WEBVTT - Impossible Foods CFO on Expanding Sales 0:00:00.160 --> 0:00:03.760 This is Bloomberg Business Week with Carol Masser and Jason 0:00:03.840 --> 0:00:07.560 Kelly on Bloomberg Radio. So check out the plant based 0:00:07.560 --> 0:00:10.560 protein market man, it is, Jason expected to grow to 0:00:10.640 --> 0:00:16.680 something like billion. One big player in that world is 0:00:16.720 --> 0:00:20.079 Impossible Foods and they just rolled out their first all 0:00:20.160 --> 0:00:24.600 new product nationally since the company released its Impossible Burger 0:00:24.640 --> 0:00:27.760 back in two So let's get into it with David Lee. 0:00:27.840 --> 0:00:30.720 He is the chief financial officer at Impossible Foods, joining 0:00:30.800 --> 0:00:34.040 us on the phone in San Mateo, California. David, thank 0:00:34.080 --> 0:00:35.519 you so much. I know it's been a little bit 0:00:35.520 --> 0:00:37.599 of a crazy day and we really appreciate your patients 0:00:38.040 --> 0:00:41.400 as we listened in on that virus task force. Let's 0:00:41.440 --> 0:00:46.840 start there. First of all, how has your world been well? 0:00:46.920 --> 0:00:51.160 Our world has continuously been about increased demands, even as 0:00:51.440 --> 0:00:54.320 more and more folks to this global pandemic or sheltering 0:00:54.360 --> 0:00:58.280 in place. You've seen something like a thirty increase in 0:00:58.400 --> 0:01:01.800 Impossible Foods business and grocery stores, and we're on track 0:01:01.840 --> 0:01:05.679 actually to exceed fifty x growth this year. We are 0:01:05.720 --> 0:01:08.240 trying to adjust to meet the meat eater where they're 0:01:08.280 --> 0:01:11.800 increasingly shopping, and that means in grocery stores. It means 0:01:11.920 --> 0:01:15.560 creating our direct to consumer business that by not Impossible 0:01:15.600 --> 0:01:18.520 Foods dot Com, as well as supporting the rollout at 0:01:18.600 --> 0:01:22.399 Starbucks and at Burger king our new platform, the Impossible Sausage. 0:01:23.760 --> 0:01:26.319 So David talked to us about sort of those shifts 0:01:26.400 --> 0:01:28.840 that you had to make to to meet that demand. 0:01:29.040 --> 0:01:32.720 Was it, Uh? Did it involve sort of shifting spending? 0:01:32.800 --> 0:01:36.120 Did it involve shifting production? Like? Take us inside? What 0:01:36.120 --> 0:01:38.880 what you had to do as this? Uh? Sort of 0:01:39.080 --> 0:01:42.440 changed and then kept changing, right, because searchesn't demand are great, 0:01:42.520 --> 0:01:45.880 but sometimes you gotta all of a sad Yeah, exactly, 0:01:47.480 --> 0:01:50.560 But I mean we have been well prepared for the 0:01:50.600 --> 0:01:53.320 search that we're recently seeing because a big part of 0:01:53.360 --> 0:01:56.360 our research and development it's not just in a delicious 0:01:56.400 --> 0:01:59.680 Impossible sausage product or an a possible Burger, it's the 0:01:59.720 --> 0:02:02.360 act foul way we make our products. So being able 0:02:02.360 --> 0:02:06.040 to scale with co manufacturers like O s I has 0:02:06.080 --> 0:02:08.880 allowed us to meet all the demand we're seeing and 0:02:08.919 --> 0:02:13.240 continue to grow. That said, it is unprecedented the amount 0:02:13.280 --> 0:02:15.680 of demand we're seeing, and so far we are on 0:02:15.760 --> 0:02:18.280 track to supply it. Were you David surprised by that. 0:02:18.360 --> 0:02:19.760 I mean, I know a lot of people have been 0:02:19.800 --> 0:02:22.160 home and they're ordering lots of food. But I am 0:02:22.160 --> 0:02:26.000 curious how you think specifically the virus impacted kind of 0:02:26.000 --> 0:02:29.320 your world, maybe opened it up or made more people aware. 0:02:29.520 --> 0:02:32.560 Did you specifically target folks with advertising, or how do 0:02:32.600 --> 0:02:35.720 you think it came about? What are you hearing well? 0:02:35.720 --> 0:02:40.000 Our brand has been built predominantly based on earned media 0:02:40.040 --> 0:02:42.639 and word amount, and I think is more and more 0:02:42.760 --> 0:02:46.080 meat eaters are sheltering in place. They're thinking about the 0:02:46.160 --> 0:02:48.760 choices that they make every day to feed their families. 