In the previous post, we mentioned the social and environmental consequences of the meat industry, which will be elaborated on in this post to include the economic impact of these consequences.
When producing regular meat, there is a cost that comes with it that is much higher than the cost of producing plants. A study that was published by the Proceedings of the National Academy of Sciences (PNAS) showed that in the future, it would cost the US around $197 billion to $289 billion per year if people continue with their current animal-based diet rather than shifting their diet to being more balanced plant-based. [1] They concluded that the global economy will lose up to $1.6 trillion by 2050 in order to fulfill the ever rising demand for meat. [1]
If the entire US population shifted their diet to plant-based meat, the food lost in meat production would feed 350 million additional people. [1]
Producing meat also comes with health care costs. People who consume meat are likely to have heart disease, stroke, cancer, obesity, and diabetes. [1] With all these health issues, the demand for health care increases. According to the Proceedings of the National Academy of Sciences (PNAS) study, the US alone could save $250 billion in healthcare costs if they switched to a plant-based economy. [1]
Shifting to a plant-based economy isn’t a bad thing either. In the US, we see that as plant-based food industries continue their gradual grow, their market power increases, as evident in the annual 8% increase in sales. [3] Based on a study done by Plant Based Foods Association, the plant-based foods industry alone amounts to sales of $13.7 billion a year.
Recently, there has been an increase in people switching to plant-based diets inspiring the Vegan Movement.
Both vegetarian and vegan diets have shown to be less costly than animal diets. A detailed study on Swedish consumer' spending habits by economist Janina Grabs, reveals that switching to a vegetarian diet meant savings around 10% on food and drink costs. [4] However, it depends on how you do it. Some vegetarian and vegan food options are more costly, like organic and vegan processed foods.
Shifting to a vegan diet has been a trend since 2018, where many millennials of the ages 25 to 35 showed an interest in veganism and a willingness to try it out. [5] It’s mostly prominent in North-America, but Europe is slowly jumping onto the train as well. In 2017, Vivera, a vegan fast-food company sold out their 40,000 steaks within a week of being stocked.[6]
As more people become aware of the consequences of consuming meat, they slowly choose more sustainable options that range from decreasing their meat consumption and purchasing vegetarian options when available to being open to trying out veganism for a week. In 2018, a trend emerged on YouTube that had people try being vegan for a week.
A Buzzfeed video that garnered 4.5 million views [7]
From 2014 to 2017, there has been a 600% increase in the amount of vegans. The US population went from being 1% vegan to 6% in only 3 years. [8] Furthermore, the topic of veganism has quadrupled in the years of 2012-2017. [6]
You can view the Google search trends here.
However, no matter how much money would be saved on livestock and health care, having these plant-based companies control the entire meat industry would cause a huge economic disruption.
First of all, the livestock industry employs a large amount of people that would require assistance transitioning to a new career, whether in agriculture, helping with reforestation, or in processing factories. This assistance would require a huge amount of money and a division of individuals to manage their relocation. [9] Despite any possible efforts, this diet transition would still result in large unemployment numbers. In Canada, the beef industry generates an estimate of 228,000 jobs in Canada. [10] However, what's mind blowing is how each job in this sector yields 3.56 other jobs elsewhere in the economy, showing the true impact the meat industry has on the economy, regarding jobs and wages. [10] As for the smaller meat companies, they would struggle in keeping their business running while paying their employees. As mentioned in our other post, the Canadian beef industry contributes $18 billion annually to the country's GDP. [10] So the question becomes ould having people transition to plant-based meat affect the country's GDP?
Most definitely. It's important to note that these plant-based burgers are currently being provided by two main US companies. That's right. Burger King is partnered with Impossible Foods to provide the Impossible Whopper (U.S. only). Same thing applies to the Beyond Burger offered at Tim Hortons that comes from the company Beyond Meat.
Seeing that plant-based meat requires laboratories and scientists that have figured out the chemical composition of this meat-less burger, it seems that these two companies will dominate the market for a while until someone else uncovers the secret behind its composition and is able to reconstruct it. Yet even then, both these companies will have immense market share of the meat industry, making it crucial for start up companies to have different products they can bring into the market in order to enter it in the first place. Seeing that these new companies would require a great deal of time to figure out a successful product and a way to finance and manage this risky initiative, most countries wanting to introduce plant-based meat would have to resort to creating a partnership between the current two main US companies, Beyond Meat and Impossible Foods. Doesn't this heavily resemble an oligopoly? It is for this reason that the GDP of countries other than the U.S. will decrease. Let's illustrate what we mean by using Canada for example.
