The Green Protein Challenge is a global movement encouraging consumers to transition to plant-based meat and dairy alternatives. In January 2023, a record 600,000 people signed up to the campaign's pledge to consume only plant-based products for a month. This included 180,000 participants in North America, 90,000 in Germany, and 60,000 in the UK. This total represents a doubling of participants compared to January 2021.
Research from investment bank Barclays on plant-based alternatives—such as pea-protein-based sausages, burgers, and mince—revealed a rapid uptake by consumers. The proportion of respondents who had tried these pea-protein alternatives rose from 42% to 49% between January and December 2022, according to a survey of 3,500 consumers across Europe and North America. Crucially, the survey found that 50% of those who tried these products continued to buy them at least once a week.
A industry representative noted: "Supermarkets across Europe have fully embraced the plant-protein transition. They are running dedicated multi-channel campaigns, redesigning their aisles to place plant-based proteins next to traditional meats, and expanding their own-brand ranges. Supermarkets recognize that sustainable, plant-focused supply chains are the future."
Yellow peas, the primary source of pea protein, have seen a massive surge in demand. Pea-based milk alternative sales grew by 320% between 2021 and 2023. Pea milk represented 10% of the alternative milk category in 2022, even as sales of conventional dairy milk remained flat. Economists estimate the cross elasticity of demand (XED) between pea milk and traditional cow's milk to be +0.15. Additionally, because consumers view pea protein products as premium, health-conscious, and environmentally friendly options, the income elasticity of demand (YED) for yellow pea protein isolates is estimated at +1.5. This high responsiveness to income, combined with rising lactose intolerance, has prompted major food conglomerates to scale up their pea-protein product lines, further accelerating crop demand.
Evaluate, using an appropriate diagram(s), the effects on farmers of an increase in demand for pea-protein-based products.
3 exam-style questions on OCR A Level Economics Supply. Each one has a worked solution and a mark scheme showing where the marks go.