Costing the Earth

A plant based burger yesterday, trying to save the planet

It all seemed so certain. Plant-based meat was going to save the world. Back in 2020, the category grew by 30% in the UK, with 13 of the top 15 brands achieving double digit growth. Plant-based offerings appeared in every Quick Service Restaurant chain, something that would have been unthinkable just a couple of years before. All of the major supermarkets launched their own vegan brands within the space of just 3 years, with some creating multiple tiers. The rate and scale of brand launches was completely unprecedented, appearing in chilled, frozen, convenience, ambient and food-to-go across every retail channel. Meat-free was the only story in food innovation, threatening to tear chunks out of the dominant animal-based market. Investment cash rolled in. New factories were built. Specialist innovation teams assembled. The Covid pandemic only seemed to accelerate growth, as consumers longed for healthier, more sustainable choices.

Fast forward four years, and the sector is licking its wounds, trying to regroup after a brutal 2023. In July, Samworth Brothers wrote off a multi-million-pound investment, closing Revolution Kitchen, its specialist plant-based manufacturing operation, after only 3 years. Nestle withdrew Garden Gourmet from the UK for the second time because of poor retail performance. Hilton Foods completely restructured their meat free operations, moving production away from the UK. Leeds-based Meatless Farm, once the shining light of the plant-based era, entered into administration in June. Lincolnshire-based manufacturer Plant and Bean also collapsed that month, owing more than £6 million to creditors. And to finish the year, V-Bites, a well-established plant-based player, went into administration after 30 years of trading, citing spiralling costs and disappointing sales.

So, what happened? How did the tide turn so quickly? The plant-based market was hit by huge declines in sales volume and penetration in 2023, largely driven by falls in consumer demand for the meat mimic products that dominated innovation a few years previously. At the same time, spiralling ingredients costs slashed already tight margins, forcing many operators to close their doors forever. Although it can be argued that meat sales have seen similar declines over the same period, there is no doubt that plant-based has been hit harder and faster by inflationary pressures and the cost-of-living crisis. Consumers have returned in droves to what they know, preferring the safety of cheap meat to the unknowns of soya-based alternatives.

At the same time, concerns about ultra-processed foods have never been more prevalent in the media, and plant-based burgers are a prime target for the ire of campaigners. Long lists of unknown ingredients such as protein isolate, methylcellulose, carrageenan, lecithin and bamboo fibre are easy to demonise, especially for unscrupulous meat lobbyists keen to protect their market share. Back in the heady days of 2019, retailers turned a blind eye to chemistry set ingredients lists just to get plant-based products on shelf. Now, with stretched consumers demanding safe, familiar options, the lure of a four-ingredient beef burger is greater than ever.

Is this the future vegans want?

But it is price that has really dominated consumer choice. If plant-based meats had price parity with meat, they would stand a far better chance of survival. And if they were the cheaper option, this would surely be their time to shine. But we are still at a point where plant-based options are considerably more expensive than meat equivalents, especially the branded options. Beyond Meat’s famous burger retails at £19.03 per kg, compared to a Tesco premium own label beef burger at £8.81 per kg. THIS plant-based streaky bacon will cost you over £33 per kg in Sainsbury’s, with a standard own label streaky coming in at only £9.17. 

These differences are clearly not just driven by the high margins demands of vegan entrepreneurs. Large manufacturers such as Samworth have been so squeezed by input costs that they have not been able to continue trading in meat-free, whilst maintaining their meat-based operations. And Richmond plant-based sausages command a 60% price premium over the equivalent pork product, sold by the same company under the same brand. So, what are the reasons for the specific pressures on plant-based? And why have they been so hard to overcome?

This is a curious and misunderstood issue. It is not, as is sometimes argued, solely down to pressures on the imported ingredients used to make plant-based foods. After all, most of the proteins and fats that constitute vegan meats are incredibly similar to the ingredients used in animal feed. Soya, palm, pea, fava bean and canola, are all fed to pigs and chickens in huge quantities, with feed volumes often far greater than those for direct human consumption.

In the UK, humans consume around 1000 tonnes of fava beans annually, whilst livestock gets through around 600,000 tonnes. And 2.7 million tonnes of soya are imported into the UK for animal feed each year, compared to the roughly 300,000 tonnes used directly in burgers, tofu and sausages. The pressures on the cost of plant-based ingredients have been equally felt on livestock feed, but for plant-based these pressures seem to have had a larger impact on retail price.

