Speaker 1: I'm Bethany McLean. This is making a killing in this show.
Speaker 1: I cut through the hype and handwringing to reframe the
Speaker 1: stories you thought you understood and uncover the ones you
Speaker 1: didn't know were important. I love industry makers. No one
Speaker 1: sees a new industry coming and then seemingly overnight, it's
Speaker 1: a way of life. The iPhone was an industry maker
Speaker 1: for mobile smartphones. The Prius was an industry maker for
Speaker 1: hybrid cars. You can argue Elon Musk's Tesla was an
Speaker 1: industry maker for electric cars, and so on. It seems
Speaker 1: to me that there's always a cycle. After a few
Speaker 1: false starts from two early inventors, we get that one
Speaker 1: company that blows us all away and makes a new industry. Then,
Speaker 1: as fast as you can say knockoff, there are competitors,
Speaker 1: fierce competitors. After this hunger game style elimination period, the
Speaker 1: strong remains standing and make themselves part of our everyday existence.
Speaker 1: I have with me today, Mark Rampola, who has been
Speaker 1: at the forefront of not one, but two industry making companies.
Speaker 1: The first was his own company, Zico Coconut Water, which
Speaker 1: berthed in eight billion dollars alternative beverage coconut water industry.
Speaker 1: His book High Hanging Fruit tells the whole dramatic story.
Speaker 1: The next was Beyond Meat, where Mark has been involved
Speaker 1: as an investor rather than as a founder or CEO.
Speaker 1: Beyond Meat is the poster child for the plant based
Speaker 1: food revolution. I knew we had reached peak alt meat.
Speaker 1: Not when Beyond Meat had a monster IPO in May
Speaker 1: of twenty nineteen, but when a few months later Duncan
Speaker 1: Donuts rolled out the Beyond Sausage plant based breakfast sandwich
Speaker 1: in partnership with Beyond Meat. Then came the Impossible Burger.
Speaker 1: Even long established Tyson Tyson has come out with raised
Speaker 1: and rooted plant based nugget. Oh, and then there's Kellogg's
Speaker 1: morning Star Farms, which has announced a line called, wait
Speaker 1: for it, incog Meato. I can't decide if that's clever
Speaker 1: or just awful, but giggles aside, and let's say they're
Speaker 1: serious money and plant based alternatives. Currently, the market is
Speaker 1: fourteen billion dollars in the US, and Berkeley's estimates that
Speaker 1: it could balloon to one hundred and forty billion in
Speaker 1: the next decade. Mark has unique insight into what it
Speaker 1: means to be the pioneering brand that then quickly gets copied.
Speaker 1: Is there such a thing as first mover advantage? And
Speaker 1: if so, how do you hang onto it? And our
Speaker 1: meat alternatives really the way of the future. I'm recording
Speaker 1: this here in the home of the In and Out Burger, California,
Speaker 1: and I'm delighted to have Mark here with me. So
Speaker 1: what's it like, Mark, to be at the vanguard of
Speaker 1: a new industry for the second time. I really hadn't
Speaker 1: thought about it that way, and it's pretty amazing to
Speaker 1: be a part of that. When I first started launching Zico,
Speaker 1: it was just a coconut water. I had no idea.
Speaker 1: I had some dreams, some hope, some asspirations, but I
Speaker 1: had no idea. When I look back and think that
Speaker 1: it's now an eight, probably ten billion dollar global category,
Speaker 1: it's absolutely amazing and beyond meat. Similarly, it's an amazing
Speaker 1: story to be a part of this whole plant based revolution.
Speaker 1: So did you see it this time because of your
Speaker 1: experience with Zicco, did you see that beyond me it
Speaker 1: was going to be creating this industry making revolution. Is
Speaker 1: it different in that respect or was it just this
Speaker 1: is a great product it is. It's a little different
Speaker 1: I think experience during that period of having started Zco
Speaker 1: and then invest in Beyond Meat through my fund power
Speaker 1: Plant Ventures, I'd looked at a couple of thousand companies,
Speaker 1: and so I think developed a couple of thousand. Wow. Yeah,
Speaker 1: we look as a fund about one hundred a month
Speaker 1: new upstart, early staged food and beverage, food service, food
Speaker 1: tech companies. Okay, so you have to pause on that
Speaker 1: without divulging any competitive information, can you give me a
Speaker 1: feel for the weirdest idea you've heard, for the most
Speaker 1: revolutionary Yeah, so some people are really fanatical about this,
Speaker 1: but the whole insect side of things, right, I'm not
Speaker 1: buying it yet. I'm not chewing on it yet. I'm not.
Speaker 1: It's Look, it's interesting, right, there's a lot of parallels.
Speaker 1: People do eat them all across the world, all sorts
Speaker 1: of reasons. There's an environmental reason, there's a social impact reason.
Speaker 1: But at this day and time, I don't think Americans
Speaker 1: are ready for it. And so that's a little out there,
Speaker 1: and we've seen some ones that are that are pretty
Speaker 1: odd and that you have passed on. Okay, how did
Speaker 1: Beyond Me it come to you and what made you
Speaker 1: say yes? This so a couple of things. One my partners,
Speaker 1: actually empower Plant, had known Ethan Brown, the founder, from
Speaker 1: day one and had an opportunity to invest. They passed
Speaker 1: because they owned a restaurant chain called Veggie Grill and
Speaker 1: viewed it as sort of a conflict of interest. It's
Speaker 1: one of the reasons we started the fund. I was
Speaker 1: seeing a lot of deals that we thought were interesting,
Speaker 1: and so Ethan was always on our radar. He was
Speaker 1: an extraordinary founder, and that's paramount for us. We always
Speaker 1: look for the individual. You know, great founders build great companies.
