Speaker 1: This is Bloomberg Business Week from Bloomberg Radio. I'm Jason
Speaker 1: Kelly and I'm Carol Master. Welcome to the Bloomberg Business
Speaker 1: Week Extra. It's our weekly podcast bring you an in
Speaker 1: depth interview you will not hear anywhere else. Remember the
Speaker 1: Bloomberg Fifty We were celebrating that in just the past
Speaker 1: couple of weeks. Well, we caught up with one of
Speaker 1: the members of that list, the CEO and co founder
Speaker 1: of Beyond Meat, Ethan Brown. So Barkley's forecast that meat
Speaker 1: alternatives will be a hundred and forty billion dollar market
Speaker 1: worldwide in the next decade. And Jason, this may explain
Speaker 1: why when Beyond Meat debut as a public company in
Speaker 1: May of this year, share sword making it the best
Speaker 1: ip of since the financial crisis, it really took off.
Speaker 1: It's also why the company and its CEO makes the
Speaker 1: Bloomberg fifty list this year, and that aforementioned CEO also
Speaker 1: the founder and president of Beyond Meat, Ethan Brown. He
Speaker 1: joins us from Los Angeles. Ethan. First of all, congratulations
Speaker 1: and thank you for joining us. I appreciate being here.
Speaker 1: Thank you. All Right, so let's do a little bit
Speaker 1: of a look back on twenty nineteen, because it feels
Speaker 1: like there were seven roll big inflection points as you
Speaker 1: look back, even going beyond the I p O, which
Speaker 1: I know everyone loves to talk about, what were the
Speaker 1: business inflection points for you? You You know, if you look
Speaker 1: at the growth of the business from two thousand nine
Speaker 1: to today, we've always had the same goal in mind,
Speaker 1: which is to become a company that can provide protein
Speaker 1: for the center the plate for the mainstream consumer. And
Speaker 1: so if you look at particularly our third quarter this year,
Speaker 1: whether it's the McDonald's tests we announced, the subways um
Speaker 1: or KFC or Duncan, all four of those were really
Speaker 1: important to us in terms of being able to communicate
Speaker 1: the message that we have, which is you can build
Speaker 1: a piece of meat directly from plants, you can provide
Speaker 1: it to consumers where they enjoy eating their food, and
Speaker 1: you can do so in a way that enables them
Speaker 1: to continue to eat what they love, giving them the
Speaker 1: more nutritious something it's better for their bodies and better
Speaker 1: for the earth, and doing it in the formats that
Speaker 1: they're familiar with. What about this year surprised you the most?
Speaker 1: What was the most challenging? You know, it always is
Speaker 1: around continue to educate not only the consumer of the
Speaker 1: media around just how healthy and how much our company
Speaker 1: is driven by the human health imperative. If you look
Speaker 1: at the products we're creating, take the Duncan sausage for example,
Speaker 1: that product has fifty percent less fat, It has percent
Speaker 1: less saturated fat, is less sodium, and has more protein
Speaker 1: and more iron. So when you're beginning with a blank
Speaker 1: canvas and you're able to build a piece of meat
Speaker 1: directly from plants, you can leave out a lot of
Speaker 1: the things that you wouldn't want to be consuming on
Speaker 1: a daily basis, such as cholesterol, and you can lower
Speaker 1: things like saturated fat, and you can provide the consumer
Speaker 1: with a very healthy product that they get to enjoy.
Speaker 1: Yet continue to move the ball forward year every year
Speaker 1: and making the products healthier and healthier. So as we
Speaker 1: get into you'll see us continue to drive toward goals
Speaker 1: that will enable the consumer to eat what they love,
Speaker 1: but do it in a way that's healthier for them.