An important question must be asked here. Although pigs, cows and chickens are proven, effective ways of converting plant crops into delicious, edible protein, surely they cannot be more efficient or cheaper than eating the same ingredients directly. How can the input costs of a sausage made directly from soya be so much higher than one made out of a soya-fed pig? Why are plant-based foods, which cut out the messy, expensive, and inefficient animal-based part of the food chain, by far the more expensive option in UK retail?

Is this pig really more efficient than a soy bean?

The answer is, of course, a complex one. There are subsidies for animal production that have an impact, and these certainly need reviewing. Animal feed is often made from lower quality crops, or in the case of soya, from cheap GM varieties not approved for human consumption in the UK. There is a lot of waste in the plant-based supply chain, combined with too many low volume SKUs that cause huge inefficiencies. Short chilled shelf lives compound these problems, as do the complex supply chains of some plant-based protein and fat ingredients. And educating new plant-based consumers has been an expensive marketing challenge, with the cost of this needing to be passed on somewhere (an issue that hastened the decline of notoriously high-spending Meatless Farm). At the same time, meat lobby groups have pushed back hard against plant-based innovation over the past few years, forcing through restrictive naming regulations, creating disadvantageous nutrition rules, and generally poisoning the consumer well with some expertly judged misinformation campaigns.

But perhaps the biggest issue impacting both cost and price is also at the heart of another, already mentioned challenge. Those long ingredients lists that make plant-based burgers the target of anti-ultra-processed campaigners, also point towards a more fundamental issue. Introducing a host of expensive ingredients and processes adds a huge amount of cost to formulations, and whilst volumes are still so low, this has proved untenable. It is simpler and cheaper to mix the four ingredients in a standard beef burger, than to combine the twenty or more components of a plant-based equivalent, something that often requires several additional manufacturing processes. It has never been easy to make plant-based ingredients taste and behave like meat, and it is even harder to do it cheaply. These additional costs have driven many plant-based producers to the brink.

It is perhaps not all doom and gloom. There are success stories. For every Meatless Farm, there is a THIS. For every V-Bites, there is a Squeaky Bean. For every Revolution Kitchen, there is a Finnebrogues or Hughes. The rapid growth of plant-based led to huge over-capacity in manufacturing, and perhaps a lot of what we are seeing now is simply some much-needed consolidation. And if we are honest, no one with experience in UK Grocery looked at the huge proliferation of plant-based brands back in 2020 and expected them all to survive. But even so, in order for plant-based meats to truly thrive, and especially if they want to steal significant market share from meat, the cost and price issues still need addressing. And that will require some fundamental discussions about what we want from plant-based meat, including a significant rethinking of how such products are made.

The whole ingredient supply chain needs to be reviewed. The way plant-based meats are currently manufactured needs a thorough overhaul. Every point at which cost is added needs to be picked apart, in terms of both ingredients and operational efficiency. For all the talk of plant-based changing the world, the industry needs to accept that this will never happen until it reaches price parity, and preferably moves beyond. Plant-based meats need to be cheaper, healthier, and more delicious if they want to make significant inroads into meat sales. Currently, it can be argued that they are none of those things.

Plant based meat and cheese is just not good enough yet.

The next five years of plant-based innovation will not just be a matter of novel proteins, new types of fat, and the rise of cellular agriculture. It is going to be about reassessing how plant-based products are currently made, gradually introducing new ingredients, and developing some novel methods of processing that might help achieve price parity. This sort of innovation is tough, incremental, and perhaps less likely to attract investment than a flashy tech start-up promising cell cultured beef by 2030. But we should not be surprised if it is this sort of slow, boring innovation that genuinely transforms the plant-based category, whilst lab grown meat remains a far-off dream.

If you want to understand the near future of plant-based foods, it is likely to be about cheaper methylcellulose replacements, natural emulsifiers, better value flavour systems, new types of protein extraction and novel methods of achieving meat-like textures. It will be evolution not revolution, slowly improving what we have to make it cheaper, better quality and more sustainable. Once price parity becomes possible, a huge amount of other stuff will fall into place.

The challenges are significant, but not insurmountable. They are also important. Increasing the transition to plant-based protein is widely accepted as being vital in the creation of a more sustainable food system. Right now, price is one of the main factors holding this transition back. Solve it, and we might just change the world.

New Food Innovations new report into achieving price parity between plant-based and meat can be found here