Speaker 1: Rarely do great companies just happened, and so Ethan was
Speaker 1: a winner from the beginning and his co founder. But
Speaker 1: we didn't have a fund up in running. They went
Speaker 1: out and raised money, and when we finally had our
Speaker 1: fund up and reading and got a look at it,
Speaker 1: we knew this was really interesting, particularly because they had
Speaker 1: a number of products on the market that were good
Speaker 1: but not great, and they were doing okay and whole
Speaker 1: foods in other places, but not exceptional. But when they
Speaker 1: rolled out what they called the Beyond Burger, we knew.
Speaker 1: The way we knew was we have relationships at Whole
Speaker 1: Foods were in the stores. We have people that we
Speaker 1: know at the stores and through Veggie Grill. Veggie Grill
Speaker 1: was the first place that they sold the Beyond Burger,
Speaker 1: and we also literally saw the first week of sales
Speaker 1: in Whole Foods. That first week it became the best
Speaker 1: selling product in the whole store seriously and the whole
Speaker 1: Tire store right and Veggie Grill. In the first month
Speaker 1: that they rolled it out, it single handedly brought I
Speaker 1: think double digits same store sales growth. You ever, and
Speaker 1: why what made the Beyond Burger so beyond? I think
Speaker 1: it's a couple of things, a couple of vectors that
Speaker 1: came together to make this happen. Still, the statistics are,
Speaker 1: you know, maybe two to three percent of the population
Speaker 1: is true hardcore vegan. I think in general, there's moved
Speaker 1: into the zeitgeist, this plant based plant forward understanding to
Speaker 1: have more plants, you know, have meatless Monday. That sort
Speaker 1: of has happened much more broadly than just Beyond meeting
Speaker 1: that's probably been building for thirty years on three key areas.
Speaker 1: One is, so I think there's this a general awareness
Speaker 1: about health and wellness and how particularly unhealthy, highly processed
Speaker 1: meets play a negative factor in that. The other is
Speaker 1: environmental and certainly humanitarian reasons, right, So those three are
Speaker 1: coming into more common thinking, particularly among millennials. And the
Speaker 1: product was very different. Think what you want about it.
Speaker 1: Relative to nine percent of all the veggie birds that
Speaker 1: have ever been on the market. It's a very different experience.
Speaker 1: And you know, they're never going to compete with a
Speaker 1: Kobe beef burger, but relative to a lot of the
Speaker 1: crap that's on the market in McDonald's burger King and
Speaker 1: every college campus in high school around the country, those
Speaker 1: hamburgers are crap. What's the breakthrough? What makes the burger
Speaker 1: so different? What they did is they applied existing technology
Speaker 1: something it's called extrusion technology. It's used in a lot
Speaker 1: of food processes used in other arenas, but had never
Speaker 1: been really applied to something like plant proteins. And so
Speaker 1: they use very available plant proteins, predominantly p but they
Speaker 1: can use other feedstocks, and they process it in a
Speaker 1: way it sounds a little gross, but it's almost comes
Speaker 1: out like a meat grinder. Would you know where you
Speaker 1: get this this raw material that can then be formed
Speaker 1: into burgers and so you know, there's some food signs
Speaker 1: in there and engineering. A lot of chefs have been
Speaker 1: involved in creating that, and they brought something that's really amazing.
Speaker 1: And I think, for example, my wife has been plant
Speaker 1: based for twenty years. You know, she had it and
Speaker 1: she's like, yeah, I don't miss meat. I do. I've
Speaker 1: only been plant based for a few years, and so
Speaker 1: for me to get that sort of sensation and that
Speaker 1: feeling and be able to have a burger is something
Speaker 1: I miss. So that's the core thing, am I right?
Speaker 1: That makes what's going on now different than what's come before,
Speaker 1: and that what's come before veggie burgers catering to people
Speaker 1: who are already vegetarian. This is a huge expanse of
Speaker 1: the market because this is a burger that is aimed
Speaker 1: at people who are meat eaters and want something that
Speaker 1: is comparable. And so suddenly you're going from niche to
Speaker 1: every day? Is that the right idea? And I'll tell
Speaker 1: you specifically something that was fascinating when they first rolled
Speaker 1: out that product. Ethan and Seth Goldman that became chairman
Speaker 1: of the board, were adamant, we want this in the
Speaker 1: meat section of the stores. Oh really, They went to
Speaker 1: retailers and literally said, we will not sell it to
Speaker 1: you unless he goes right next to meet Wow. What
Speaker 1: was it like to try to convince retailers to do that?
Speaker 1: Because I'm always interested in this gap if you will,
Speaker 1: between great idea wow, But then the dirty work of execution,
Speaker 1: right or the gritty work is a better word than
Speaker 1: dirty work of execution. The first thing they did is
Speaker 1: they built a team that was extraordinary. So they built
Speaker 1: the sales team that had done this in the past
Speaker 1: with other categories, understands the way retailers think, what metrics
Speaker 1: they want to see, how to communicate with them. And
Speaker 1: I don't recall the exact details of the story, and
Speaker 1: I'm not sure I know all the details as an investor,
Speaker 1: but what my recollection is the way typically a company
Speaker 1: would do this is you sit down with Whole Foods,
Speaker 1: maybe a target, maybe a safe way, and you say, look,
Speaker 1: this is what we're trying to achieve, do you want
Speaker 1: to get behind it. Whole Foods has a history of
Speaker 1: sort of being a leading edge, so typically they'll take
Speaker 1: a risk. And so the team went in and said
Speaker 1: the Whole Foods, look, if we're going to do this,
Speaker 1: we want to do it big. It's got to be
Speaker 1: right next to meet it's disruptive, and Whole Foods took
Speaker 1: that risk. And once Whole Foods took the risk and
Speaker 1: you had data that you could share with other retailers,
Speaker 1: then literally the conversation is, mister retailer, do you want
Speaker 1: the product or not? Some retailers held back. There's some
Speaker 1: major retailers in the country that were late to the
Speaker 1: Beyond Burger because they didn't want to put it. They
Speaker 1: wanted to put it in the frozen section or in
Speaker 1: the veggie burger section. And what was fascinating is I
Speaker 1: know that there were hardcore vegans, sort of the vegan
Speaker 1: mafia people say that we're furious with Beyond Meat because
Speaker 1: they said, I don't want to go near that section.
