Battle of the meatless burgers could spark wider price war
Fierce competition could help lower the currently high cost of new plant-based patties
When Canadians had a hankering for burgers this summer, they fired up more than just a grill.
A battle of the burger has flared up on the menus of fast-food giants and in the aisles of grocery stores across the country since Beyond Meat, Lightlife, Meatless Farm Co. and others popularized patties made from pea proteins, mung beans or soy in the last year.
Meatless burgers have been around for years, but recent improvements in the manufacturing technology has produced a product that tastes so much like its beefy counterpart, it’s attracting a mainstream consumer who still eats meat, but is curious about plant-based burgers because they’re healthier and easier on the environment.
The problem is, meatless burgers can cost more than twice as much as traditional beef burgers, leading many to wonder if the recent influx of new competition — including new products from supermarket house brands — will put pressure on companies like Beyond Meat to drop their prices.
A 2019 Nielsen study revealed that 43 per cent of Canadian consumers intend to increase plant-based food consumption, and in the last two years they have purchased 4 per cent less meat. But “price is still a problem” for some plantbased protein brands, said Beena Goldenberg, a spokesperson for the PlantBased Foods of Canada advocacy group and the chief executive officer at Hain Celestial Canada, which makes Yves veggie burgers.
“It’s almost elitist food right now,” Goldenberg said. “It is very expensive.”
A recent peek at grocery stores revealed a pack of two Beyond Meat burgers and a package two patties from
Lightlife, a Maple Leaf Foods subsidiary, each sell for about $8, or $4 per patty.
The Undeniable Burgers from Loblaw’s President’s Choice costs about $10 for a pack of four ($2.50/patty), while the Meatless Farm Co. has priced two patties at $7 ($3.50/patty), Morning Star Farms are selling four for $6.49 ($1.62/patty) and Yves sells its Good Veggie Burger for four for $6.99 ($1.75/patty)
Meanwhile, a President’s Choice’s package of eight thick and juicy beef burgers cost $14.99, or $1.87 per patty, less than half the price of the highend plant-based burgers.
“Pricing on the Beyond Meat burger is, I don’t think, sustainable,” Goldenberg said.
“At that price, you are going to get a certain amount of curiosity, but repeat (buys) when you’re compared to a meat burger is going to be difficult.”
Though El Segundo, Calif.based Beyond Meat has managed to attract financial backing from Leonardo DiCaprio, Jessica Chastain, Snoop Dogg and Bill Gates, the company has yet to turn a profit.
And while it has become the plant-based protein of choice for Tim Hortons sausage breakfast sandwiches, Subway meatballs, Quesada burritos and tacos, Aroma Espresso and A&W burgers, its competitors have been figuring out how to undercut it.
President’s Choice, for example, has shaved a few dollars off its competitors’ prices with its Undeniable burgers and German supermarket chain Lidl, which has stocked the Beyond Meat brand, started selling its own Next Level patties in packages of two costing 2.99 euros, or about $4.40 ($2.20/patty).
“They are charging a bit less because they are not putting the kind of research in that we are and … some are reverse engineering our product line, but they are chasing a ghost because we have already moved on,” Chuck Muth, Beyond Meat’s chief growth officer, told the Star.
“We think competition is ultimately going to be good for the category. It is going to be good for consumers, so we understand this and we expect it, but we feel really confident in our product.”
Beyond Meat recently committed to pricing at least one of its products — most likely a plant-based beef item — below the cost of meat within the next five years.
Muth knows it’s no simple task. Most companies producing plant-based burgers spent years and millions on finding a way to make them taste, feel and bleed like a beef burger.
They work with proprietary technology that costs serious dollars to alter, but is crucial for the product’s taste.
Beyond Meat, for example, has a secretive process that “applies heating, cooling and pressure to align plant-based proteins in the same fibrous structures that you’d find in animal protein,” its website says.
California-based Impossible Foods Inc., which scored a deal with to provide products to Burger King, has a method that is just as intensive because it involves fermenting DNA from soy plants and inserting it into a genetically engineered yeast to create heme, a molecule it says “makes meat taste like meat.”
“It’s not something where you can throw five people in a room in a lab and say ‘Figure this thing out,’ ” said Muth, who added that Beyond Meat employs a team of 70 culinary and science experts.
Then there are the challenges associated with ingredients — pea proteins, soy, beans, beets, apples, potato starch and brown rice — that sometimes must be sourced from several farms because of seasonality or availability.
Soy isolates are easier to source and cheaper, but Beyond Meat prefers yellow pea proteins grown in Canada, which come with challenges of their own.
“There is a limited amount of pea protein that is grown and sourced in North America,” Goldenberg said. “There isn’t a good supply and it’s expensive and as a result, it drives the pricing up.”
Troubles also abound when plant-based burger makers constantly change recipes to simulate meat even more closely.
Beyond Meat recently updated its burger, adding mung bean, rice protein and pockets of fat to increase juiciness and flavour, and ensure that they darken from a red colour when raw to a brown when cooked.
Each alteration introduces the cost of new research and development, ingredients and changes to machinery, packaging and marketing. Because Beyond Meat and other big brands supply stores and quick-serve restaurants, sometimes they land discounts for bulk buying ingredients.
But supermarkets with product lines have tricks too: longstanding relationships with suppliers, in-house brands with hundreds of items to use similar ingredients for and no need to beg or maintain sales levels to get and keep products in grocer aisles.
Kathlyne Ross, Loblaw’s vicepresident of food product development, said in an email to the Star that the President’s Choice Undeniable Burger is “competitively priced” and the reaction to it has so far been “positive.”
She would not say whether the grocery goliath had intentionally chosen to sell its plantbased burger for less than its rivals or if it will be looking to reduce the cost.