Impossible Foods and Beyond Meat are aiming to cut prices for their plant-based meat items as they get ready to face competition from food giants like Nestle, Tyson Cargill Inc. and Smithfield Foods Inc.
The larger companies are planning to roll out their versions of plant-based patties at lower price points amid greater demand for products at fast-food chains and restaurants.
Redwood City, California-based Impossible Foods, the maker of meatless burgers and pork, said on Tuesday it's cutting wholesale prices for food items by 15 percent.
Impossible Foods price cut would reportedly bring down the cost of its plant-based meat to between $7.90 to $8.50 a pound, the Wall Street Journal reported, and it's unclear how the price cut would impact grocery stores and restaurants that sell its food.
Beyond Meat, meanwhile, told analysts last week it wants to have at least one of its products comparably priced to real meat by 2024.
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A slew of U.S. chain restaurants has implemented plant-based meat products on menus, including Starbucks and Yum Brands-owned KFC. McDonald's tested a Beyond patty in Canada last month, while Burger King rolled out its Impossible Whopper nationwide last year.
U.S. retail sales of plant-based foods have grown 11.4 percent in the last year bringing the total plant-based market value to $5 billion, according to data released Tuesday from the Plant-Based Foods Association and The Good Food Institute. And the meat category along is worth more than $939 million with sales up 18 percent in the past year, data show. Refrigerated plant-based meat continues to grow up 63 percent.
"Plant-based foods remain a growth engine, up 29% over the last two years," Plant-Based Foods Association senior director of retail partnerships Julie Emmett said in a statement, adding: "Growth is fueled by innovation in categories across the store and retailers are responding by expanding shelf space to satisfy the rapidly expanding consumer base seeking more plant-based foods."
The total U.S. retail food market has grown 2.2 percent in dollar sales during the same period and was flat in unit sales suggesting that plant-based food products are driving retail sales nationwide, data show.
In addition to meatless meat, plant-based milk and meals are leading the charge. Sales of plant-based milk grew 5 percent over the past year now comprising 14 percent of the whole milk category. Cow's milk sales, meanwhile, are nearly flat, according to the report.