0:02:48.800 --> 0:02:51.480 They're thinking about what is the meat they crave due 0:02:51.560 --> 0:02:54.280 to the environment and their health. You know, nine out 0:02:54.280 --> 0:02:58.160 of ten of our customers are self of meat eaters. 0:02:58.160 --> 0:03:01.440 And when you have the benefit of really deeping, deeply 0:03:01.520 --> 0:03:05.040 thinking about better choices for yourself, it's a natural fit 0:03:05.600 --> 0:03:08.360 with the rollout of the products because we're just as crevable. 0:03:08.760 --> 0:03:11.280 We just don't have as many compromises for your health 0:03:11.320 --> 0:03:15.040 and for the environment. That's interesting, So tell us more 0:03:15.040 --> 0:03:17.760 about what you've learned about the customer, David, because you 0:03:17.760 --> 0:03:19.880 make such a good point that it is a very 0:03:19.919 --> 0:03:24.960 reflective time. I mean, and that extends to everything from exercise, 0:03:25.040 --> 0:03:28.880 to nutrition to you know, maybe even some bigger um 0:03:28.919 --> 0:03:32.560 crises that we're facing as a country around social justice 0:03:32.600 --> 0:03:36.320 and consumption and inequality and all those different things. But 0:03:36.680 --> 0:03:38.760 it is a time to get to know your customer more, 0:03:38.880 --> 0:03:42.640 tell us more about them. Well, you know, meals have 0:03:42.800 --> 0:03:48.040 always brought family together, and the Impossible burgher could possibly 0:03:48.080 --> 0:03:51.520 be the one product that's been launched to bring everyone together, 0:03:51.520 --> 0:03:55.160 whether you're immediate or your vegan, your halal, or your kosher. 0:03:55.680 --> 0:03:59.160 You know, what we find is that as home chefs 0:03:59.600 --> 0:04:02.920 experien emit with cooking, you know, they've come to realize 0:04:02.960 --> 0:04:06.240 that meat is incredibly bespoke to how they want to 0:04:06.240 --> 0:04:08.320 serve it. They can make it rare or well done. 0:04:08.360 --> 0:04:11.920 They can put it in pasta or burger. An Impossible 0:04:11.920 --> 0:04:16.040 burger and Impossible sausage are unique in that they're entirely 0:04:16.080 --> 0:04:19.159 meat from plants, but you can make them into whatever 0:04:19.240 --> 0:04:22.160 you're you're you're hoping to make for dinner for your family, 0:04:22.520 --> 0:04:25.840 unlike almost any other plant based product prior um So, 0:04:25.880 --> 0:04:29.560 I think that experience of watching our products transform in 0:04:29.640 --> 0:04:32.640 their own hands has been a unique one, different than 0:04:32.760 --> 0:04:35.240 going to a Burger King or to a Starbucks where 0:04:35.240 --> 0:04:38.120 you can enjoy the impossible breakfast sandwich or the impossible 0:04:38.240 --> 0:04:40.640 for sandwich, and that's been driving a lot of the 0:04:40.680 --> 0:04:42.839 growth were seen out of grocery. Well, that's what I 0:04:42.880 --> 0:04:44.880 was curious, David, like, break it down for us. I mean, 0:04:44.880 --> 0:04:47.240 we're Bloomberg, we're nerdy, we loved, you know, kind of 0:04:47.240 --> 0:04:49.960 to breakdown exactly where you're seeing the growth. So is 0:04:50.000 --> 0:04:52.800 it you know, you talk about the direct consumer market 0:04:52.880 --> 0:04:56.120 so people can go online, there's the supermarkets, there's those partnerships, 0:04:56.160 --> 0:04:59.760 right Starbucks, you know, announcing their own breakfast sandwich that's 0:04:59.760 --> 0:05:02.760 made with your possible sausage. So rolling it out to 0:05:02.800 --> 0:05:07.320 fifteen thousand stores nationwide. Where is the most growth among 0:05:07.400 --> 0:05:12.000 those revenue streams. Well, candidly, we're seeing growth across all 0:05:12.000 --> 0:05:16.120 of them. I mean twenty thousand locations for impossible sausage 0:05:16.240 --> 0:05:19.000 made from plants since the start of the year, an 0:05:19.040 --> 0:05:23.000 increase of thirty x the number of grocery stores right 0:05:23.120 --> 0:05:27.080 up to nearly five thousand locations today, with plans to 0:05:27.200 --> 0:05:30.000 grow that even faster. And then the recovery that we 0:05:30.040 --> 0:05:34.680 are helping support