Why market for plant-based meat is imploding

When plant-based meat substitutes started to make its way to the shelves, the US was thought of as a natural market. But data shows that the market for it is beginning to implode there. This appears counter-intuitive, especially considering the rise of flexitarians—those who consume meat but are also open to plant-based options for health or environmental reasons. On looking deeper, a story rooted in economics emerges.

The surprise surrounding this slowdown stems from the initial promise. Plant-based meat was seen as a gateway for meat-eaters to dabble in vegetarianism by offering the familiar taste and texture of meat without the ethical concerns associated with animal agriculture. However, the high price point of these alternatives compared to traditional meat products has proven to be its Achilles heel. Turns out consumers, even in developed markets with a flexitarian mindset, are often unwilling to pay a hefty premium for a plant-based burger when a comparably priced meat option sits right next to it.

From Silicon Valley’s perspective then, India appeared to be a much more promising market for plant-based meat alternatives. With a large and established vegetarian population—estimates suggest over 40% of Indians identify as vegetarian—there seems to be a ready-made audience for meat substitutes without eating the meat itself.

But Shashikant Shetty, a Mumbai-based restaurateur is among those unwilling to buy this argument. When the idea was first pitched to him some time ago, he tried it out in his kitchen. “The kheema tasted great because we used a lot of masala. We used it in our Chinese menu as well to make Manchurian. And while the replicas to chicken nuggets were good, it was not quite the same as chicken. I’d have thought of using it for my vegetarian guests as an alternative to paneer and mushroom.”

But turned out, plant-based meat alternatives are more expensive than paneer. This price disparity is even more stark when compared to another popular protein source in India such as mutton. This leaves plant-based alternatives caught in a tight squeeze—too expensive to compete with vegetarian staples and not cost-effective as compared to premium meat options.

The real champion in this affordability battle, however, is chicken. It’s the most widely consumed meat in India, and its price point is significantly lower than plant-based alternatives and mutton. In fact, boneless chicken and paneer cost ₹250 per kilo in Mumbai, points out Shetty. This cost advantage makes chicken the go-to protein source for many Indians, especially those looking for a meaty indulgence.

For health-conscious vegetarians who feel their families are not getting enough protein, whey powder has made its way into Indian homes. Then there are those who have accepted eggs as well. Given this established culinary landscape, it appears plant-based meat alternatives will have it tough in India as well, considering the significant price disadvantage they currently carry. At the time of writing this, questions sent earlier to entities in the space hadn’t come in.

On an altogether different note, advancements in technology could offer a solution. Lab-grown meat, though in its early stages of development, presents a potentially revolutionary approach. This technology involves cultivating meat from animal cells in a controlled environment, eliminating the need for animal slaughter. If the economics of synthetic meat production turns out to be viable, it might be a game-changer. “This is something I am watching and will invest into when commercially viable,” says Vikram Varma, of Raw ‘n Ruckus, a Mumbai-based agritech and foodtech entrepreneur.

It could cater to meat-eaters concerned about animal welfare and environmental impact, without forcing them to completely give up meat. Unlike plant-based alternatives, synthetic meat could potentially replicate the taste and texture of real meat more closely, offering a more familiar and appealing option for consumers.

At the end of the day, while environmental concerns are gaining traction, especially among younger generations, the economic realities cannot be ignored. The market needs to see significant price drops. And the potential of lab-grown meat offers a glimpse into a future where both environmental and economic considerations can be addressed, potentially paving the way for a more sustainable and ethical protein source for India and the world.