Speaker 1: This is Bloomberg Business Week with Carol Masser and Jason
Speaker 1: Kelly on Bloomberg Radio. So check out the plant based
Speaker 1: protein market man, it is, Jason expected to grow to
Speaker 1: something like billion. One big player in that world is
Speaker 1: Impossible Foods and they just rolled out their first all
Speaker 1: new product nationally since the company released its Impossible Burger
Speaker 1: back in two So let's get into it with David Lee.
Speaker 1: He is the chief financial officer at Impossible Foods, joining
Speaker 1: us on the phone in San Mateo, California. David, thank
Speaker 1: you so much. I know it's been a little bit
Speaker 1: of a crazy day and we really appreciate your patients
Speaker 1: as we listened in on that virus task force. Let's
Speaker 1: start there. First of all, how has your world been well?
Speaker 1: Our world has continuously been about increased demands, even as
Speaker 1: more and more folks to this global pandemic or sheltering
Speaker 1: in place. You've seen something like a thirty increase in
Speaker 1: Impossible Foods business and grocery stores, and we're on track
Speaker 1: actually to exceed fifty x growth this year. We are
Speaker 1: trying to adjust to meet the meat eater where they're
Speaker 1: increasingly shopping, and that means in grocery stores. It means
Speaker 1: creating our direct to consumer business that by not Impossible
Speaker 1: Foods dot Com, as well as supporting the rollout at
Speaker 1: Starbucks and at Burger king our new platform, the Impossible Sausage.
Speaker 1: So David talked to us about sort of those shifts
Speaker 1: that you had to make to to meet that demand.
Speaker 1: Was it, Uh? Did it involve sort of shifting spending?
Speaker 1: Did it involve shifting production? Like? Take us inside? What
Speaker 1: what you had to do as this? Uh? Sort of
Speaker 1: changed and then kept changing, right, because searchesn't demand are great,
Speaker 1: but sometimes you gotta all of a sad Yeah, exactly,
Speaker 1: But I mean we have been well prepared for the
Speaker 1: search that we're recently seeing because a big part of
Speaker 1: our research and development it's not just in a delicious
Speaker 1: Impossible sausage product or an a possible Burger, it's the
Speaker 1: act foul way we make our products. So being able
Speaker 1: to scale with co manufacturers like O s I has
Speaker 1: allowed us to meet all the demand we're seeing and
Speaker 1: continue to grow. That said, it is unprecedented the amount
Speaker 1: of demand we're seeing, and so far we are on
Speaker 1: track to supply it. Were you David surprised by that.
Speaker 1: I mean, I know a lot of people have been
Speaker 1: home and they're ordering lots of food. But I am
Speaker 1: curious how you think specifically the virus impacted kind of
Speaker 1: your world, maybe opened it up or made more people aware.
Speaker 1: Did you specifically target folks with advertising, or how do
Speaker 1: you think it came about? What are you hearing well?
Speaker 1: Our brand has been built predominantly based on earned media
Speaker 1: and word amount, and I think is more and more
Speaker 1: meat eaters are sheltering in place. They're thinking about the
Speaker 1: choices that they make every day to feed their families.
Speaker 1: They're thinking about what is the meat they crave due
Speaker 1: to the environment and their health. You know, nine out
Speaker 1: of ten of our customers are self of meat eaters.
Speaker 1: And when you have the benefit of really deeping, deeply
Speaker 1: thinking about better choices for yourself, it's a natural fit
Speaker 1: with the rollout of the products because we're just as crevable.
Speaker 1: We just don't have as many compromises for your health
Speaker 1: and for the environment. That's interesting, So tell us more
Speaker 1: about what you've learned about the customer, David, because you
Speaker 1: make such a good point that it is a very
Speaker 1: reflective time. I mean, and that extends to everything from exercise,
Speaker 1: to nutrition to you know, maybe even some bigger um
Speaker 1: crises that we're facing as a country around social justice
Speaker 1: and consumption and inequality and all those different things. But
Speaker 1: it is a time to get to know your customer more,
Speaker 1: tell us more about them. Well, you know, meals have
Speaker 1: always brought family together, and the Impossible burgher could possibly
Speaker 1: be the one product that's been launched to bring everyone together,
Speaker 1: whether you're immediate or your vegan, your halal, or your kosher.
Speaker 1: You know, what we find is that as home chefs
Speaker 1: experien emit with cooking, you know, they've come to realize
Speaker 1: that meat is incredibly bespoke to how they want to
Speaker 1: serve it. They can make it rare or well done.