Speaker 1: I don't want to shop in that area. And to
Speaker 1: think that talk about like somebody that wants to change
Speaker 1: the world yet is worried about their own uncomfort zone
Speaker 1: versus the impact they can have to get meat eaters
Speaker 1: to eat this. There's a hypocrisy and that isn't there.
Speaker 1: That's interesting, but that was also brave on Beyond Meat's
Speaker 1: part to take the risk of alienating what would have
Speaker 1: been a very safe and secure core consumer in order
Speaker 1: to say no, no, no, we're going after the world
Speaker 1: and we're changing the world, right. I mean, there's real
Speaker 1: bravery associated with nowed it. We infuriated a lot of
Speaker 1: early Bickram yoga fanatics when we started to sell Zeco everywhere,
Speaker 1: like sort of by definition with these early adopter there's
Speaker 1: rid exceptions like perhaps the iPhone right right where by
Speaker 1: and large, these products, these categories are built by early
Speaker 1: adopters and sort of by definition, the early adopters onto
Speaker 1: the next thing, right, and so often that's the trend
Speaker 1: that happens. So is this a case of technological advancement?
Speaker 1: Is that modern technology that enables something like the beyond
Speaker 1: Burger to be produced? Or was the technology over always
Speaker 1: there and nobody had just thought about doing it this
Speaker 1: way or conceiving of it in this way the ladder.
Speaker 1: There's no earth shattering crazy new technology there. What is unique,
Speaker 1: and we're seeing this across a lot of the companies
Speaker 1: we look at is applying a tech mindset to food.
Speaker 1: And there's a lot of pluses of that, and there's
Speaker 1: some negatives, but there is a general sense that anything's
Speaker 1: possible if you put time and effort in good brain
Speaker 1: power behind it that you can come up with innovative
Speaker 1: solutions that you start with a consumer and sort of
Speaker 1: work backwards on how to solve a problem. A lot
Speaker 1: of those mindsets are really only in the last ten
Speaker 1: years or so applying in the food and we're seeing that.
Speaker 1: We're seeing One of our biggest fans or sort of
Speaker 1: supporters is the director of alumni affairs for Stanford, who
Speaker 1: came to us and said, something's going on here because
Speaker 1: ten years ago, all my top students that wanted to
Speaker 1: be entrepreneurs went in the tech. Now they all want
Speaker 1: to go in the food and it's all plant based, Like,
Speaker 1: what the hell's going on? Yeah, how long ago is that?
Speaker 1: But that's fascinating, fascinating, So you have this whole new mindset.
Speaker 1: So that's the mindset is. You know, Ethan's a wicked
Speaker 1: smart guy. Ethan Brown born ten or twenty years earlier,
Speaker 1: probably would have gone into tech, and he's going into
Speaker 1: a version of tech he is he has or gone
Speaker 1: into social impact. He's a radical, you know, animal rights
Speaker 1: activist or not the nonprofit world. But in today's day
Speaker 1: and age, there's an opportunity to sort of bridge those
Speaker 1: gaps and make a real impact through business. Before we
Speaker 1: move on, you mentioned the positives and the negatives of
Speaker 1: this ability to process plants in a different way, and
Speaker 1: that is one of the criticisms I've heard of this plan,
Speaker 1: or one of the marks of skepticism I've heard about
Speaker 1: this plant based industry, which is, wait, how does this
Speaker 1: go with the notion of an unprocessed lifestyle if these
Speaker 1: things are so heavily processed, and is that what you
Speaker 1: mean by trade offs? And how do you think about that? Absolutely? So, Look,
Speaker 1: what I'm very clear on and hope to work to
Speaker 1: myself and for our world, is that we get as
Speaker 1: close as we can to the plants, weed, that they
Speaker 1: are in clean, healthy soil, that is in a regenerative format,
Speaker 1: that the whole system is thoughtful about the soil, the forest,
Speaker 1: the ocean, and we are consuming food that is as
Speaker 1: nutrient dense and close to the source as possible. That's
Speaker 1: the solution. That's the healthiest way to live. Barn One.
Speaker 1: The reality is I don't eat that way. I have time, money, capability,
Speaker 1: I have and tried to garden for my entire life.
Speaker 1: And the reality is, how often do I do it
Speaker 1: half my eating that way of a fast paced life.
Speaker 1: I'm moving, and so the reality is we make those compromises.
Speaker 1: And so you know, Ethan Brown actually talked about this recently,
Speaker 1: I think it was I think it was Chipotle had
Speaker 1: refused to bring them in at least this was as
Speaker 1: a few months or a year ago or so. One
Speaker 1: of the comments was, well, it's too highly processed, right,
Speaker 1: And Ethan's retort was something like, yeah, have you been
Speaker 1: in an industrialized meat facility lately? Go in one of
Speaker 1: those if they even let you in the door, and
Speaker 1: then come in my plant and let's talk, because the
Speaker 1: reality is, yes, relative to a fresh picked squash and
Speaker 1: grinding your own lentils into a homemade veggie burger, like,
Speaker 1: of course, that's always going to be better relative to
Speaker 1: probably make some enemies on this. I'm not going to
Speaker 1: try to use specific names, but there's a few big
Speaker 1: food service companies that sell these patties that are everywhere
Speaker 1: right there, every college, high school, most fast food restaurants
Speaker 1: use these frozen patties that are not food. The amount
Speaker 1: of meat in them is questionable. The fillers the way
Speaker 1: they do that. Then you start to work your way
Speaker 1: down the meat supply chain. How are they treated, what
Speaker 1: kind of antibiotics are they pumped with? Where they raised?
Speaker 1: Then you talk economically, we're subsidizing the water, we're subsidizing land,
Speaker 1: we subsidize the corn that is a disaster. So you're
Speaker 1: talking about, in my mind, is a massive relative improvement.