amongst food service, where you're seeing innovative 0:05:34.720 --> 0:05:38.120 tactics by our restaurant partners. They are, They're shipping raw 0:05:38.160 --> 0:05:42.120 Impossible burger direct to the home consumer. They're creating meal 0:05:42.240 --> 0:05:45.640 kits uh and and frankly, all of that is happening 0:05:45.640 --> 0:05:49.560 in a way that transcends any single channel. It because 0:05:49.600 --> 0:05:52.400 we are building a new business, we can adjust to 0:05:52.440 --> 0:05:55.760 where the meat eater has shifted, and they're shifting increasingly 0:05:55.839 --> 0:05:59.040 to cooking at home. Though we are seeing resurgence again 0:05:59.279 --> 0:06:03.720 back in the food service world. So David, talk to 0:06:03.800 --> 0:06:08.279 us about sausage, because you know that is an area. 0:06:08.560 --> 0:06:12.239 I love sausage. I have. I've tried the product in restaurants. 0:06:12.240 --> 0:06:14.880 I'm excited to try it uh in my home. But 0:06:15.160 --> 0:06:17.480 I mean, it obviously is a different sort of product. 0:06:17.520 --> 0:06:21.520 But as you say, a lot of possibilities there tell 0:06:21.600 --> 0:06:23.719 us about sort of the development of it and how 0:06:23.760 --> 0:06:27.440 you market it maybe differently than you do just the 0:06:27.720 --> 0:06:31.480 straight up burger and the more straight ahead meat or 0:06:31.839 --> 0:06:35.600 meat product. Yeah, I mean, well, the hallmarks for Impossible 0:06:35.600 --> 0:06:38.520 Sausage in some ways are really similar to the way 0:06:38.520 --> 0:06:41.080 in which we've been successful with the Impossible Burger. It 0:06:41.200 --> 0:06:45.120 appeals to meat eaters like um, it transforms the way 0:06:45.320 --> 0:06:48.520 the impossible Burgger does and it's comfort food. You know, 0:06:48.600 --> 0:06:53.080 we we announced that with yelps help, we're at thirty 0:06:53.120 --> 0:06:55.760 of America's top rank diners, these mom and pops that 0:06:55.800 --> 0:06:59.240 are just knowing known for delicious comfort food, even as 0:06:59.279 --> 0:07:03.000 we roll out at fifteen tho locations across Starbucks and 0:07:03.120 --> 0:07:06.640 Burger Kings. And that's the thing about a great sausage product. 0:07:07.000 --> 0:07:10.880 It creates a new opportunity for breakfast or impossible foods. 0:07:10.880 --> 0:07:13.440 You know, burgers are great, and the impossible burger is 0:07:14.040 --> 0:07:16.160 one of the best, but it's often not the first 0:07:16.160 --> 0:07:18.560 thing you wake up and choose to eat, whereas a 0:07:18.600 --> 0:07:21.920 great breakfast sandwich is something I think all if the 0:07:21.960 --> 0:07:24.800 first thing you're waking up and eating is a burger, David, 0:07:24.880 --> 0:07:27.960 you've had in college, you're you're in college, or you've 0:07:28.000 --> 0:07:31.320 had a really rough night, I'm guessing that's that's right. 0:07:32.000 --> 0:07:34.280 But yeah, speaking of which, the impossible sausage is some 0:07:34.320 --> 0:07:37.440 of the best health potential drownd and that it has 0:07:38.160 --> 0:07:41.160 more iron than an average brand of pork sausage, right, 0:07:41.240 --> 0:07:46.880 it has less calorie, less fat, So you know, patty 0:07:46.920 --> 0:07:49.680 for Patty, the impossible sausage is a pretty good choice. 0:07:49.720 --> 0:07:51.680 First thing in the morning or anytime. Well, you know what, 0:07:52.040 --> 0:07:54.160 why we're very excited. I have to jump in because 0:07:54.200 --> 0:07:56.200 you know, and Jason and I always go there when 0:07:56.200 --> 0:07:58.880 we're looking at all these you know, meat alternatives, protein 0:07:58.920 --> 0:08:02.160 based products, because you know that everybody talks about the 0:08:02.200 --> 0:08:04.360 high levels of sodium. I've got to say, I went 0:08:04.400 --> 0:08:06.720 to your website. You guys go into a lot of 0:08:06.760 --> 0:08:10.720 detail about the sodium levels and your products. It's very informative, 0:08:11.360 --> 0:08:13.760 um and I highly recommend that everybody read it. Having 0:08:13.800 --> 0:08:16.440 said that, it sounds like, though, David, that you folks 0:08:17.000 --> 0:08:21.200 and Impossible are