Speaker 1: We'll talk about that because I feel like that comes
Speaker 1: up often about maybe this becoming even a healthier product
Speaker 1: because there is still a fair amount of sodium and
Speaker 1: so on in it. Do you guys think about doing
Speaker 1: some kind of reformulating to lower calories. Are a lower
Speaker 1: sodium amoun is that kind of in the future. So
Speaker 1: if you look at the DNA of the company, we
Speaker 1: are an innovation driven company. We produce all of our
Speaker 1: products here in the US, and we have our our
Speaker 1: innovation center here in Los Angeles. We call that Innovation
Speaker 1: Center in the Manhattan Beach Project. We do that because
Speaker 1: we're near Manhattan Beach. But more importantly, weren't evoke that
Speaker 1: sense of urgency and scale that occurred in the Second
Speaker 1: World War with the Manhattan Project itself. Were brought together
Speaker 1: the very best scientists, the best engineers, the best managers
Speaker 1: and gave him a clear goal, which is to build
Speaker 1: meet directly from plants. Now, when you're doing that, you're
Speaker 1: always improving, and we have these parameters we call the fat, flavor, aroma, puters,
Speaker 1: and texture were constantly driving toward making the products better
Speaker 1: in each area and nutrition would of course be part
Speaker 1: of that. But it's also about marketing and helping people
Speaker 1: understand the products. So if you look at it beyond
Speaker 1: Burger for example, that has sixteen percent daily value of sodium,
Speaker 1: not sixty but sixteen, which is well within reason for
Speaker 1: many many meals that folks will consume, such as two
Speaker 1: flower tortillas or half a couple of mari narrow sauce, etcetera.
Speaker 1: So a lot of it is just separating the misinformation
Speaker 1: and hype from reality. This product has an extremely healthy product.
Speaker 1: It's one that I consume almost daily. It's something I
Speaker 1: feel very good about giving to my own children. And
Speaker 1: so it's really about let's educate consumers about the health
Speaker 1: of our products and about the process. We're very proud
Speaker 1: of our process. If you look at how we produce
Speaker 1: meat from from plants. Instead of running a lot of
Speaker 1: plant material through animals and the antibiotics that go without
Speaker 1: other hormones depending on the species of veterinary drugs, et cetera,
Speaker 1: what we're doing is taking that protein directly from the plant.
Speaker 1: We're running it through heating, cooling, and pressure, and that
Speaker 1: resets the bond so that they take on that fibrous
Speaker 1: texture of muscle. That's it for me. That's a much
Speaker 1: better process than one that we can be proud of.
Speaker 1: We offer complete transparency. You'd be welcome to come to
Speaker 1: our facilities, knock on the door, and we give you
Speaker 1: a tour people should be able to see where and
Speaker 1: how their food is made. And we believe very strong
Speaker 1: in that principle, and so Ethan, speaking of a different
Speaker 1: sort of process, walk us through the process of assessing
Speaker 1: these partnerships. You know, you name checked some of the
Speaker 1: best known when it comes to you know, fast food.
Speaker 1: You've also got some partnerships in casual dining. How does
Speaker 1: that work? Because pun intended, it feels like everybody wants
Speaker 1: a piece of this market right now, right so you
Speaker 1: always want to align yourself with the marquee players. And
Speaker 1: that's what we've done from the beginning of the company.
Speaker 1: So when we decided to go into retail way back
Speaker 1: in two thousand nine, the first company we called was
Speaker 1: Whole Foods, and then we've been able to cliff right
Speaker 1: out through Kroger, et cetera. But when then you look
Speaker 1: at our venture history, the first venture firm we worked
Speaker 1: with the client of Perkins, and now we have a
Speaker 1: great list including Great Point Ventures and many others. Um
Speaker 1: But if you're now looking at the fast food space
Speaker 1: or a quick serve restaurant space, you also want to
Speaker 1: adopt the same philosophy. Who are the marquee players? And
Speaker 1: how do you become UH of service to them. And
Speaker 1: that's what we're able to do. Whether it's McDonald's, whether Subway,
Speaker 1: whether it's KFC or Duncan. We're constantly looking Carl's Jr. Hearties, etcetera.