Speaker 1: It's massive. Now. My recommendation with people it is, have
Speaker 1: it once a week, you know, have it occasionally, right,
Speaker 1: Substitute a hamburger, occasionally, substitute some fish occasionally. For this,
Speaker 1: it's a it's a delightful, healthy alternative relative to other
Speaker 1: things on one's journey to a better way of eating.
Speaker 1: That's so interesting. I think a lot about this of
Speaker 1: relative versus absolutely does something need to be perfect and
Speaker 1: solve every single problem out there? Or does it just
Speaker 1: need to move us in the right direction? Progress not perfection,
Speaker 1: Progress not perfection. I like that line on that note.
Speaker 1: Is the product as good as it could be? Yet
Speaker 1: is there room for more improvement? Can you make the
Speaker 1: beyond burke or even better? Yeah? Absolutely. I Mean these
Speaker 1: guys are tweaking day in and day out, and I
Speaker 1: think making major improvement. I know they're looking at alternative
Speaker 1: protein sources. We as a fund are working closely with
Speaker 1: them to actually use credible data to measure and think
Speaker 1: about their impact. Is you want to talk about things
Speaker 1: like carbon emissions, water utilization, land utilizations, there's no comparison.
Speaker 1: You're talking one hundred x improvement with something like that,
Speaker 1: but they're going beyond that. What's interesting is that the
Speaker 1: traditional meat industry has had a response to this that
Speaker 1: is unlike what the dairy industry did in the sense
Speaker 1: that the dairy industry didn't see this coming right and
Speaker 1: they've lost share to these alternative milk products and been
Speaker 1: caught flat footed, and the meat industry is responding differently.
Speaker 1: Do you think they learned a lesson from dairy? I
Speaker 1: have the good fortune to engage with a number of
Speaker 1: very very very senior executives at many of the food
Speaker 1: beverage companies, including some of the meat companies. They're rational,
Speaker 1: smart people. Most of them want to do the right
Speaker 1: thing and are trying to figure out how to navigate it.
Speaker 1: You know, they have a shareholder base, they have self interest.
Speaker 1: All those things are aligned, and I think they're rational.
Speaker 1: They recognize and see these trends and are afraid of
Speaker 1: getting caught flat footed, and so yeah, they've seen other
Speaker 1: industries blow up, other companies blow up, and I think
Speaker 1: they know it can happen to them too. Do you
Speaker 1: ever get out there and taste competitors products, just in
Speaker 1: knowing you're not an investor anymore? But I mean, if
Speaker 1: you eat a beyond Burger, can you tell it's not
Speaker 1: an impossible burger? Can you absolutely? And you can tell
Speaker 1: it's not an incognito whatever? Whatever? Okay, those couple ones,
Speaker 1: at least they're pretty distinct, and distinction is good. And
Speaker 1: you know, one of the points, one of our thesis
Speaker 1: in general is competition builds categories. Right, it's you know,
Speaker 1: beyond meat. A loan would not be where it is
Speaker 1: if there wasn't impossible. That's just how these things work,
Speaker 1: because one spurs the other to be better, to do better,
Speaker 1: and people talk about it. They compare retailers here about
Speaker 1: a consumers reporters. Everybody's talking about it. It sort of
Speaker 1: creates this hype in interest and they support each other's
Speaker 1: funder compete, and it just sort of creates an ecosystem.
Speaker 1: Back to this notion with Zico, you did eventually sell
Speaker 1: to Coke Beyond me. It's took an investment from Tyson, right,
Speaker 1: and so did you think and then Tyson ended up
Speaker 1: selling and launching its own competitive product. How did you
Speaker 1: think about that? Help them navigate that based on your experience,
Speaker 1: What are the pros and cons of letting your monster
Speaker 1: competitor into what you're doing, knowing that they can then
Speaker 1: take that and go off and do their own thing.
Speaker 1: It's a very delicate balance. And to be really clear,
Speaker 1: our role, in my personal role and beyond me, it
Speaker 1: has been relatively minor, you know, very very close with
Speaker 1: Seth and Ethan, but they've got some great counsel on
Speaker 1: our great advice. But I'll tell you the way we
Speaker 1: generally approach this with a variety of companies and the
Speaker 1: kind of conversations we had with them, which is, look,
Speaker 1: ultimately it's about where you're going, what's your individual and
Speaker 1: company mission and objective, and how do you define success.
Speaker 1: So we encourage entrepreneurs to be comfortable with the fact that, look,
Speaker 1: do you want to grow this and run this forever
Speaker 1: and pass it down to your kids? Do you want
Speaker 1: to scale across the world. Do you want to make
Speaker 1: some money, retire and go start a nonprofit? Do you
Speaker 1: know what do you want? What do you want to
Speaker 1: get out of this? And I think Ethan had a
Speaker 1: big vision for this from the beginning. He wanted to
Speaker 1: change the world. And so given that and given the
Speaker 1: industry and the way they were operating, it was going
Speaker 1: to take a lot of capital. And so they raised
Speaker 1: a lot of money from some big professional investors, and
Speaker 1: we felt fortunate to be able to support multiple times
Speaker 1: along the way. But this Tyson conversation, along with other strategics,
Speaker 1: is a delicate one. Yes, Typically, if an entrepreneur is
Speaker 1: expecting that relationship to solve all their problems, they're wrong.
Speaker 1: So it's not their expertise. Rarely can they bring that,
Speaker 1: And rarely do entrepreneurs have the capability or sophistication and
Speaker 1: know how to manage that right. It takes a very
Speaker 1: sophisticate entrepreneur to understand the way a corporation works and
Speaker 1: how to garner resources and engage. So every major food
Speaker 1: company on the planet right now is at this world
Speaker 1: trying to decide if they're in it. Does it make sense?
Speaker 1: Should they be in it? They have the right to
Speaker 1: be in it. Can they pull it off? They're all
Speaker 1: looking at it. It's a complicated set of issues and
Speaker 1: nuance that you then have to decide sort of pick
Speaker 1: your path forward. You tell me how unique this is.
