Impossible Foods is known for its plant-based meat alternatives, but it is expanding its range of products based on cultural movement, an unforeseen pandemic, and – in the true fashion of Silicon Valley – science. On Tuesday, he announced that his Impossible breakfast sandwich was added to the Starbucks menu and most of its places in the USA.
With 22 grams of protein, the Impossible Breakfast sandwich consists of the Unsweetened Impossible sausage made from plants, which is combined with a fried egg without a cage and seasoned cheddar cheese and served on ciabatta artisan bread.
“Starbucks’ commitment to adding more plant-based ingredients to its menu is a new benchmark for large corporations,” said Dr. Patrick Brown, founder and CEO of Impossible Foods.
Michael Kobory, Starbucks Sustainability Director, said this was part of the company’s sustainability initiatives and efforts to meet the growing customer demand for factory-based options.
Impossible Foods, ranked 49th on CNBC’s 2020 Disruptor 50 list, produces meat, dairy, and fish products from its proprietary herbal ingredients backed by celebrities such as Katy Perry and Serena Williams, but Impossible’s CFO Foods David Lee told CNBC he is trying to move away from the plant movement, which is often associated with the food industry niche.
“We do not think of it as an alternative (meat) industry. We think that we make the best meat consumed by the meat-eater – competing on an equal footing with the best product, ”Lee said when asked about the association with the young vegetable market. “This is how we define our attention.”
Lee said that 9 out of 10 impossible buyers are traditional meat eaters, fueled by recent events, such as the lack of meat from the Covid-19 pandemic and the recent expansion of 1,000 grocery stores. It also boasts a new round of $ 500 million, which is approximately $ 1.3 billion.
Impossible Whoppers is represented at 7500 Burger Kings nationwide, but it declined to report sales figures. Burger King Restaurant Brands, the parent company, has provided updated sales information for May. In the US, comparable sales growth for Burger King in the first quarter was minus 6.5%. During the pre-crisis period, in January, February, and the first two weeks of March, the company posted positive, comparable sales growth in the United States in the form of unambiguous low numbers, and also emphasized that sales were due to “the continued significant contribution of the Impossible Whole and improvement.” performance in the value layer of our menu. “
Earlier, in 2020, Burger King added Impossible Whopper to the value menu to attract more visitors.
While the restaurant business suffered, it was not as bad as the restaurant industry as a whole, Impossible Foods said. It also launched a direct channel to the consumer for direct delivery during a pandemic.
Expanding the reach of retailers and consumers, he seeks the same placement as his restaurant partners.
“Together with Burger King, we started discussing the importance of having the Impossible brand alongside their main brand, Whopper,” Lee said. “The opportunity to give meat-eaters another great option for breakfast is an important milestone,” he said of the recent new “Impossible Sausage” opportunity for a Burger King sandwich with croissants.
Lee said that since March, the company has increased its share in grocery stores by 18 times and expects that by the end of 2020 it will increase by 50 times. And it depends on this scale, especially on processed meat eaters, before it can lower prices to be more comparable to traditional meat. “All we need is meat lovers to love our product,” Lee said.
A report by the Institute of Good Food and the Plant Food Association says that sales of plant-based foods and drinks in 2019 amounted to about $ 5 billion, up 11% from 2018, while the alternative to meat products is the largest growth plant-based food production. Analysts say they expect continued double-digit growth until 2020.
Until then, Impossible focused on the catering sector, and Beyond Meat focused on consumers and the food sector, analysts told CNBC. But a new channel for direct access to services and new retail partnerships, such as with Kroger, are likely to increase consumer access — especially in rural areas — according to food research analyst Cara Rasch. “Many people tried to shop online during the pandemic, and some people find that they like it, and may not have tried it before,” she said.
“The pandemic made it clear that we need to launch our offer to consumers much earlier than we thought,” said Samir Kaul, founder of Khosla Ventures and early investor in Impossible Foods. “Only a couple of weeks have passed, but I think it will be very significant.”
Lee and Kaul said the company plans to compete with its science-based ingredients and investment in research and development. Most of the recent funding will go to research and development, as well as to the supply chains on which the larger food conglomerates rely. When asked if he could tap into large supply chain companies like Nestle, which launches its Sweet Earth alternative protein brand in the US, or Kellogg, which launched Incogmeato, Lee said he was betting on these conversion rates meat. “We believe that if we rely on the main consumer, the meat-eater, then our ability to grow along with the supply chain will grow along with this demand.”
According to Kaul, such options of larger manufacturers are still being validated. “They cannot say,“ Oh, this plant material is a niche, ”and then announce their products,” he said. “We are technology investors in Silicon Valley who are engaged in large industries. This is where our bread and butter is, ”said Kaul. “I can guarantee you that the best doctors of science will want to work at Impossible, not at Nestle or Kraft.”
It is impossible to comment on whether the IPO will qualify as the rival brand Beyond Meat, which was published last year. The rise in traditional beef prices has also allowed companies to profit.
But as the market matures, consolidation sets in, analysts say.
“Many large food companies are not only trying to introduce their own brands, but are also trying to acquire these small companies,” Rush said. “Some large food companies may be interested in buying Impossible Foods.”
Lee declined to comment on future funding expectations or potential acquisitions, only saying: “We are open to any partner who has our agreed mission, and open to anyone who can help us achieve our mission and business needs as quickly as possible.”
Analysts believe that alternative meat is still considered a young sector of the market.
According to Rob Dickerson, managing director of equity research for food producers at Jefferies, Robert Dickerson, managing director of equity research for food producers at Jefferies, is forced to expand distribution and grow “as much as possible.” faster ”, especially after Beyond Meat became public last year and has already reached global opportunities. It’s too early to say whether brands like Impossible will reach a wider meat market and not try one or two times. “The key is for consumers to try, like, and then buy more,” he said.