is … interesting. Personally I have not tried this product, though I considered it. Again I suggest folks take a hard look at the ingredient list. Way too processed to replace raw meat, for me. Add a bun (also very interesting ingredient lists on most of the commercial buns) and you are consuming one heck of a list of ingredients.

Typically you decrease a price on something when it is not selling well.

Reading between the lines here it looks to me like this is a fad, the demand is not growing like it did in the “growth” stage of the fad, and the price decrease is an attempt to get more food service folks to pick this product up in hopes that having it as an option at more restaurants/fast food places, will introduce it to more consumers and build demand. Perhaps it will work.

For me it wouldn’t be about the taste — it is just the ingredients list….

Kenneth Leung
BrainTrust

The taste of Impossible, I have to admit, comes very close to beef in my personal taste test. For many, if a plant-based alternative is close enough, they will give it a try. Personally, I prefer my vegetables whole and when I eat meat, I want real meat, but many I think will try it and make their own decision if the price premium is small.

Rachelle King
BrainTrust

Launching a brand with stated goal to undercut prices of the market leader is not a sustainable strategy. It’s a price play and price wars have very few winners.

Still, achieving price parity in this economy might give them the boost they need to drive trial. However, it’s unlikely this is going to drive high conversion rates. Most people who eat beef do so because they like it, not because they are looking for an alternative. So, undercutting price is not going to move this consumer. For their core consumer, those truly looking for an alternative to beef, generally price is not a key driver but parity can’t hurt in this economy. That leaves a relatively small niche of consumers who want an alternative but can’t afford it. When all those consumers have converted, after Impossible Burger has undercut the price of beef, beef will still be the market leader.

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Braintrust
"Lowering the price to make Impossible Burger bulk packages more compatible with the cost of beef will definitely entice more people to give it a try."

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