Speaker 1: We're constantly looking to serve the very best partners in
Speaker 1: the space so we can grow with them. What's the focus?
Speaker 1: Is it retail or food service or will it be
Speaker 1: a split going forward? Our focus is entirely on the consumer.
Speaker 1: It's our relationship with the consumer that makes the business
Speaker 1: so special. We listen to what they say. They told
Speaker 1: us no GMOs, they told us nothing artificial, they said
Speaker 1: keep everything natural. So that's what we do UM and
Speaker 1: that makes it harder. By the way, we will be
Speaker 1: much easier genetically modified plant material to make it UH
Speaker 1: take on the texture and appearance and aroma of of
Speaker 1: of animal protein. But we won't do that, and so
Speaker 1: we're constantly focused on what the consumer wants. We'll need
Speaker 1: to consumer where they are, so if it's if it's UH,
Speaker 1: it's quick ser of restaurants will be there for them.
Speaker 1: If it's retailed before them. Right now, it's about and
Speaker 1: the market will tell us which directions. Okay, so it
Speaker 1: could change going forward, right and so Ethan, when you
Speaker 1: think about the test, let's just talk about McDonald's for
Speaker 1: a second. What have you learned so far? Because obviously
Speaker 1: that's from a volume perspective, but also from a brand perspective,
Speaker 1: something that everyone investors included have been looking at very closely.
Speaker 1: What have you taken away from that test? So I
Speaker 1: had a great privilege of being up in the Ontario
Speaker 1: area a couple of weeks ago, and I drove out
Speaker 1: to McDonald's there and I went to three different stores
Speaker 1: and had the burger in each each location, and they
Speaker 1: were identical and delicious. It was a fantastic experience for
Speaker 1: me and one that was very satisfying. It's a goal
Speaker 1: I've had for a very long time to be of
Speaker 1: service to McDonald's. UM, it's going very well. I think
Speaker 1: you heard the CEO of McDonald's Canada say that we
Speaker 1: can't comment further than what they've said publicly, but I'm
Speaker 1: very enthusiastic about the relationship and our ability to grow
Speaker 1: the partnership. Does it expand into the United States, that's
Speaker 1: up to them, UM, But what you want is a
Speaker 1: great test, and I think we have every sign that
Speaker 1: that's the case. All right, So let's talk about some
Speaker 1: of the different products, because there was a lot of excitement,
Speaker 1: including in my household when you got to Duncan. We're
Speaker 1: big mobile app users there, And obviously that's a different
Speaker 1: sort of approach in some ways, not the least of
Speaker 1: which just because you're talking sausage instead of Burger's. The
Speaker 1: sausage market, as it were, has been described as a
Speaker 1: really huge opportunity for you and for others. Why is
Speaker 1: that and what are you seeing as you look at
Speaker 1: the sort of the different modalities of beyond. Yeah, so
Speaker 1: I thank you for asking that question. It's a really
Speaker 1: important one, not only to our business, but to the
Speaker 1: global protein supply. Um. You know, I came out of
Speaker 1: the fuel cell industry, and the primary focus of the
Speaker 1: business that I was with I was around automotive and
Speaker 1: it was around replacing the internal combustion engine. And what
Speaker 1: you find what's happening today, uh, in the protein industry
Speaker 1: is that one of the core sources of protein from
Speaker 1: animals has taken a severe supply hit. And so if
Speaker 1: you look at the Chinese market, I think it's about
Speaker 1: fifty of the herd is going to be destroyed based
Speaker 1: on the the flu virus. And so if you think
Speaker 1: about that, if that had happened, and that's about the
Speaker 1: world supply, if that had happened in the automotive sector,
Speaker 1: where all of a sudden of the internal combusting engine
Speaker 1: manufacturing capability went down overnight, you would have seen in
Speaker 1: the U. S. Department Energy and many other world energy
Speaker 1: agencies go after with a concerted plan about how to
Speaker 1: bring forward some of these alternative technologies. We are doing
Speaker 1: that today with my company in this industry. If you're
Speaker 1: such a supply shock, we should be able to take
Speaker 1: advantage of that. So we are very focused on pork,
Speaker 1: not only here in the United States, but globally. Let's
Speaker 1: talk a little bit more about China. China accounts for
Speaker 1: about twenty seven of the world's meat consumption by volume. Um.
