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Plant-Based versus Conventional Meat: Substitution, Complementarity, and Market Impacts

That’s the title of a new paper co-authored with Vincenzina Caputo and Dan Blaustein-Rejto. Here’s the abstract:

“Evidence regarding whether consumers view plant-based meat alternatives (PBMAs) as substitutes or complements to animal-based meat is limited; however, the ultimate effect of increased demand for plant-based meats on poultry and livestock production depends on this relationship. While the research on consumer demand for meat alternatives is growing, most current elasticity estimates are based on stated preferences discrete choice models, which assume consumers choose only one option and that all options are substitutes. This study employs a basket-based choice experiment (BBCE) to estimate own- and cross-price elasticities at both disaggregate and aggregate product levels. We utilized a between-sample approach and designed two BBCEs to reflect both at-home and away-from-home consumption settings. We then used the results from the BBCE to inform an equilibrium displacement model. Our findings indicate that: 1) consumers are more price-sensitive when dining out than when eating at home, 2) own price elasticity for PBMAs lie between premium meat options (salmon and ribeye steak) and more affordable choices (burgers and chicken breast), 3) PBMAs complement conventional meat in at-home consumption but show a mix of complementarity and substitution dynamics in dining out; and 4) lowering prices of plant-based beef and chicken alternatives is unlikely to significantly impact conventional poultry and livestock production. ”

Read the whole thing here.

Beliefs about Beef vs. Plant-Based, Cell-Cultured, and Lab Grown Alternatives

The July 2023 edition of the Consumer Food Insights survey is now out. I want to draw attention to one set of questions we added that delved into consumers’ beliefs about beef vs. plant-based, cell-cultured, and lab grown alternatives. Each respondent was only asked one set of these questions. Cell-cultured and lab-grown refer to the same thing, but we were curious if the the alternative labeling produced a different set of beliefs.

By and large, respondents have positive perceptions of beef. Animal welfare is the only characteristic which consumers rated more positively than beef. The specific wording on this item was “Animal Welfare (if consuming the product improves overall animal well-being in the country).” Interestingly, “cell cultured” was not substantively different than “lab grown”; the later actually produced more positive views on the alternative in some dimensions such as environment and animal welfare. I say “interesting” because the start-ups seem to prefer “cell cultured” over “lab grown.”

This is the last edition of Consumer Food Insights I will be directly leading. I look forward to see the excellent work continue from the team at the Center for Food Demand Analysis.

Research Reports on Soy-based Food Demand

With the Center for Food Demand Analysis and Sustainability (CFDAS) at Purdue, we’ve been working on a project funded by the United Soybean Board and the Foundation for Food and Agricultural Research to explore the impacts of various investment alternatives on soy farmer profitability. To undertake the economic modeling, we need to understand consumer demand for a variety of soy-based foods, and the extent to which consumers are willing to substitute between soy-based foods and other products.

We’ve now released three short research reports on consumer demand for:

There is a lot of interesting material in each report. For example, here are a couple graphs showing trends in the milk and milk-alternative markets. The big story here is the rise of oat milk, which has cut into sales of other milk-alternatives.

Another interesting finding from the meat and meat-alternatives paper that is consistent with prior research is the low degree of substitutability between conventional meats and the new meat alternatives. In fact, the estimates suggest chicken is a weak complement with (rather than a substitute to) meat alternatives.

Alternative Protein Sources: Balancing Food Innovation, Sustainability, Nutrition, and Health

That’s the title of a new publication from the National Academies of Science, Engineering, and Medicine summarizing the outcomes from a workshop on alternative proteins. I served on the planning committee and gave a talk about the market prospects for alternative proteins.

The report (pages 23-30) summarizes my talk. Here are a couple excerpts from my portion:

“Jayson Lusk, Purdue University, explored the socioeconomic impacts of increasing the intake of alternative proteins. He began with an overview of the economics of protein production in the United States, including agricultural land use, the current agricultural economy, farmers’ attitudes toward various protein sources, consumer purchasing habits and preferences, and market trends for alternative proteins. He explained that most dietary protein consumed in the United States is derived from animal sources, with poultry and meat as the top sources, followed by bread products, milk, cheese, eggs, plant-based protein foods, and seafood (Pasiakos et al., 2015). When the data are aggregated by animal, dairy, or plant-based sources, more than 80 percent of U.S. protein consumption comes from animal and dairy foods (Phillips et al., 2015). Lusk noted that protein quality varies, and statistics based solely on grams of protein consumed do not account for quality. ”

and

“Sales of plant-based meat alternatives constitute some level of substitution for animal proteins, as well as an expansion of the protein market, Lusk explained. Using an economic model that links retail consumption to cattle production, he examined how a shift in demand toward plant-based
meat alternatives—namely those created by processing a combination of ingredients such as soy, wheat, and pea, with novel additive ingredients such as heme (as opposed to less processed products such as tofu and tempeh)—could affect meat production (Lusk et al., 2022). Currently, he reported, these effects are fairly small. As an example, he observed that a 10 percent decrease in the price of plant-based meat alternatives is projected to create only a 0.15 percent decline in the number of cattle raised in the United States. As contributing factors he pointed to the small size of existing estimates across price elasticities of demand and the relatively inelastic nature of the U.S. cattle supply, which does not directly compete for land use with other forms of agriculture. ”

There is a lot more in the report, which summarizes a wide range of perspectives on alternative proteins.

A Thanksgiving Price Dashboard

My collaborators and team in the Center for Food Demand Analysis and Sustainability at Purdue have pulled together a couple interesting resources that compare the cost of a Thanksgiving meal across the United States. Check out the infographic here, or the data-dashboard here.

The resources rely on price data we have been scraping from online ordering systems from major grocers across the United States. Our long-term plan is to build out price indices that complement the official Bureau of Labor Statistics food price index; our indices will be timelier and provide information about differences across geography and product characteristics.

For now, I hope you enjoy the Thanksgiving price dashboards. See how prices in your state compare to prices in other states by checking out our data dashboard that will continue to be updated over time. See how conventional turkey prices compare to Organic turkey prices - or even tofu if you prefer a vegetarian option.