By Sofia Schwallie
Earlier this year, Impossible Foods announced a 15% price cut on its products to distributors as well as an intention to repurpose the traditional meat supply chain to serve its production needs, indicating a shift in the way that consumers interact with vegan products. Generally, veganism is seen as a dietary option primarily for the well-to-do, unaffordable to the majority of Americans living paycheck to paycheck. As a result, the marketing of meat alternatives and other vegan products has primarily been positioned towards affluent urban target markets, thereby limiting the consumer groups that interact with Vegan products. In light of Impossible Foods reducing the cost of its products to a variety of sellers and consequently expanding its reach into different consumer diets, veganism is becoming increasingly accessible to groups that formerly comprised smaller portions of the market for vegan goods.
With veganism gaining a reputation as a dietary and cultural movement, its drawbacks are apparent for those in lower income brackets with less disposable income. When adopting a vegan dietary regimen, there are significant costs incurred by consumers beyond purchasing groceries, including supplements and vitamins that are needed to healthily sustain a balanced vegan diet. As the market for vegan goods is expected to reach a valuation of $7.5 billion by 2025, brands are searching for ways to cut costs, thereby reducing the price of their products to consumers.
Following this trend, Impossible Foods has structured its supply chain to closely mimic that of a traditional meat supplier – minus the slaughterhouses. The company has partnered closely with agriculture workers, truckers, and others involved in traditional meat production to improve and perfect the process behind its Impossible Burger. Co-opting this process has given the company the opportunity to appreciate the efficiencies that come alongside mass production while simultaneously reducing their resource consumption relative to meat-based counterparts. The company has been able to reach its goals of achieving “economies of scale, reach[ing] price parity and then undercut[ting] the price of conventional ground beef from cows.” Following sharp reductions in the cost of producing its plant-based alternatives, Impossible Foods has pursued a strategy of increasing production and capitalizing on lower costs to expand their offerings and partnerships and increase sales.
These steep price cuts resulting from an increase in production and a strong, productive supply chain have increased the accessibility of Impossible Foods– specifically the Impossible Burger– to consumer groups previously untapped by the brand. As a result of this change, Impossible Foods has partnered with brands such as Burger King, Qdoba, Cheesecake Factory, Hard Rock Café, and Disney. Each of these brands cater to markets largely isolated from veganism. Through these partnerships, Impossible Foods has thus not only increased the scope of its market, but has also helped to change the reputation of vegan cuisine across a variety of demographics and consumer groups. Impossible Foods’ brand has surely benefitted from these partnerships, but it has also grown across consumer groups by expanding the varieties of Impossible Burgers offered through its partnerships and distributors. The firm has developed and marketed quarter-pound and third-pound plant-based patties, allowing for a greater diversity of products at a lower price.
With vegetarian and vegan diets growing in popularity among millennial and Gen Z consumers, these production and resultant price changes have significantly boosted Impossible Foods’ brand recognition, market share, and future growth prospects. Compared to its primary competitor’s decreasing market share, Beyond Meat, Impossible Foods has seen its market share grow as distribution increases. Moreover, with longstanding brands partnering with the younger and smaller-scale firm, the expanded reach afforded to Impossible Foods serves a critical role in generating interest in vegan goods and brands that are new to the food and restaurant market.