On the faux hoofs of Beyond Meats’ thunderous initial public offering a couple of weeks ago, Impossible Foods yesterday announced it has raised an additional $300 million in financing, bringing the total amount of money it has harvested since its 2011 launch to more than $750 million.
“The fundraising underscores the growing appeal in plant-based food that tries to taste like meat with fewer environmental or health risks. Shares of competitor Beyond Meat Inc., which debuted on Nasdaq on May 2, have more than tripled,” Reuters’ Angela Moon and Joshua Franklin report in breaking the story.
But the company is not in a hurry to go public, CFO David Lee tells them, adding: “We believe in self-reliance. Being ready to go public is a priority for the company because we need to be operating at the highest level of rigor.”
“The principle use of this $300 million is to increase our ability to serve this unprecedented demand we're seeing,” Lee tells Business Insider’s Kate Taylor.
“Impossible Foods menu items, such as its signature Impossible Burger, are sold at roughly 7,000 locations across the U.S. According to Lee, demand at individual locations is rapidly ramping up even as the company rolls items out to more locations. In April, Burger King announced plans to add the Impossible Whopper to menus nationwide by the end of 2019, putting Impossible Foods in 7,200 additional locations,” Taylor reports.
“Both Impossible Foods and Beyond Meat have produced plant-based meat substitutes based on molecular science, with cells created to mimic those of animal protein using plant nutrients. The two companies are offering burgers they say have the same taste and texture as beef. The burgers ‘bleed,’ with Impossible using ‘heme’ -- a protein created by its scientists through genetic engineering and yeast fermentation -- and Beyond Meat using beetroot juice,” writes Emiko Terazono for Financial Times.
There’s seems to be a certain cachet about it all in the entertainment world, if Impossible’s press release is any indication.
“In addition to investment from institutional investors like Khosla Ventures, Microsoft co-founder Bill Gates, and Google Ventures, celebrities chipped in. The company lists Jay Brown, Kirk Cousins, Paul George, JAY-Z, Trevor Noah, Alexis Ohanian, Kal Penn, Katy Perry, Questlove, Ruby Rose, Phil Rosenthal, Jaden Smith, Serena Williams, willi.i.am and Zedd as individual investors,” Ellen Fort writes for Eater San Francisco.
But the trend is more than merely trendy.
“Sales of plant-based products grew by more than 17% last year, according to Nielsen, while other grocery products only grew by 2%,” CNBC’s Aditi Roy reports. “Burger King’s biggest competitor, McDonald’s, does not offer a veggie burger in its U.S. stores, although its German locations started serving Nestle’s plant-based option last month,” she continues.
“We’ll tell them to take a number and … you know we’re not going to blow off customers. First things first, we have to deliver for our existing customers,” Impossible Foods CEO Pat Brown tells Roy when he’s asked what will happen if McDonald’s “comes knocking.”
Both companies are, of course, going against deeply engrained preferences and habits.
“There’s a lot wrong with our food system -- from animal cruelty to antibiotic resistance to its contributions to climate change. But people really like meat, and efforts to curb these problems by convincing people to switch away from meat haven’t worked well. There are about as many vegans and vegetarians as there were 20 years ago,” writes Kelsey Piper for Vox.
“That’s where plant-based meat alternatives can step in. Products like veggie burgers, fake chicken, soy milk, and almond milk are growing in popularity and market share -- and even better, they’re getting tastier and harder to distinguish from animal products,” Piper adds.
Beyond Meat CEO Ethan Brown’s 2017 “How I Built This” interview with NPR’s Guy Raz is worth a listen. In it, Brown talks about overcoming the doubts of early skeptics (such as his wife), as well as acknowledging that it’s a losing battle to convince most people that eating meat is bad.
“It starts with a perception issue. So my argument is that this is meat,” he says about 19 minutes into the podcast. “It’s just meat that comes from plants. … We don’t talk about people not eating meat. I don’t think it’s a good idea to build a brand telling people not to eat what they love.”