Speaker 1: But one fascinating dynamic to this industry to me is
Speaker 1: you almost want your competitor's products to be really good.
Speaker 1: Because if what you're trying to do is not go
Speaker 1: after a niche, but you're trying to change the way
Speaker 1: people think, mainstream consumers think about plant based alternatives, then
Speaker 1: you want everyone who picks up a plant based alternative
Speaker 1: to have a really good experience with it, because then
Speaker 1: they're a potential, they're a new customer. Whereas if they
Speaker 1: have a bad experience, even with a competitor's product, they
Speaker 1: may say, yeah, not doing this again. You kind of
Speaker 1: want your competitor's products to be good. Maybe not quite
Speaker 1: as good as yours, but good, right am I right
Speaker 1: about that? You, my friend, have the intuition of an entrepreneur,
Speaker 1: and this is something very few people get. I run
Speaker 1: into entrepreneurs that say, oh, our competitor's products are crap.
Speaker 1: Ours is so much better, And the first thing goes
Speaker 1: through my mind. Sometimes I tell them this, sometimes I
Speaker 1: don't is first of all, don't disrespect anyone there's no
Speaker 1: reason to do that, right, your mom teach you that, right.
Speaker 1: And second of all, you want them to be good
Speaker 1: because you want consumers experiences. It's all the reasons you're
Speaker 1: saying that. So absolutely, competitions builds categories. And so when
Speaker 1: you have a healthy competition and people are improving and innovating,
Speaker 1: it's good for everyone. If you're a great executor, right,
Speaker 1: If you're not a great executor, you don't deserve to
Speaker 1: win anyway. And did you learn this? And Zeco as
Speaker 1: hundreds of competitors maybe not hundreds, maybe I'm exaggerating, but
Speaker 1: a lot of competitors popped up really quickly. What did
Speaker 1: you wrestle with as that happened? What I wrestle with is,
Speaker 1: first of all, we had one major competitor out of
Speaker 1: the gate, which was vide Cooco and they launched literally
Speaker 1: within weeks of us. It was amazing. And were they
Speaker 1: already working on it or was it a quick cut?
Speaker 1: Clearly they were working on it. Yeah, it's one of
Speaker 1: these you know, when the timings right for a variety
Speaker 1: of reasons. Rarely is any one innovation just standalone. So
Speaker 1: I hated it, and my curb in the founder right
Speaker 1: of cocoa has become a good friend of mine. But
Speaker 1: I hated him. I'm sure he hated me out of
Speaker 1: the gate. Yet I don't think we realized how dependent
Speaker 1: we would wear on each other. What really frustrated me
Speaker 1: was it didn't take long. Within i'd say six or
Speaker 1: seven years, there were eighty five coconut waters on the
Speaker 1: US alone. Oh man, that's a lot of coconut and
Speaker 1: I can remember thinking, come on, people, can't you be innovative,
Speaker 1: Go do something else? Right meg nut water? Yeah? Absolutely?
Speaker 1: But the reality yeah exactly, But the reality is what
Speaker 1: I knew was from I doesn't take a lot of
Speaker 1: research to figure this out. One category that always fascinated
Speaker 1: me was energy drinks. There's one hundred plus energy drinks
Speaker 1: on the market, but Red Bull and Monster have captured
Speaker 1: this data is outdated, but probably ten years ago this
Speaker 1: data was legitimate. Eighty percent of the market of the
Speaker 1: enterprise value of the category. Wow, So you don't have
Speaker 1: to be first, but if you're not, and there's a
Speaker 1: risk of being too early, sort of bleeding edges. But
Speaker 1: typically the top two to three competitors capture the vast
Speaker 1: majority of the value of consumers retailers, strategics, exits, whatever
Speaker 1: it is. How do you stay tough If being first
Speaker 1: doesn't guarantee that you're going to stay tough, how do
Speaker 1: you stay at the top? Execution execution execution? There is
Speaker 1: no substitute for great talent, great people that just are
Speaker 1: obsessed every day with getting better and look, I plod
Speaker 1: and love and it's one of the reasons I love
Speaker 1: my job because you know, there's people that are way
Speaker 1: better than me at running businesses for five, ten, twenty
Speaker 1: years and thinking day in and day out about efficiencies
Speaker 1: and operations and marketing, innovation and sales and people and
Speaker 1: getting that whole orchestra aligned around continuing to be relevant
Speaker 1: and never getting complacence, never getting which I suppose is
Speaker 1: one good thing about competition, right, It certainly doesn't stop
Speaker 1: you from complacency. So back to be on Meat's IPO,
Speaker 1: it's obviously been just phenomenally successful. With that came short sellers,
Speaker 1: people saying the stock was overvalued. How do you think
Speaker 1: about managing that dynamic, especially for employees, where I would
Speaker 1: think it would be hard not to have some and
Speaker 1: founders not to have some sense of how you feel
Speaker 1: about the world. Tied up and how your stock price
Speaker 1: is doing, and if it goes down forty percent over
Speaker 1: something or another, how do you process that emotionally? Yeah,
Speaker 1: that's a great question. I mean we certainly lived through
Speaker 1: that even as investors, let alone you know, as as
Speaker 1: employees seeing the stock go up that you know, two
Speaker 1: hundred and back down that I think eighty five. I
Speaker 1: was giggling one headline the other day when the stock
Speaker 1: fell on worries about increased competition. Was that beyond meat
Speaker 1: stock up butchered? Yeah, there's some fun at least, there's
Speaker 1: some good puns in this. But anyway, back to back
Speaker 1: to your point, you'd have some fun with that category,
Speaker 1: There's no question about it. Yeah. Look, I think that
Speaker 1: one difference with Beyond Meat versus the tech industry has
Speaker 1: lived through this, for fortune's made or lost on paper
Speaker 1: all the time. One difference is a vast majority of
Speaker 1: people that went to work or work at Beyond Me
Speaker 1: are there in no small part because of the mission
Speaker 1: Ethan just he lives and breathes it, he communicates it,
Speaker 1: he lives this lifestyle and he created this ethos where
Speaker 1: we are on a mission. And so I know a
Speaker 1: ton of employees there and talk to them regularly during
Speaker 1: this process, and of course they're excited, you know, their
Speaker 1: motions are up. And now usiden the same thing. How
Speaker 1: is this This must be tough, how's it going? And
Speaker 1: they all had a mindset that this was all noise.
