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December 15, 2019

Plant-based burgers see big year, but meat sales also rise

Published on November 25, 2019

In 2019, Impossible Foods signed contracts to sell its newest plant-based burgers in grocery stores and more than 17,000 restaurants, including the Burger King chain.

Beyond Meat started selling its latest generation of plant-based burgers in June, with contracts to sell them at grocery stores and restaurants and make test runs at chains including McDonald’s, Dunkin’, and Subway. KFC is testing Beyond’s meatless alternative to chicken.

In July, a report from investment firm UBS called 2019 a breakout year for plant-based alternatives to meat, predicting the $4.5 billion industry would rise to $85 billion by 2030. The New York Times reported in October that meat sellers such as Tyson, Perdue, Hormel, and Smithfield also are selling alternatives to meat products.

The latest plant-based products entered the market during a years-long rise in meat consumption. Department of Agriculture data indicate the average person’s meat consumption has risen each year since 2015, to about 220 pounds annually in 2018. More recent data from the agency indicated U.S. meat production was on pace for another small rise in 2019.

Restaurant Brands, which owns Burger King, told investors in October that adding the Impossible Whopper contributed to 5% sales growth for the third quarter, the chain’s strongest growth since 2015. But the parent company also saw growth in its meat-focused business that quarter: Sales at its fried chicken chain, Popeyes, rose 10%, the chain’s best increase in almost 20 years.

Glynn Tonsor, PhD, a professor of agricultural economics at Kansas State University, said beef sales may keep rising even if nonmeat alternatives gain popularity. He thinks the products can coexist, each gaining larger slices of a growing pie. And he thinks it’s unlikely demand for veterinarians’ services will decline. 

Two burgers
An Impossible Burger (left) and a beef burger

Compete or coexist

Rick Husted, vice president of market research for the National Cattlemen’s Beef Association, said in October the average person eats about 58 pounds of beef each year. When beef products and plant-based alternatives are counted together, the alternatives account for 0.5% of the market.

Like Dr. Tonsor, Husted thinks the products introduced in 2019 will coexist with beef, as Boca Burger and Morningstar Farms burgers have done for years.

But Impossible Foods’ founder and CEO Pat Brown said in the company’s Impact Report 2019 that he intends for his product to replace animals in food production by 2035, which he acknowledges would require doubling production and sales each of the next 16 years.

“For Impossible Foods, a sale only counts if it comes at the expense of an animal-derived product,” he said. “As intended, more than 93% of consumers who purchase the Impossible Burger regularly eat meat from animals.”

Dr. K. Fred Gingrich, executive director of the American Association of Bovine Practitioners, said cattle veterinarians always worry about consumer demand for animal products. The average person’s red meat consumption has declined since the 1970s, beef prices have been volatile in recent years, and the dairy industry seems to be pulling out of a substantial price drop over the past five years.

But Dr. Gingrich thinks beef tastes better than even the recent plant-based alternatives. He also thinks it’s great to have so many food choices while animal products retain a place in American diets.

Dr. Harry Snelson, executive director of the American Association of Swine Veterinarians, doubts nonmeat alternatives are having much impact on meat consumption or that swine veterinarians are concerned. He sees the alternatives as an expanding but small part of the food market, with potential to draw more people to restaurants that sell meat and nonmeat products.

If, for example, four people are going to lunch and one is a vegetarian, that group may be more likely to go to Burger King because it has a nonmeat sandwich, Dr. Snelson said.

Demand is complicated

Josh White, executive director of producer education for the NCBA, said he has even seen some indications beef sales rise at the stores where alternatives are introduced.

Dr. Tonsor said he had few data on the impact of Beyond Meat and Impossible Foods on meat sales, other than the figures from the NCBA. Even with better data on sales of the newer products, figuring out why demand is changing is complicated.

Substituting one product for another can be one of many causes.

He also cautions against looking to trends in dairy alternatives for predictions on what will happen in the market for beef. Several products became and remain popular among people who are unable to drink or eat dairy products, which is less of an issue in beef sales.

Dr. Tonsor said communities in other countries are transitioning diets, from rice-centered to chicken-centered or from chicken-centered to beef-centered, and he thinks it’s unlikely people with recent access to meat will be quick to switch back to plant-based products. Even if meatless alternatives gain market share against meat in the U.S., he thinks international demand is strong, and American livestock producers have price and quality advantages over competitors in Brazil, Denmark, and Australia.