August 5, 2021 8:00 AM
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3
 min

Impossible Foods

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Impossible Foods is an American manufacturer of plant-based artificial meat. The company was established in 2011. In 2016, the company introduced its first development, an Impossible Burger-branded artificial beef burger cutlet, which until 2019 was only supplied to restaurants. The product has received high recognition and great popularity due to the similarity of artificial minced meat cutlets with a real analogue, both in taste and physical parameters. The secret to the success of this artificial beef cutlet is its unique food technology. Impossible Foods has managed to develop a special protein (blood heme) that is similar in texture and taste to an animal. This protein was obtained from the roots of soy plants. The main problem in replacing animal heme with vegetable heme is the low content of this molecule in soy. Impossible Foods solved this problem with another technology, namely by crossing plant heme with a yeast of the species Pichia pastoris, which allowed to multiply the production of plant protein. In 2018, the FDA declared heme to be safe to eat.

Until 2019, Impossible Foods only sold its produce to restaurants. For example, the global fast food chain Burger King has launched the Impossible Whopper, Burger King's flagship burger made from Impossible Foods. The main product of the company - Impossible Burger - is already sold in 9 thousand restaurants and is a hit in many of them. Since 2019, the company has increased its revenue by 50% due to the expansion of supplies to supermarkets and the improvement of the product line. Over the past year, Impossible began selling its products at 1,700 Kroger-affiliated stores, 2,000 Walmart stores and 1,200 Publix stores throughout the United States. In May 2020, the company began active sales of its products through digital channels.

In May 2021, Impossible Foods began shipping its produce to school canteens. This is definitely great news, as in order to enter into contracts with educational institutions, the company's products had to pass examination and quality control by the Food and Nutrition Service of the United States Department of Agriculture. This is likely the final step the company is taking to expand its presence and generate interest in plant-based meat from its own production. By delivering its products to schools, Impossible Foods builds loyalty among a young audience that is concerned about environmental pollution. Impossible Foods says its primary goal is to attract meat lovers, rather than vegetarianism, to its products to help reduce the environmental impact of beef and other meats.

According to various estimates, the global meat market can be estimated at $ 1.4 billion. Currently, the alternative meat industry occupies only 1% and is estimated at $ 14 million. According to experts, in 2029 the share of artificial meat in the total meat market may exceed 10% even without considering growth of the industry as a whole. Impossible Foods' main competitor is Beyond Meat (BYND), which went public in 2019. On the first day of trading, the company's shares more than doubled. The company's value at that time was estimated at $ 3.4 billion. Now BYND's capitalization is $ 7.8 billion. Since the IPO, BYND shares have grown by 400%.

Impossible Foods raised $ 1.6 billion in 16 investment rounds. The last round took place in August 2020, and at that time the company was valued at $ 4.1 billion. Thus, the capitalization of Impossible Foods was almost 2 times lower than that of Beyond Meat. Among the key investors in Impossible Foods, one can distinguish both world-famous venture funds such as Google Ventures, Horizon Ventures or UBS, as well as popular personalities - Katy Perry, Jaden Smith, Jay-Z and Bill Gates have already invested in the company.

The main risk of investing in a company is competition with traditional meat producers. The largest global players will make every effort to prevent the expansion of the market share of alternative meat, including through lobbying mechanisms. However, the uniqueness of Impossible Foods' technologies, combined with the global environmental agenda, will help the company find its market niche and steadily expand it through massive consumer acceptance.


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