Speaker 1: It was exciting, it was interesting, but nobody believed that
Speaker 1: two hundred ars was going to hold forever. Right. Really
Speaker 1: they were able to stay rational even in the face
Speaker 1: of exuberance, to sort of mangle and a Faymoss Alan
Speaker 1: Greenspana the phrase absolutely, I think again, it starts at
Speaker 1: the top. Ethan's an amazing rational person. Seth Goldman, the
Speaker 1: chairman of the board, is amazing irrational, have lived through
Speaker 1: some up and downs. And I think, yeah. They were
Speaker 1: communicating throughout this, Hey, we're building a company that's going
Speaker 1: to laugh, asked and live forever. And you know, I
Speaker 1: don't not privy to all the inside communication they had,
Speaker 1: but stories I heard were about, look, they're building one
Speaker 1: of the next great food brands, an iconic brand. It
Speaker 1: might be the next Kellogg or Ticon or something like that.
Speaker 1: Stocks go up, stocks go down, companies live forever. That's
Speaker 1: really interesting that the mission can help you stay honest
Speaker 1: and focused in the face of a stock price that
Speaker 1: beyond meat has seen. As I thought, it's interesting because
Speaker 1: I've often repeated over the years that a company is
Speaker 1: not at stock price. They are two different things. And yet,
Speaker 1: in a weird way, beyond meat, stock price has almost
Speaker 1: been branding or furtherance of the mission in a really
Speaker 1: interesting way, in the sense that what the stock did
Speaker 1: made everybody say there's really something here and brought attention
Speaker 1: to beyond meat in a way that I think has
Speaker 1: accomplished a lot. Does that sound right? Absolutely, look, because
Speaker 1: I do think I think about the accomplishments on a
Speaker 1: couple level. One just building a new company that's amazing.
Speaker 1: Building new company that's plant based burgers is extray, right,
Speaker 1: But when it come the next Tyson Foods is amazing.
Speaker 1: But what this did is showed us and I think
Speaker 1: a lot of other investors and entrepreneurs that there's an
Speaker 1: appetite in the public markets for what people generally called ESG.
Speaker 1: We have the fortune, the deal and our fund with
Speaker 1: some massive global investors. I can tell you it's on
Speaker 1: eighty percent of them. They care about this. Many of
Speaker 1: them care about it because the people that are running
Speaker 1: the funds are forty forty five years old, right, They've
Speaker 1: come of a new generation. They also know millennials have money,
Speaker 1: are investing money in the funds. They care about these things.
Speaker 1: And so I think there's a massive shift happening in
Speaker 1: our capital markets, which is fascinating to see, and I
Speaker 1: think it can unleash massive potential because when all of
Speaker 1: a sudden you have these institutional investors that are at
Speaker 1: least asking the question and thinking about it, that's amazing
Speaker 1: and so beyond me. It was one of the first
Speaker 1: public stocks that people could point to and both say, hey,
Speaker 1: it's a cool company. It's a product that I can
Speaker 1: touch and feel, and it's a mission I can believe in,
Speaker 1: and I can invest behind it and look at the
Speaker 1: money I can make it. As it goes back to
Speaker 1: your broader point about practicality over purity and the sense
Speaker 1: that you could say, well, these people should be doing
Speaker 1: sustainability because that's the right thing to do, but yet
Speaker 1: you have this interesting confluence between sustainability because it's the
Speaker 1: right thing to do, because that's where the money is,
Speaker 1: because it's the right thing to do. You can see
Speaker 1: how the mixture of those two things can actually create
Speaker 1: a virtuous circle and exactly what I believe. And it's
Speaker 1: just I think I've come more and more to just
Speaker 1: accept that to expect people to change too radically is unreasonable.
Speaker 1: I believe we're at a point of crisis as a
Speaker 1: species on this planet and that is in part our
Speaker 1: food system, our energy system, and that the core of
Speaker 1: that is capitalism. And if we're going to change that,
Speaker 1: it's got to be aligned with the way people live.
Speaker 1: And that's possible. That makes a ton of sense. So
Speaker 1: when the CEO of Impossible Foods talks about a goal
Speaker 1: of eliminating animal products from the global food supply by
Speaker 1: twenty thirty five, does that fit into the category of
Speaker 1: realistic or is that idealistic? Let's call that ambitious. It's
Speaker 1: a bold you, it's a b hag right, Yeah, And
Speaker 1: I love those I think they're great. I think for
Speaker 1: his company, that's perfect. It's not gonna happen. There's always
Speaker 1: going to be a place. And look, I have a
Speaker 1: lot of friends that are will argue with me all
Speaker 1: the all day long about this. And you know, the
Speaker 1: reality is a small farm with well treated animals that
Speaker 1: are fed on organic food and are harvested or used
Speaker 1: in rational ways. I have a hard time arguing that
Speaker 1: it's not my choice, and I can still have an
Speaker 1: ethical question about that, but I can understand that as
Speaker 1: a model. The reality is that's not a model for
Speaker 1: the rest of the world, and if we move a
Speaker 1: modest way towards some of these goals, it's a big deal.
Speaker 1: I do think there's sometime, whether it's fifty years, one
Speaker 1: hundred years, or a thousand years, well, we will look
Speaker 1: at animals and look back and be amazed we ate them.
Speaker 1: We amazed at the way we treated them. Were There
Speaker 1: were a couple of words that have been invented to
Speaker 1: describe I think what you're talking about, which I liked.
Speaker 1: One is let's see if I can say them flexitarianism.
Speaker 1: On the other, which I really liked, reduced tarianism right
Speaker 1: just along the notion that progress is important rather than perfection.