Speaker 1: They can put it in pasta or burger. An Impossible
Speaker 1: burger and Impossible sausage are unique in that they're entirely
Speaker 1: meat from plants, but you can make them into whatever
Speaker 1: you're you're you're hoping to make for dinner for your family,
Speaker 1: unlike almost any other plant based product prior um So,
Speaker 1: I think that experience of watching our products transform in
Speaker 1: their own hands has been a unique one, different than
Speaker 1: going to a Burger King or to a Starbucks where
Speaker 1: you can enjoy the impossible breakfast sandwich or the impossible
Speaker 1: for sandwich, and that's been driving a lot of the
Speaker 1: growth were seen out of grocery. Well, that's what I
Speaker 1: was curious, David, like, break it down for us. I mean,
Speaker 1: we're Bloomberg, we're nerdy, we loved, you know, kind of
Speaker 1: to breakdown exactly where you're seeing the growth. So is
Speaker 1: it you know, you talk about the direct consumer market
Speaker 1: so people can go online, there's the supermarkets, there's those partnerships,
Speaker 1: right Starbucks, you know, announcing their own breakfast sandwich that's
Speaker 1: made with your possible sausage. So rolling it out to
Speaker 1: fifteen thousand stores nationwide. Where is the most growth among
Speaker 1: those revenue streams. Well, candidly, we're seeing growth across all
Speaker 1: of them. I mean twenty thousand locations for impossible sausage
Speaker 1: made from plants since the start of the year, an
Speaker 1: increase of thirty x the number of grocery stores right
Speaker 1: up to nearly five thousand locations today, with plans to
Speaker 1: grow that even faster. And then the recovery that we
Speaker 1: are helping support amongst food service, where you're seeing innovative
Speaker 1: tactics by our restaurant partners. They are, They're shipping raw
Speaker 1: Impossible burger direct to the home consumer. They're creating meal
Speaker 1: kits uh and and frankly, all of that is happening
Speaker 1: in a way that transcends any single channel. It because
Speaker 1: we are building a new business, we can adjust to
Speaker 1: where the meat eater has shifted, and they're shifting increasingly
Speaker 1: to cooking at home. Though we are seeing resurgence again
Speaker 1: back in the food service world. So David, talk to
Speaker 1: us about sausage, because you know that is an area.
Speaker 1: I love sausage. I have. I've tried the product in restaurants.
Speaker 1: I'm excited to try it uh in my home. But
Speaker 1: I mean, it obviously is a different sort of product.
Speaker 1: But as you say, a lot of possibilities there tell
Speaker 1: us about sort of the development of it and how
Speaker 1: you market it maybe differently than you do just the
Speaker 1: straight up burger and the more straight ahead meat or
Speaker 1: meat product. Yeah, I mean, well, the hallmarks for Impossible
Speaker 1: Sausage in some ways are really similar to the way
Speaker 1: in which we've been successful with the Impossible Burger. It
Speaker 1: appeals to meat eaters like um, it transforms the way
Speaker 1: the impossible Burgger does and it's comfort food. You know,
Speaker 1: we we announced that with yelps help, we're at thirty
Speaker 1: of America's top rank diners, these mom and pops that
Speaker 1: are just knowing known for delicious comfort food, even as
Speaker 1: we roll out at fifteen tho locations across Starbucks and
Speaker 1: Burger Kings. And that's the thing about a great sausage product.
Speaker 1: It creates a new opportunity for breakfast or impossible foods.
Speaker 1: You know, burgers are great, and the impossible burger is
Speaker 1: one of the best, but it's often not the first
Speaker 1: thing you wake up and choose to eat, whereas a
Speaker 1: great breakfast sandwich is something I think all if the
Speaker 1: first thing you're waking up and eating is a burger, David,
Speaker 1: you've had in college, you're you're in college, or you've
Speaker 1: had a really rough night, I'm guessing that's that's right.
Speaker 1: But yeah, speaking of which, the impossible sausage is some
Speaker 1: of the best health potential drownd and that it has
Speaker 1: more iron than an average brand of pork sausage, right,
Speaker 1: it has less calorie, less fat, So you know, patty
Speaker 1: for Patty, the impossible sausage is a pretty good choice.
