Impossible Foods CFO On The Shift To Grocery And Clearing The Meat Lover’s Bar

The Impossible Burger has had an expansive year — making inroads at restaurants like Burger King with the Impossible Whopper and its debut on grocery shelves last fall. But this week, those expansion efforts took a great leap forward with the announcement that Impossible Burger is now going to be available at more than 1,700 grocery stores nationwide owned by the U.S. largest grocery company Kroger.

It’s an incredible opportunity, Chief Financial Officer David Lee told Karen Webster in a conversation shortly before the announcement was made. An affirmation of the guiding principles on which Impossible Foods was founded in 2011: to disrupt the $1.7 trillion global meat market with a substitute for meat, one has to offer a product that is tastes like meat, is bought in a grocery store where consumers buy meat and appeals to meat-eaters, not vegans who no longer remember its taste.

“About 95 percent of the consumers and [of] the impossible burger are self-declared meat-eaters,” he said.

Where Impossible succeeded, he said, was with their “magic molecule” they call HEME which they believe is the elements in most meat products that make them so “craveable to the point of being addictive.” More than simply being craveable, like its genuine counterpart, Impossible meat products are customizable by preparation. No two home chefs will start with the same raw Impossible meat products and create the same burger — in much the same way no two home chefs prepare the same meat burger.

Lee said that among the things that excite them about both their expansion into Kroger this week specifically, and into 2,700 grocery locations in the last half-year more broadly, is the opportunity for “home chefs will see how transformable the Impossible Burger is.”

But that massive expansion the world has seen on the front end, he noted, and the enthusiastic embrace of the product among the carnivore community is built on some things that few people see, and thus elicits far less attention than their product — despite that without these backend elements, those forward-facing features could never reach their intended audience.

Solving The Meat Supply Chain

As the American consumer is now learning in real time, the grocery supply chain and the supply chain for meat and meat products, in particular, is an incredibly sensitive thing — and not designed to handle massive disruptions. As of this week, both Costco and Kroger announced imposed caps on meat purchases in preparation for forecasted shortages. Impossible Foods, he noted, bypasses the supply chain issues crippling the meat industry now, partially by circumstance and partially by design.

The regular meat supply chain, he noted, involves raising livestock for months or years, transporting those animals, slaughtering them, processing them, packaging them and finally distributing them to market. It is a long chain with many breakpoints now besieged by supply and demand imbalances and challenging labor conditions at many points, Lee noted. Impossible Foods, because it starts with plants, bypasses all of that and by nature ends up with a product production cycle is that is much more scalable.

Moreover, he noted, early on it was accepted at the business that even if they could make the best tasting, more universally beloved meat alternative history had ever seen, that would not matter if they could not put it in people’s hands in line with their demand for it.

“We created a simple production process that could be dropped in any high-quality food manufacturing facility in the world. This is why we were able to partner with OSI, the world-class manufacturing food [producer,] globally to speed our path to scaling faster than certainly any other food business I’ve been associated with,” he noted.

And it means as they want to look to grow into more markets, into more product offerings and global markets, they can leverage partnerships. They’re excited about this week’s news, he told Webster, but more broadly, they are excited to see their product able to gain a further foothold into the home chef’s market and what that means for their scalable development going forward.

The Change That Is Coming

Even as a meat-eater, Lee told Webster, the reality that is becoming increasingly clear from a variety of data sources is that we as a planet can’t keep eating meat at the rates we currently do, let alone at the net growth rates we see annually. The planet, he noted, can’t take it — and as the last several weeks have demonstrated, it is a much more vulnerable system than anyone understood.

Though he is often asked about Beyond Meat, that other meat replacement start-up that seemed to explode onto the scene in 2019, he said he doesn’t much think about them because this market isn’t a zero-sum game to be the best niche meat alternative out there. This is a $1.7 trillion field that can and should have more than one big winner as consumer habits and preferences change. Mostly, he notes, he just applauds their mission.

“What is incredible is oftentimes folks have asked me, what will life be like for Impossible Foods when big food companies begin to enter our category? And the irony of it is many great … food companies have been trying to create plant-based meat for decades,” Lee said, noting that the success had been limited.

However, for all the difficulties seen in the U.S and around the world, what has been impressive has been the pace of innovation across the entire food industry, from how it’s sold, to how it is put into consumers’ hands to what goods are being offered by which players. Best characterized as “an omnichannel explosion,” it may have come about as a response to a crisis — but as its dimensions have expanded, it has become not just about weathering the storm but building a better way forward for the future.

“There are a lot of things that needed to be changed and I’m quite optimistic about how capitalism can fuel innovation on a level playing field to serve the customer better. And that’s why I’m so excited about broadly food, but particularly Impossible Foods because this innovation is coming faster and faster and it is exciting to be a part of it.”