still looking at ways to reduce maybe 0:08:21.280 --> 0:08:24.600 the things that might make people a little concerned about 0:08:24.640 --> 0:08:27.360 the health factors of eating your products. Is that fair 0:08:27.400 --> 0:08:29.640 to say that you're still trying to, you know, maybe 0:08:29.680 --> 0:08:31.720 even improve it, whether it's the sodium levels or what 0:08:31.800 --> 0:08:35.440 have you. Absolutely, you know, the benefit of the way 0:08:35.520 --> 0:08:38.560 we approach our work is we're driven by science, which 0:08:38.600 --> 0:08:41.240 means there's a new, better version around the corner for 0:08:41.320 --> 0:08:44.320 every product we have. You we already have no cholesterol 0:08:44.360 --> 0:08:47.240 in our products and as much protein as much iron, 0:08:47.520 --> 0:08:50.600 but we're increasingly improving the health profile, whether that's less 0:08:50.600 --> 0:08:53.400 and less fad or less and less salt. You know, 0:08:53.440 --> 0:08:55.840 the thing about salt, which you probably read, is that 0:08:55.960 --> 0:08:59.560 most meat eaters don't take raw meat and eat it 0:08:59.600 --> 0:09:02.280 without seasoning it. And so we like to think that 0:09:02.360 --> 0:09:05.240 by the time you enjoy our product versus the product 0:09:05.240 --> 0:09:08.240 from an animal, not altogether, that's different in the amount 0:09:08.240 --> 0:09:11.120 of sodium you're consuming. But that said, are the promise 0:09:11.160 --> 0:09:13.319 of our technology is to get better and better, and 0:09:13.600 --> 0:09:15.800 I think you'll see more and more versions and improvements 0:09:15.800 --> 0:09:18.240 to come. Well, speaking of more and more versions, what's 0:09:18.320 --> 0:09:23.000 next in terms of products is protein based drinks something 0:09:23.000 --> 0:09:25.720 that you guys might consider. I just wonder, you know, 0:09:25.880 --> 0:09:28.480 how do you see kind of the growth equation and 0:09:28.520 --> 0:09:32.679 strategy going forward? Would you make an acquisition? And ultimately 0:09:32.760 --> 0:09:37.320 is it all about going public? Well, ultimately it's all 0:09:37.360 --> 0:09:40.240 about serving more and more meat eaters product that's better 0:09:40.280 --> 0:09:44.040 for the world to themselves while driving a fantastic return 0:09:44.120 --> 0:09:47.040 for our investors. So we think about new products and 0:09:47.120 --> 0:09:49.560 the context of how big is the addressable market for 0:09:49.559 --> 0:09:52.680 meat eaters, how much of an opportunity is there to 0:09:52.720 --> 0:09:55.480 create a product that's superior As you see we've done 0:09:55.920 --> 0:09:59.679 for now impossible sausage and the impossible Burger. As for 0:09:59.760 --> 0:10:02.160 going public, you know, we operate as if we're public, 0:10:02.200 --> 0:10:05.640 but we're not announcing today any direct listing R I 0:10:05.679 --> 0:10:08.480 p O. Our investors hold us to the standard though 0:10:08.559 --> 0:10:10.960 of being public. You know, we've raised one point three 0:10:11.000 --> 0:10:13.199 billion dollars of the life of the company and many 0:10:13.280 --> 0:10:16.800 from large crossover sovereign wealth fund investors, and and that 0:10:16.840 --> 0:10:18.920 means that we have to operate as a republic in 0:10:18.920 --> 0:10:21.760 any case. So is that a no on maybe protein 0:10:21.760 --> 0:10:26.800 based drinks? You know, I I never say no, because 0:10:26.840 --> 0:10:30.040 our R and D same always surprises me. But you know, 0:10:30.200 --> 0:10:32.400 for us, it's about the mission in the business always. 0:10:32.520 --> 0:10:34.480 But you do see the world going that way, right 0:10:34.520 --> 0:10:36.680 like you've got I just think about go back a 0:10:36.679 --> 0:10:38.920 few years. We weren't talking about this, and it's just 0:10:39.000 --> 0:10:44.280 been an explosion. I remember joining the company five years 0:10:44.280 --> 0:10:47.200 ago as its first chief operating officer, and I think 0:10:47.240 --> 0:10:50.160 candidly many of my colleagues and friends thought I was crazy. 