Plant-based meat companies aren’t trying to target vegetarians, who make up a mere 5% of the U.S. population. They’re trying to get carnivores to diversify their palates.
Impossible Foods, which is sold in 5,000 locations across all 50 U.S. states, is one of the leading players in the space, having forged partnerships with restaurants known for their meat dishes. Higher end restaurants like Momofuku Nishi and fast food chains like White Castle offer the alternative on their menus.
“We wanted you to be able to try it well-cooked. It’s really been a case where everyone throughout the U.S. — both rural and urban locations — have embraced this idea of delicious ‘meat’ that’s crave-able ... but you don’t have to compromise [taste],” Impossible Foods CFO and COO David Lee told Yahoo Finance.
‘It’s the only way a burger can taste like a burger’
Founded in 2011, the company has raised $400 million from investors like Bill Gates, Google Ventures, and Open Philanthropy Project. The company uses a “magic” ingredient called soy leghemoglobin, which was approved by the FDA earlier this year. Soy leghemoglobin releases a protein called heme, which is also found in ground beef.
“It’s the only way a burger can taste like a burger even if it’s from a cow. We found it naturally occurring in plants — and we found a way to make it at scale so it can be affordable and use a fraction of the world’s resources,” he said.
Lee added: “We’re the only ones in the world that not only have an issued patent on the use of heme to make plant-based meat delicious, we’re the only ones that own the strain to make it through fermentation.
“We are years ahead of any competitor even if we didn’t have the patents. And most importantly, we’re the first brand to stand for crave-able meat entirely made out of plants.”
The demand for plant-based meat has surged in lock-step with the growing appetite for non-dairy beverages like almond and oat milks. Retail sales of plant-based foods rose 20% year-over-year to $3.3 billion last year, according to Nielsen data compiled for the Plant Based Foods Association (PBFA). Plant-based meat sales, specifically, were up 24% to $670 million.
‘Our focus is serving this insatiable demand’
Plant-based diets have been trending for quite some time, and they’ve grown to be ubiquitous worldwide. Beyond Meat filed for an IPO last month at an offering size of $100 million — a placeholder that’s likely to change.
While Lee said there’s no IPO to announce just yet, he did share a key metric with Yahoo Finance.
“When you think about our revenue for this calendar year, it has grown eight times. When you think about our revenue for 2019, it’ll be yet another high multiple. So our focus is serving this insatiable demand we’re finding,” he said.
Impossible Foods will focus on direct-to-consumer sales and international expansion in the coming year. The company currently operates in Hong Kong and Macau, with plans for Singapore next.
“We’ve picked global markets that have trendsetters for all of Asia. Asia is 40% of global meat consumption. You’ll see us here in the U.S. — in more and more locations — in restaurants and stadiums, but you’ll also see us in retail. Our focus is to make sure every burger that we sell generates positive gross profit margin to be able to fund the R&D we need. Our approach is also not to run out. We’re not going to rush into a chain — either food service or retail — and disappoint meat eaters because we can’t supply it.”
Melody Hahm is a senior writer at Yahoo Finance, covering entrepreneurship, technology and real estate. Follow her on Twitter @melodyhahm. She hosts Breakouts, a monthly interview series for Yahoo Finance featuring up-close and intimate conversations with today’s most innovative business leaders.