Whether Plant-Based Meat Firms' Revenue Rises at the Expense of Regular-Meat Firms

Answer

Total revenue is price times quantity, so the events affect each market’s revenue through their effects on demand and supply, with the direction of the revenue change governed by the elasticities. The thesis is that the view largely holds — plant-based firms’ revenue is likely to rise while regular-meat firms’ revenue is likely to fall — but with two important qualifications that soften “at the expense of”: elasticity can reverse the supply-side revenue effect, and many regular-meat firms straddle both markets.

Plant-based meat — demand rises (taste shift). The research claims shift consumer tastes towards plant-based meat for ethical and environmental reasons, raising its demand. The rightward demand shift raises both equilibrium price and quantity, so total revenue rises.

Plant-based meat — supply rises (more suppliers). More suppliers, plus regular-meat firms’ alternatives, raise supply, lowering price and raising quantity. The revenue effect now depends on PED: if demand is price-inelastic (committed vegetarians and the very environmentally conscious see few substitutes, $|PED| < 1$), the price falls more than quantity rises and revenue falls; if price-elastic ($|PED| > 1$, consumers treating it as a substitute for regular meat), revenue rises.

Combined — plant-based revenue likely rises. With rising global environmental awareness, the demand increase is likely to outweigh the supply increase, so equilibrium price and quantity rise and total revenue rises for plant-based firms.

Regular meat — demand falls (taste shift and substitution). The same taste shift moves consumers away from regular meat, lowering its demand and so its price, quantity and revenue. Additionally, the fall in the price of plant-based meat lowers demand for regular meat via their positive cross elasticity: since they are weak substitutes for many ($0 < XED < 1$ — vegetarians and the environmentally committed will not switch back), the demand fall is less than proportionate, so regular-meat revenue falls but only modestly.

Regular meat — supply effect from own alternatives. If regular-meat firms cut back regular-meat output to roll out alternatives, supply falls, raising price and lowering quantity; the revenue effect depends on PED (revenue falls if elastic, rises if inelastic as a dietary staple). If they keep regular-meat output unchanged while adding alternatives, supply is unchanged.

Combined — regular-meat revenue likely falls. With the demand fall (taste plus substitution) likely outweighing any supply change, and demand for regular meat plausibly price-elastic, regular-meat firms’ price, quantity and revenue most likely fall.

Judgement. The view largely stands: plant-based firms’ revenue is likely to rise (demand outweighing supply) while regular-meat firms’ revenue is likely to fall (taste shift and substitution outweighing supply effects). But two qualifications matter. First, the conclusion is elasticity-contingent: if plant-based demand is price-inelastic, the surge in suppliers could lower plant-based revenue, and if regular meat is a dietary staple with inelastic demand, its revenue could even rise on a supply cut — so the result is not guaranteed. Second, and decisively for “at the expense of”: the preamble notes regular-meat firms roll out their own alternatives, so they straddle both markets — their combined revenue from regular meat and alternatives may exceed that of pure-play firms in either market. The defensible stand is therefore that the plant-based product gains revenue while the regular-meat product loses it, but the firms historically selling regular meat need not lose overall, since by diversifying into alternatives they capture the rising market rather than being displaced by it.