If Canada's meat industry was completely or mostly made up of plant-based meat, and there were two dominating non-Canadian companies that provided this meat, Canada's meat industry would greatly lose the revenue it would receive through regular meat exports, as well as, producing meat as most revenues would be going to non-Canadian companies. This doesn't seem like a far fetched idea as Canadian restaurants, rather than investing in creating a similar product to those offered by Beyond Meat and Impossible Foods, they've signed partnership deals that would greatly benefit the foreign plant-based meat companies, thus the foreign country it comes from, as opposed to having this revenue go to a local company and boosting the country's GDP.
Furthermore, having the meat industry controlled by plant-based meat can potentially have a negative impact on the environment. There are numerous farms that operate on their income and any subsides they receive from the government. By having a plant-based meat dominated meat market, these farms might be forced to get rid of these animals which would affect the biodiversity of the farm land, thus, having a negative impact on the local environment. [9] Additionally, this could cause large social upheaval in rural communities, due to their dependence on providing livestock to the meat industry. [9]
Overall, seeing that the current meat industry is an important source of income, employment, and stability for a country, until plant-based meat is offered by various companies of that country that also have a large and stable market share in the international meat industry, switching completely to plant-based meat could negatively impact a country's income. The plant-based meat industry should also stay away from being an oligopoly, but rather a competitive market that would allow various companies to enter and compete with each motivating them to create newer and better products.
This is why we are campaigning for "substituting" actions rather than "eliminating" ones, in order to balance the positive and negative economic consequences. Simply choosing the sustainable choice whenever possible can do so much in reducing the negative impact the meat industry has on our health, economy, and environment. Such interest would also encourage more companies and restaurants to introduce plant-based meat, thus, over-time we'll start to see the positive impact of plant-based meat increasing. Recently, Beyond Meat revealed a 26,000-square-foot facility dedicated to recreating every popular meat product on the market. Since their 2016 debut, the company has sold 25 million burgers, also seeing their sales increase by 70% last year. They have also revealed that they struggled to meet the demands at several Whole Foods stores as they ran out of inventory, showing that the company was not expecting the high demand for their products. [11]
In the U.S., this initiative has had great success, thus, with more Canadian stores introducing these sustainable products, we hope it will experience the same success here. To aid this initiative we decided to play our mandatory role in advocating for better products to help our ever growing climate change problem.
Work cited:
1. Eswaran, Vijay, and QI Group. "Vegetarianism Is Good for the Economy Too." World Economic Forum. Accessed June 14, 2019.
2. Davis, Lauren Cassani. "How Much Money the World Would Save If Everyone Became Vegetarian." The Atlantic. March 30, 2016. Accessed June 14, 2019. https://www.theatlantic.com/business/archive/2016/03/the-economic-case-for-worldwide-vegetarianism/475524/.
3. Fox, Katrina. "Here's Why You Should Turn Your Business Vegan In 2018." Forbes. January 02, 2018. Accessed June 14, 2019. https://www.forbes.com/sites/katrinafox/2017/12/27/heres-why-you-should-turn-your-business-vegan-in-2018/#7446430f2144.
4. "The Rebound Effects of Switching to Vegetarianism. A Microeconomic Analysis of Swedish Consumption Behavior." Ecological Economics. May 19, 2015. Accessed June 14, 2019. https://www.sciencedirect.com/science/article/pii/S0921800915002153.
5. Hancox, Dan. "The Unstoppable Rise of Veganism: How a Fringe Movement Went Mainstream." The Guardian. April 01, 2018. Accessed June 14, 2019. https://www.theguardian.com/lifeandstyle/2018/apr/01/vegans-are-coming-millennials-health-climate-change-animal-welfare.
6. "Almost 40,000 Vegan Steaks Sold At Tescos 'Within Days'." RSS. Accessed June 14, 2019. https://www.plantbasednews.org/post/40-000-vegan-steaks-sold-tescos-within-days.
7. BuzzFeedVideo. We Tried The 7-Day Vegan Challenge. November 08, 2018. Accessed June 14, 2019. https://www.youtube.com/watch?v=QSXsKVZ-V4Y.
8. "Why the Global Rise in Vegan and Plant-Based Eating Isn't A Fad (600% Increase in U.S. Vegans Other Astounding Stats)." Food Revolution Network. May 07, 2018. Accessed June 14, 2019. https://foodrevolution.org/blog/vegan-statistics-global/.
9. Nuwer, Rachel. "Future - What Would Happen If the World Suddenly Went Vegetarian?" BBC. September 27, 2016. Accessed June 14, 2019. http://www.bbc.com/future/story/20160926-what-would-happen-if-the-world-suddenly-went-vegetarian.
10. "Industry Stats." Industry Stats » The Canadian Cattlemen's Association. Accessed June 14, 2019. http://www.cattle.ca/cca-resources/industry-stats/.
11. Raphael, Rina, and Rina Raphael. "Exclusive: Inside Beyond Meat's Innovative Future Food Lab." Fast Company. September 25, 2018. Accessed June 14, 2019. https://www.fastcompany.com/90202590/exclusive-inside-beyond-meats-innovative-future-food-lab.