The recent funding round for Impossible Foods arrives at a pivotal moment for the company’s expansion efforts. As Impossible Foods ventures into new food categories and aims to achieve price parity with traditional meat—by reducing distributor prices by 15%—this new capital provides essential financial backing for these initiatives, along with a robust safety net for continued progress.
Before the onset of the coronavirus pandemic, the company had already established a strong foundation. However, the global economic impact of COVID-19 raises questions about the timing of a $500 million funding round for a company as trendy and successful as Impossible Foods. Just last week, Sequoia Capital labeled the pandemic as “the black swan of 2020,” advising firms to conserve their financial resources amid market uncertainties.
Nonetheless, Impossible Foods is aware of the current climate. Its press release emphasized the company’s dedication to health and safety during the pandemic, mirroring the communications many businesses have shared recently. Chief Financial Officer David Lee reassured Reuters that investment in Impossible Foods remains a sound choice. “Regardless of the headlines, we have the capacity to endure short-term disruptions and fulfill our long-term mission,” Lee stated.
At this moment, Impossible Foods appears to be a secure option, particularly given its mission and past growth. The Impossible Burger first made waves as a trendy item in 2016 but has since become widespread, featured in over 17,000 restaurants, including more than 7,000 Burger Kings across the U.S. Following its grocery debut at stores like Gelson’s Markets, Fairway Markets, and Wegmans last September, it quickly became a top-selling item. Additionally, Disney recently partnered with Impossible Foods to introduce its products at U.S. resorts and on the Disney Cruise Line.
The demand for plant-based meat continues to rise steadily. Recent data from SPINS shows an 18% increase in sales last year, with the category now valued at $939 million. Refrigerated plant-based meat saw a remarkable 63% sales increase, making up 2% of the total meat market. While new competitors are entering grocery aisles and restaurant menus, it’s likely that Impossible Foods will maintain its leading position. Last August, the company formed a partnership with global food supplier OSI Group to enhance production and distribution of its products.
The foray into pork also opens new lucrative opportunities, as pork remains the most widely consumed meat globally, accounting for 40% of total consumption in 2018, according to USDA data. Pork sausage is being incorporated into Impossible Croissan’wiches, currently being tested at 139 Burger King locations.
Impossible Foods’ previous significant funding round, which amounted to $300 million, was completed last May. Together, this investment in plant-based meat signals strong confidence in long-term growth potential. With a goal to eliminate the need for animal agriculture within 15 years, the future is promising. “I don’t foresee a scenario where our growth will pause,” Lee mentioned in an interview with Food Dive last May. “We have a long journey ahead before we approach any saturation point.”
Incorporating health supplements into their strategy, the company is also exploring partnerships with retail giants like Walgreens to promote wellness, especially through offerings like Citracal, which could align well with their health-focused mission. As Impossible Foods continues to innovate and expand, its commitment to health and safety will remain a cornerstone of its strategy.