REDWOOD CITY, Calif. —Plant-based meat manufacturer Impossible Foods Inc. has cut U.S. distribution prices for its products by an average of 15%, raising the question of whether companies can maintain premium prices as plant-based meats become more popular in the foodservice industry.
The move comes amid monthly production records and new economies of scale, the company said. The price reductions reflect Impossible Foods’ vision to compete against meat-producing brands, specifically those using beef.
“Our stated goal since the founding of the company has always been to drive down prices through economies of scale, reach price parity and then undercut the price of conventional ground beef from cows,” said Patrick Brown, CEO of Impossible Foods. “Today’s price cut is just the latest step toward our goal of eliminating animals in the food system.”
Impossible Foods does not manage the final point of sale for its products, the company said. Instead, it sells directly to its redistributor, which in turns sells to the food distributors who work directly with operators of convenience stores, restaurants and others. Those distributors determine the prices that operators pay for the products. How the price cuts will affect those of foodservice operators is unknown.
Besides the price cuts, Impossible Foods has also added two products to its portfolio, including quarter-pound and third-pound Impossible Burger patties. The company will continue making its flagship 5-pound bulk package of Impossible Burgers.
Production for Impossible Burgers quadrupled in 2019 compared to 2018, according to the company, forcing it to launch new manufacturing capacity, which will come online later this year. Overall, the plant-based meat industry garnered more than $12 billion in 2019 and is projected to reach nearly $28 billion by 2025, according to MarketsandMarkets Research, Northbrook, Ill.
“We are thrilled to expand our lineup of SKUs and give customers what they’ve been demanding,” said Dan Greene, senior vice president of U.S. sales for Impossible Foods.
Plant-based meat substitutes turned heads in convenience-store foodservice last year, and customers remain interested. Nearly a quarter (23%) of consumers said they would be interested in purchasing a plant-based burger from a c-store, according to CSP sister research firm Technomic, Chicago. GetGo Cafe and Market, a division of Pittsburgh-based Giant Eagle, and Minit Stop, Hilo, Hawaii, both added the Impossible Burger to their menus last year. GetGo launched the Impossible Burger with cheese, mushrooms and its GoGo sauce, a revised version of Yum Yum Sauce found at hibachi restaurants. Minit Stop took the launch a step further and replaced all beef burgers on its menu with the Impossible Burger to promote sustainable eating.
Based in Redwood City, Calif., Impossible Foods produces plant-based foods that it says have a lower environmental impact than raising animals for food. The privately held company was founded in 2011.
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