0:10:50.360 --> 0:10:54.240 The idea of a plant based meat company just didn't 0:10:54.280 --> 0:10:57.640 seem possible back that. But you fast forward a short 0:10:57.679 --> 0:11:00.800 five years and you're seeing that meat eaters are really 0:11:00.880 --> 0:11:04.280 voting with their stomach there. They've long been looking for 0:11:04.360 --> 0:11:06.960 something that is better for their health in the world. 0:11:07.280 --> 0:11:10.280 But frankly, everything else just didn't taste that good. And 0:11:10.280 --> 0:11:12.319 and now you know there are more and more options 0:11:12.400 --> 0:11:14.959 like the products we serve where the meat either doesn't 0:11:14.960 --> 0:11:17.240 have to compromise. I don't think the need is new. 0:11:17.760 --> 0:11:20.320 I think what's new is the ability for companies to 0:11:20.360 --> 0:11:23.200 actually meet the needs. And that's what's exciting for us. 0:11:23.200 --> 0:11:26.640 And Impossible, you know, David, I do want to ask you, 0:11:26.720 --> 0:11:29.480 and we've been talking to just about every leader that 0:11:29.520 --> 0:11:31.800 we've interviewed on this show about this, especially over the 0:11:31.880 --> 0:11:35.800 last month or so, UM and especially given your sort 0:11:35.840 --> 0:11:40.320 of expansive work across technology and consumer products, uh and whatnot, 0:11:40.360 --> 0:11:43.040 you know, places like Zinga, del Monte and and now 0:11:43.080 --> 0:11:46.360 obviously Impossible. You worked for McKenzie, so I mean you 0:11:46.400 --> 0:11:50.320 have such a holistic view of the world, and you 0:11:50.440 --> 0:11:53.360 also are working in a company that's very mission driven. 0:11:54.000 --> 0:11:58.280 I do wonder how you guys are thinking about increased discussion, 0:11:58.440 --> 0:12:04.800 increased focused on diversity, inclusion, hiring your customers, what it 0:12:04.840 --> 0:12:07.840 means to take a stand, walk us through some of 0:12:07.840 --> 0:12:11.040 the conversations that you may be having there in the 0:12:11.080 --> 0:12:14.800 c suite and Impossible around this well. One of the 0:12:14.840 --> 0:12:20.120 privileges in creating something that's relatively new and fast growing 0:12:20.360 --> 0:12:25.040 versus inheriting larger businesses that are well established is management 0:12:25.040 --> 0:12:27.000 teams and impossible foods. You know, we can take the 0:12:27.080 --> 0:12:29.560 time to think about what kind of culture are we building, 0:12:29.920 --> 0:12:32.760 what kind of company do we stand for? And while 0:12:32.760 --> 0:12:37.520 our mission to improve the world's environment is clear, it 0:12:37.600 --> 0:12:39.880 may not be super clear to many of your listeners, 0:12:39.960 --> 0:12:42.760 is that we're really focused on ensuring that we treat 0:12:43.080 --> 0:12:46.040 the employees that we have at the company and that 0:12:46.080 --> 0:12:49.079 we treat our customers in a great, fair and extortal way. 0:12:49.120 --> 0:12:52.360 You know. One example is while we don't rely upon 0:12:52.480 --> 0:12:56.040 paid advertising, and that includes social media, we have great 0:12:56.080 --> 0:12:59.440 regard for what many of our partners are doing by 0:12:59.480 --> 0:13:04.480 going on moratorio and avoiding avoiding some paid social media 0:13:04.520 --> 0:13:08.320 outlets to take a stand. We support that, but for us, 0:13:08.400 --> 0:13:11.319 it's about creating a brand in the business that can 0:13:11.400 --> 0:13:16.000 withstand the scrutiny through absolute transparency of our biggest critics. 0:13:16.600 --> 0:13:21.400 Not something we take very seriously. Yeah, that's a great message. 0:13:21.920 --> 0:13:24.280 I just think in the context of everything that's going on, 0:13:24.480 --> 0:13:26.480 so we're going to leave it on that note. David, 0:13:26.559 --> 0:13:28.840 thank you so much, and again we appreciate your patients 0:13:28.880 --> 0:13:31.240 as the news was evolving around us and we had 0:13:31.240 --> 0:13:34.760 to accommodate it um and we really do appreciate your time. 0:13:34.960 --> 0:13:37.480 Good luck with everything, and look forward to talking with 0:13:37.520 --> 0:13:39.719 you again. David Lee, he's the chief financial officer, and 0:13:39.800 --> 0:13:40.720 I possible foods.