Speaker 1: Have you guys struggled, either with Beyond Meat or in
Speaker 1: any of your other investments with some of the pushback
Speaker 1: from the big meat interests in this country, in the
Speaker 1: sense that they've gotten laws passed that you can't use
Speaker 1: the word meat unless it comes from an animal, and
Speaker 1: there's been pushback from other lobbying groups about the idea
Speaker 1: that this is healthy in order to just preserve their
Speaker 1: market share. And do you guys worry or get angry
Speaker 1: about that corporate power, that degree of moneyed power. Look,
Speaker 1: corporate interests in general in our country anger me and
Speaker 1: annoy me. I accept them as a reality and as
Speaker 1: a challenge. And I think most grange entrepreneurs and investors
Speaker 1: do like these guys are you know, they're spitting in
Speaker 1: the wind. It's just it's inevitable, and so time is
Speaker 1: on our side. And the challenge really is building a
Speaker 1: business in and around and twist and turn, so you
Speaker 1: change the name, so you have fun with it. And
Speaker 1: I'll give you one great example. There's a company. The
Speaker 1: company has had some challenges, but fascinating an entrepreneur, an
Speaker 1: interesting story. I just this was Hampton Creek. Yeah, so
Speaker 1: when they rolled out this mayo product, they got sued
Speaker 1: by a couple of the big mayonnaise companies. They took
Speaker 1: the social media and kids in college kids across the
Speaker 1: country adopted their cause and in a month, the big
Speaker 1: mayonnaise companies were out of numerous college campuses across the country.
Speaker 1: So it just it just bit them in the ass.
Speaker 1: Oh my god. I love this story for another reason,
Speaker 1: which is social media as a force for good instead
Speaker 1: of social media as an engine of our mutual assured destruction. Right.
Speaker 1: There are occasions, right, it's it's how it's used and
Speaker 1: they but it's an exception to every rule. Right. So
Speaker 1: have you seen anything over your career now you've come
Speaker 1: to believe more strongly and this idea of mission and economics.
Speaker 1: And I was struck by a speech you gave I
Speaker 1: think it was a couple of years of ago about
Speaker 1: doing good is good business. Are there things you've seen
Speaker 1: that counter that that make it hard for you to
Speaker 1: maintain your faith in this or have you become more
Speaker 1: of a believer that these things are both possible. I
Speaker 1: have this conflict every day, and I fight the battle,
Speaker 1: and there's days where I feel like I'm kidding myself
Speaker 1: that part of the problem flying around the world to
Speaker 1: find businesses and try to change this, and every flight
Speaker 1: I take is you know, more carbon emissions, right, investing
Speaker 1: in these great companies, and most of our investors are
Speaker 1: already very wealthy people. So I think the difference now
Speaker 1: is I can recognize those and I choose my battles.
Speaker 1: And so what I recognize is I have a choice,
Speaker 1: right I can detach from the world and you know,
Speaker 1: go on a farm somewhere and raise my own plants,
Speaker 1: try to live as low impact absolutely and live as
Speaker 1: low and impact life as possible. Or I can fight
Speaker 1: within the system. And that fight, for me is is
Speaker 1: a soft one. So what I feel is if I
Speaker 1: can talk to a young entrepreneur and ask them about
Speaker 1: their mission, ask them about their impact, ask them about
Speaker 1: their supply chain, ask them about their employees. Do you
Speaker 1: know where your food comes from? Tell me about the
Speaker 1: employees of your copacker like that, they start thinking, oh
Speaker 1: my god, and investors asking me these things, I better
Speaker 1: go figure it out. That changes things, right. That's very
Speaker 1: powerful to be the person with money asking the important questions. Yes.
Speaker 1: And then when companies are scaling, what I can ask
Speaker 1: them is, look, if you sell this company and that's
Speaker 1: party goal, how do you make sure the mission is
Speaker 1: so core to the DNA that the corporations aren't going
Speaker 1: to be able to screw it up? Because corporations are
Speaker 1: generals generally pretty small, pretty rational, filled with good people
Speaker 1: that are trying to do the right thing. If the
Speaker 1: core of the brand is so strong it will endure.
Speaker 1: I'm amazed that Zico in the coke system, the brand's phenomenal.
Speaker 1: The products are honestly, in some ways better than it
Speaker 1: was in terms of quality and sustainability and social impact.
Speaker 1: But it's because the core of the DNA, the DNA
Speaker 1: the brand was strong enough. And so if you build
Speaker 1: in checks and balances in your supply chain, most likely
Speaker 1: a strategic is going to keep a lot of those
Speaker 1: in places. It's not perfect, But so I can challenge
Speaker 1: on that front, and the other front I can challenge
Speaker 1: on is investors. I can sit in front of some
Speaker 1: of the wealthiest, most successful investors in the world and
Speaker 1: tell them why this matters, why our food system is disrupted,
Speaker 1: why it needs to be rebuilt from the bottom up,
Speaker 1: Why that creates an economic opportunity for you, and you
Speaker 1: can also improve the planet health and wellness and have
Speaker 1: some humanitarian impact all at the same time. You're giving
Speaker 1: me faith that maybe the world really is moving to
Speaker 1: a different place. Because I would have expected that Zico
Speaker 1: and the Coke coal of system that they would have
Speaker 1: started trying to save money by reducing some of the
Speaker 1: costs in the supply chain in a way that would
Speaker 1: have been problematic. Honestly, look, I'm not I'm not involved anymore,
Speaker 1: but I hear plenty and I check in, and I'll
Speaker 1: give you one one little example. I know, you know
Speaker 1: the team in Thailand that manages the supply chain. There's
Speaker 1: a woman owned farm that I developed a relationship and
Speaker 1: began sourcing from her when there was nothing like it
Speaker 1: was a teeny little shed. They were gathering some coconuts
Speaker 1: and cracking them open. She's got like three hundred employees
Speaker 1: now or something like that. And one thing I know
Speaker 1: is that when you're clear about what is non negotiable,
Speaker 1: a great strategic supply chain will look at those things
Speaker 1: and do it right now. If they're throwing coconut water
Speaker 1: into another into coke, you know, someday, you know who
Speaker 1: knows how they'll do it. But thus far, at least,
Speaker 1: the integrity of the brand is strong. And we see
Speaker 1: that generally when brands get acquired. Whether it's you do
Speaker 1: well with it or not is a totally different story.