Speaker 1: First thing in the morning or anytime. Well, you know what,
Speaker 1: why we're very excited. I have to jump in because
Speaker 1: you know, and Jason and I always go there when
Speaker 1: we're looking at all these you know, meat alternatives, protein
Speaker 1: based products, because you know that everybody talks about the
Speaker 1: high levels of sodium. I've got to say, I went
Speaker 1: to your website. You guys go into a lot of
Speaker 1: detail about the sodium levels and your products. It's very informative,
Speaker 1: um and I highly recommend that everybody read it. Having
Speaker 1: said that, it sounds like, though, David, that you folks
Speaker 1: and Impossible are still looking at ways to reduce maybe
Speaker 1: the things that might make people a little concerned about
Speaker 1: the health factors of eating your products. Is that fair
Speaker 1: to say that you're still trying to, you know, maybe
Speaker 1: even improve it, whether it's the sodium levels or what
Speaker 1: have you. Absolutely, you know, the benefit of the way
Speaker 1: we approach our work is we're driven by science, which
Speaker 1: means there's a new, better version around the corner for
Speaker 1: every product we have. You we already have no cholesterol
Speaker 1: in our products and as much protein as much iron,
Speaker 1: but we're increasingly improving the health profile, whether that's less
Speaker 1: and less fad or less and less salt. You know,
Speaker 1: the thing about salt, which you probably read, is that
Speaker 1: most meat eaters don't take raw meat and eat it
Speaker 1: without seasoning it. And so we like to think that
Speaker 1: by the time you enjoy our product versus the product
Speaker 1: from an animal, not altogether, that's different in the amount
Speaker 1: of sodium you're consuming. But that said, are the promise
Speaker 1: of our technology is to get better and better, and
Speaker 1: I think you'll see more and more versions and improvements
Speaker 1: to come. Well, speaking of more and more versions, what's
Speaker 1: next in terms of products is protein based drinks something
Speaker 1: that you guys might consider. I just wonder, you know,
Speaker 1: how do you see kind of the growth equation and
Speaker 1: strategy going forward? Would you make an acquisition? And ultimately
Speaker 1: is it all about going public? Well, ultimately it's all
Speaker 1: about serving more and more meat eaters product that's better
Speaker 1: for the world to themselves while driving a fantastic return
Speaker 1: for our investors. So we think about new products and
Speaker 1: the context of how big is the addressable market for
Speaker 1: meat eaters, how much of an opportunity is there to
Speaker 1: create a product that's superior As you see we've done
Speaker 1: for now impossible sausage and the impossible Burger. As for
Speaker 1: going public, you know, we operate as if we're public,
Speaker 1: but we're not announcing today any direct listing R I
Speaker 1: p O. Our investors hold us to the standard though
Speaker 1: of being public. You know, we've raised one point three
Speaker 1: billion dollars of the life of the company and many
Speaker 1: from large crossover sovereign wealth fund investors, and and that
Speaker 1: means that we have to operate as a republic in
Speaker 1: any case. So is that a no on maybe protein
Speaker 1: based drinks? You know, I I never say no, because
Speaker 1: our R and D same always surprises me. But you know,
Speaker 1: for us, it's about the mission in the business always.
Speaker 1: But you do see the world going that way, right
Speaker 1: like you've got I just think about go back a
Speaker 1: few years. We weren't talking about this, and it's just
Speaker 1: been an explosion. I remember joining the company five years
Speaker 1: ago as its first chief operating officer, and I think
Speaker 1: candidly many of my colleagues and friends thought I was crazy.
Speaker 1: The idea of a plant based meat company just didn't
Speaker 1: seem possible back that. But you fast forward a short
Speaker 1: five years and you're seeing that meat eaters are really
Speaker 1: voting with their stomach there. They've long been looking for
Speaker 1: something that is better for their health in the world.
Speaker 1: But frankly, everything else just didn't taste that good. And
Speaker 1: and now you know there are more and more options
Speaker 1: like the products we serve where the meat either doesn't
Speaker 1: have to compromise. I don't think the need is new.
Speaker 1: I think what's new is the ability for companies to
Speaker 1: actually meet the needs. And that's what's exciting for us.
Speaker 1: And Impossible, you know, David, I do want to ask you,
Speaker 1: and we've been talking to just about every leader that
Speaker 1: we've interviewed on this show about this, especially over the
Speaker 1: last month or so, UM and especially given your sort
Speaker 1: of expansive work across technology and consumer products, uh and whatnot,
Speaker 1: you know, places like Zinga, del Monte and and now
Speaker 1: obviously Impossible. You worked for McKenzie, so I mean you
Speaker 1: have such a holistic view of the world, and you
Speaker 1: also are working in a company that's very mission driven.
Speaker 1: I do wonder how you guys are thinking about increased discussion,
Speaker 1: increased focused on diversity, inclusion, hiring your customers, what it
Speaker 1: means to take a stand, walk us through some of
Speaker 1: the conversations that you may be having there in the
Speaker 1: c suite and Impossible around this well. One of the
Speaker 1: privileges in creating something that's relatively new and fast growing
Speaker 1: versus inheriting larger businesses that are well established is management
Speaker 1: teams and impossible foods. You know, we can take the
Speaker 1: time to think about what kind of culture are we building,
Speaker 1: what kind of company do we stand for? And while
Speaker 1: our mission to improve the world's environment is clear, it
Speaker 1: may not be super clear to many of your listeners,
Speaker 1: is that we're really focused on ensuring that we treat
Speaker 1: the employees that we have at the company and that
Speaker 1: we treat our customers in a great, fair and extortal way.
Speaker 1: You know. One example is while we don't rely upon
Speaker 1: paid advertising, and that includes social media, we have great
Speaker 1: regard for what many of our partners are doing by
Speaker 1: going on moratorio and avoiding avoiding some paid social media
Speaker 1: outlets to take a stand. We support that, but for us,
Speaker 1: it's about creating a brand in the business that can
Speaker 1: withstand the scrutiny through absolute transparency of our biggest critics.
Speaker 1: Not something we take very seriously. Yeah, that's a great message.
Speaker 1: I just think in the context of everything that's going on,
Speaker 1: so we're going to leave it on that note. David,
Speaker 1: thank you so much, and again we appreciate your patients
Speaker 1: as the news was evolving around us and we had
Speaker 1: to accommodate it um and we really do appreciate your time.
Speaker 1: Good luck with everything, and look forward to talking with
Speaker 1: you again. David Lee, he's the chief financial officer, and
Speaker 1: I possible foods.