As a private company, San Francisco-based Impossible Foods has not faced the same level of public scrutiny as beleaguered rival Beyond Meat. But given the jaw-dropping sums (almost $2 billion) pumped into the startup over the past 12 years, the pressure to deliver is intense.
So how is it performing?
“Pretty darn well,” against the backdrop of weakening retail category sales, negative media sentiment and inflationary pressures, claims CEO Peter McGuinness, who won’t share any hard numbers, but says Impossible’s retail sales are up in a declining market.
It’s also safe to assume the brand is doing something right in the foodservice arena given that it has retained its spots on the menu at Starbucks, Burger King and White Castle, points out McGuinness, a former ad executive who took the helm at Impossible in April 2022 after several years with Greek yogurt giant Chobani.
But with some commentators questioning whether we have already reached peak ‘alt meat,’ what do Impossible and other key players in alt meat need to do to reach a broader audience?
In our 20-minute conversation recorded above, we covered:
- Impossible Foods’ performance.
- Is an IPO on the cards?
- Merchandising plant-based meat.
- Do we need a ‘Got Milk’ campaign for meat alternatives?
- What messaging around plant-based meat resonates with a broader audience?
- How is Impossible Foods transitioning from a tech company to a ‘tech-enabled food company?’
- What happened to Impossible milk?
- Does Impossible’s flagship ‘heme’ ingredient (the focus of a legal battle with Motif FoodWorks) give it a meaningful edge over the competition?
- Have we already reached ‘peak’ alt meat?
Performance: “I’m not going to sit here and pretend everything’s perfect. We have our challenges. Our competition has its challenges. But I think we’re faring pretty darn well, all things considered. I’m happy with our performance. I’m happy with the team… Retail is strong, and we continue to gain distribution.
“In the 52-week Nielsen [data] we’re still growing high single-digit, low double-digit in retail, which is great. We have a 50% repeat [rate]… so every two people we get to try our product, one repeats, which is quite strong.
“In foodservice, we’re celebrating five years with White Castle, four years at Burger King, four years at Starbucks. We have these anchor wonderful accounts and we’ve had them for years and there’s no real sign of slowing down or stopping… which is a testament to [our] performance and execution.”
Building demand, driving awareness: “We have 15% household awareness, so 85% of the country hasn’t heard of us, and you can’t buy what you haven’t heard of. We did our first ever marketing campaign in June and July, in 11 years. It takes time to build a brand, but awareness leads to trial; trial leads to repeat.
“The one thing I want to say is we need to create demand. The whole notion of ‘build it and they will come,’ put it on the shelf and it’ll sell itself, was a false premise. And I think we and everyone else in the category proved that wrong, the hard way. Demand is something that needs to be created day in and day out. We need to be on weekly shopping lists. That’s not a new concept for food; food companies do it all the time.”
Merchandising meat alternatives: “Placement is all over the place, and not in a good way… We have a shelf invisibility problem and it’s not just Impossible, it’s a category thing. We like being in [the] refrigerated [section] right next to animal burgers, and we have the velocities to keep it there, even though [the overall fresh plant-based meat category is] declining… [due to] products being in there that don’t have the same performance level as we do.
“We like it in frozen too because frozen purchases are up. But it’s bifurcating our brand. You have beef in frozen and beef in fresh and you don’t have tremendous scale in either; you may only have a couple of SKUs in each section.
“So my solution is more distribution… the first thing is to get that shelf block so that you’re visible that you’re a beacon that can be seen… and so I think plant-based and Impossible merit and warrant more distribution.
“The other thing is we’re working on is new packaging that will be much more breakthrough, much more visible, that will pop more on shelf. We’re also working on new display, merchandising, and point of sale materials. Some of these things sound so basic, but the category is so new and Impossible is so new at retail. We didn’t have a robust retail execution team and program.”
What is your priority as CEO? “We will innovate like a tech company, but we’re going to operate like a food company. And that battle is won or lost at the store, on the shelf. It’s about building out a retail execution team. It’s about getting more display, getting more merchandising, really going at point of sale material in a big big way. At the same time, we’re going to do marketing campaigns to build awareness.
“But the focus at Impossible is demand creation, I’m going to be very clear about that. We have chicken, beef and pork… [spanning items for] breakfast, lunch, dinner, with 40 SKUs and we’re going to continue to improve taste, texture, flavor, and nutrition. We’re not going to go into new categories. We’re focused on the categories we’re in.”
The new Impossible Indulgent Burger: “That came from requests from foodservice people… restaurants said look, we have these great burger builds and we’re charging a good amount of money. That quarter pounder was getting lost in the build. Can you make me something bigger, juicier, a little bit more premium, because people are not going out to restaurants, throwing down a bunch of money, for health, or to compromise.”
Impossible Milk, eggs, cheese: “We’re not focused on them and we don’t have plans to pursue them in the future. We’re focused on chicken, beef, and pork with 40 SKUs and all day-parts covered. We don’t need any more SKUs. Let’s just execute on [what we already have].”
Marketing meat alternatives: “I think the category was not launched in the best possible way. It was launched against the cattle industry. And, you know, no one wants a civil war in America. It was against things, not for things. We kind of insulted the very people we wanted to have try our product… You don’t vilify people, you don’t judge people; you invite people to try your products. And so this became political a little bit if I’m being honest. It became bicoastal, elitist and academic.
“It’s like ‘Don’t mess with my frickin’ burger… I had a rough week, the kids are crazy, my boss is mean, and I’m just trying to have a burger and a beer and you’re trying to get all political on me,’ right? Let’s just be a great burger that people will enjoy. And if you want to put [dairy] cheese on it, put cheese on it. You have it your way… whatever it’s going to take to encourage people to eat more.
“We need to tone down that rhetoric. This is business. We’re making good food and we want to make it available to everyone.
“The upper funnel broad way to build the brand and drive demand is not through climate change messaging, there’s just not a mass of people that care right now, and [as an industry] we shouldn’t be defensive about that. It’s just the way it is. So what I want to do is make a delicious product where you’re not compromising vs the animal product, and I want it to be super good for you, because people care about themselves. Listen, if my health isn’t good, the last thing I care about is the planet’s health.
“And by the way, it’s not a binary black and white thing. When you look at people’s fridges, they have oat milk and dairy milk; they have animal meat and Impossible beef. If you have five burgers a month, and one becomes plant based, the category would grow 100% over the next five years.
“This is about inviting people to try and incorporate [plant-based meat into their diets]; it’s not about you better only eat plant-based meat and if you don’t, you don’t care and you don’t get it.”
Pricing: “People got it wrong when I first started, everyone was like price, price, price. We took price, Beyond Meat took price [and] didn’t see [an increase in] volume. It’s about value, it’s about the value proposition, which has to start with delicious food, no compromise.”
IPO? “We’ve raised a lot of money… and we’re well capitalized, so we don’t need to go public right now. And thankfully so, because the markets aren’t the best. A lot of companies are not in our position where we don’t have to fundraise right now and we don’t have to have any [liquidity] event right now.”
Have we already reached peak alt meat? “I think [the addressable market] is billions and billions if it’s packaged and positioned right. We want to package and position it and make it available for everyone. It should show up at county fairs and baseball stadiums and football tailgates.”
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