Speaker 1: Isn't that interesting? I guess to your point about working
Speaker 1: within the system, maybe the key if you're going to
Speaker 1: work within the system is to have certain things that
Speaker 1: are non negotiable and to know what those are, and
Speaker 1: to also have your consumers absolutely understand what's non negotiable,
Speaker 1: so that if there's pressure on those points, your consumers
Speaker 1: know to push back. That's exactly right. Identifying those non
Speaker 1: negotiables are important for any entrepreneur. They're important in life, right.
Speaker 1: I'm sure you have them in your business world, in
Speaker 1: your career, and I think we all play our part.
Speaker 1: I think what I've come to terms with is part
Speaker 1: of me. Would have loved to do what you're doing.
Speaker 1: I think what you did on en Ron was absolutely amazing,
Speaker 1: and to highlight these issues in another life, I'd love
Speaker 1: to do that sort of work, be sort of a
Speaker 1: calling out from the outside, pointing out and bringing it
Speaker 1: to light these real problems we have. That's not my
Speaker 1: skill set. I can't do that. I thought maybe I
Speaker 1: would run a global corporation someday and make a big
Speaker 1: impact at that level. That's not my calling. This is
Speaker 1: my well to take something that didn't exist and have
Speaker 1: a farmer in Thailand, a woman farmer in Thailand with
Speaker 1: three hundred employees, I'd say is a pretty enormous. Even
Speaker 1: if that were it and you stopped there. That's a
Speaker 1: pretty enormous thank you, thank you, And I do want
Speaker 1: to just qualify I can't quit quote that fact that
Speaker 1: Zach well the order of magnitude is okay. Before we close,
Speaker 1: I just wanted you said this about building Zico. Be
Speaker 1: ready to spend a decade of your life to dig
Speaker 1: deeper than you ever knew was possible. To give until
Speaker 1: it hurts, and then give some more and still you
Speaker 1: may not succeed. If you are willing to go for it,
Speaker 1: then you'll be amazed at the impact you can make.
Speaker 1: Was there a moment with Zco that you felt like
Speaker 1: maybe I should quit? And how do you know? To persevere?
Speaker 1: Pretty much every day for the first five years, I
Speaker 1: woke up in the morning and had a mantra which
Speaker 1: was purely intended to keep me going, which was little
Speaker 1: things like all I ever need is inside me now.
Speaker 1: I used to I used to take runs and tell myself,
Speaker 1: everyone loves Zeke, everyone loves Zico, Everyone loves Zico. When
Speaker 1: no one in the world was drinking Zco right there
Speaker 1: were ten yoga studios in New York. I wanted to
Speaker 1: quit a lot. And one of the things I was afraid.
Speaker 1: I was terrified. I didn't think I was up to it.
Speaker 1: I had made all these excuses for myself, and and
Speaker 1: fortunately I had to a certain extent boxed myself in.
Speaker 1: I'd put every penny we had into the company. I'd
Speaker 1: moved my family to New York. I'd quit my job,
Speaker 1: I'd taken money from my sister, my mother in law, friends.
Speaker 1: I'll never forget one day. I actually went to my
Speaker 1: wife at some point and I'm like, look, if you're done,
Speaker 1: I actually got a job offer to move back to
Speaker 1: All Salvador with the corporations, run a big operation. It
Speaker 1: would have been more money, you know, moving to the
Speaker 1: same house, get our same life back. We got at
Speaker 1: it all back in a month and I said, do
Speaker 1: you want to Are you done? You want to do it?
Speaker 1: And she said, let's give it another year. Life is
Speaker 1: so much the people that surround yourself with, but also
Speaker 1: that a certain amount of perseverance is just getting in
Speaker 1: too deep to get out right, and also showing up
Speaker 1: just something half the battle, show up every day. Well,
Speaker 1: thank you so much for a great conversation, and I'm
Speaker 1: going to go have a beyond burger. You're welcome. I
Speaker 1: enjoyed it, Thank you, Bethany. I expected to talk about
Speaker 1: well meat and not meat, as well as the promise
Speaker 1: and peril of inventing a new industry. Mark and I
Speaker 1: did that, but I was even more struck by the
Speaker 1: bigger themes in this conversation, for instance, purity versus practicality.
Speaker 1: The former is for sure more ideologically appealing, and Mark's
Speaker 1: comments about how vegans were angry that Beyond Meat wanted
Speaker 1: to be sold in the meat area were indicative of
Speaker 1: the clarion call of purity. But by being practical, Beyond
Speaker 1: Meat has more of a chance to change the world.
Speaker 1: Nor is this the first time any of us have
Speaker 1: encountered the idea of working within the system. That can
Speaker 1: be code for selling out. But if you establish your
Speaker 1: non negotiables, maybe there's no such thing as selling out,
Speaker 1: even if you literally do sell out anyway, food for thought,
Speaker 1: last fun I promise. Making a Killing is a co
Speaker 1: production of Pushkin Industries and chalkin Blade. It's produced by
Speaker 1: Ruth Barnes and Laura Hyde. My executive producers are Alison
Speaker 1: mc clean. No relation in Making Casey. The executive producer
Speaker 1: at Pushkin is Mia Loebell Engineering by Jason Rastkowski. Our
Speaker 1: music is by Jed Flood. Special thanks to Jacob Weisberg
Speaker 1: at Pushkin and every one on the show. I'm Bethany
Speaker 1: mc clean. Thanks so much for listening. Find me on
Speaker 1: Twitter at Bethany mac twelve and let me know which
Speaker 1: episodes you've most enjoyed.