The Bleeding Edge of Plant-Based Meat: Q&A with Impossible Foods’ CFO David Lee
The emergence of a zoonotic virus and an unprecedented disruption to the meat supply chain in North America has fast-tracked the adoption of plant-based meat alternatives. At the forefront of this revolution is California-based startup Impossible Foods. The company has raised $1.2 billion over 12 rounds of funding from investors.
The team’s signature Impossible Burger is now served at restaurants ranging from David Chang’s Momofuku Nishi in New York to Burger King outlets across North America. David Lee, Impossible Foods’ Chief Financial Officer, spoke with MarketCurrents WealthNet recently to describe the startups greatest challenges and opportunities in the year ahead.
In your view, what are the biggest challenges to making plant-based meat alternatives mainstream?
It’s always been important to us to make our product as affordable as possible, and more affordable than animal products, given that cost continues to be a top consideration for consumers when purchasing their food. At scale, our products should beat or undercut the cost of meat. As we get larger, we will share our cost reductions with our customers and investors.
Impossible Foods goes to great lengths to be transparent about how we make and produce our products and apply that commitment to transparency to all aspects of the business. That’s why earlier this year we shared the news of our 15% average price cut to distributors on foodservice products, and we published the prices for direct sales—not the prices distributors charge.
The price cut reflects the core mission of Impossible Foods to be competitive against ground beef from cows on taste, nutrition, sustainability and cost.
Plant-based meat seems to suffer a perception issue with consumers. How do you hope to tackle this issue?
There’s a phenomenon we call “plant-based anxiety” which describes a person’s reluctance to try plant-based food due to something they tried and didn’t love in the past, like a veggie patty. We tackle this issue by creating great-tasting, craveable products for the meateater.
What differentiates Impossible Foods from other companies is our technology platform and our world-class archive of knowledge of how meat works at the molecular level. Impossible Burger is the product of nearly a decade of basic science and hard-core R&D to understand the entire experience and science behind meat and how it tastes, cooks, sizzles and smells. Our scientists figured out the exact mechanisms by which meat flavor is generated from simple nutrients during cooking, and discovered how to use these simple nutrients to recreate meat flavor just as it happens in meat from animals.
Heme, one of our earliest and most important discoveries, is what gives our burger its unmistakably meaty taste, and allows us to recreate meat flavor using plants just as it occurs in meat from animals. We patented our unique method of producing heme with a fraction of the natural resources in 2017.
About 95% of people who eat Impossible Burger eat animal-derived products on a regular basis, so meat eaters are our target consumer. Impossible Foods makes meat for meat lovers so they don’t have to compromise on taste, nutrition or sustainability.
What is the next big step in Impossible’s journey as an enterprise?
Impossible Foods’s goal is to replace animals as food production technology. Our food tech platform enables us to understand and reverse-engineer many animal products – including meat, dairy and fish – from plants. The goal is to produce a full range of meats and dairy products for every region in the world.
In January 2020, we announced Impossible Sausage and Impossible Pork. We are working on a variety of next-generation products but are not announcing details of our product road map at this time — stay tuned.
In April, we announced a 500% increase in our retail footprint with the debut of Impossible Burger at 777 Albertsons’ company stores, and today we announced an additional 1,700 Kroger stores, bringing our total network to 2,700 locations nationwide. In fact, we expect our retail footprint to expand at least 50-fold in 2020 alone, and we are moving as quickly as possible to expand with additional outlets and in more retail channels.
Do you have any comments for investors interested in learning more about Impossible Foods?
In March, we announced a $500M funding round, bringing our total fundraising to $1.3B since the company’s founding in 2011. This latest Series F round of fundraising helps to ensure that Impossible Foods has the resources to accelerate growth — and continue to thrive in a volatile macroeconomic environment, including the current COVID-19 pandemic. We will certainly use our latest investment to fuel our retail growth.