Speaker 1: They already eat a lot of plant proteins, and they
Speaker 1: kind of look at meat as a bit of a
Speaker 1: status symbol there. What's your approach, what's your expectations for China?
Speaker 1: You'll see us be very aggressive there. We are aggressive
Speaker 1: in each market that we occupy, whether here in the
Speaker 1: United States. Mentioning again those partners just McDonald's, KFC, Duncan, Subway, etcetera. UM,
Speaker 1: you'll see us move with speed, um and exploit the
Speaker 1: first mover advantage we have globally in terms of building
Speaker 1: the brand that's most closely associated with the plant based
Speaker 1: meat movement. UM. So I can't disclose anything particular, but
Speaker 1: you can guess that we're very excited about that market
Speaker 1: UM and very active in our plans. All right, let's
Speaker 1: talk a little bit about chicken if we can big
Speaker 1: chicken fans here as well, kind of hungry. I'm just
Speaker 1: going to tell you seriously, I mean the KFC test
Speaker 1: as it were, uh down in Atlanta, I believe is
Speaker 1: where that was, it went gangbusters. How soon can you
Speaker 1: sort of get into that market in a meaningful way.
Speaker 1: So you'll see some exciting things from us in the
Speaker 1: poultry space. I can't name specific partners or developments, but UM,
Speaker 1: you know, we look at three core platforms with beef, pork,
Speaker 1: and poultry, and you can see consumers pulling off very
Speaker 1: quickly of beef and pork. And you're also starting to
Speaker 1: see some pressure around the poultry industry. So UM, we
Speaker 1: we've done a lot of work there you'll see the
Speaker 1: fruits of that, Hey consolidation. I'm just curious because I
Speaker 1: feel like, you know, this market went from nobody talking
Speaker 1: about it to Bam, you guys have your eye po
Speaker 1: and then all of a sudden, it seems like smaller players,
Speaker 1: larger players, everybody is getting involved in it. How do
Speaker 1: you see this market kind of play out? Is it
Speaker 1: like a coke and pepsi market going forward? You know
Speaker 1: what I am most focused on, and this is something
Speaker 1: that we had to repeat quite a bit throughout the
Speaker 1: the I P O Road Show. Uh, is there's nobody
Speaker 1: in the world who wants to replace beyond meat products
Speaker 1: on the shelf more than me. UM. You know, we
Speaker 1: have an appetite for innovation UM that I think is
Speaker 1: barned on. The goal is every year to replace the
Speaker 1: current products we have with new, improved versions, whether the
Speaker 1: flavor of rome, appearance, text, or the health claims, etcetera.
Speaker 1: And so while we are aware there is competition out
Speaker 1: there and that many many partners are companies rather or
Speaker 1: entering the market, our focuses on that true north of
Speaker 1: building meat directly from plants and doing it perfectly. And
Speaker 1: we're getting closer every year. We've been at it eleven
Speaker 1: years now, and we'll get closer in our twelfth year
Speaker 1: and the thirteenth year, etcetera. Um, you know, but I
Speaker 1: do think it's important to note, and there's been a
Speaker 1: lot of discussion in the media about this, that just
Speaker 1: because a large company intends to come in and capture
Speaker 1: significant market share does not necessarily mean that's going to happen.
Speaker 1: And I think history is replete with examples where there
Speaker 1: have been those fears when disrupters coming along and they
Speaker 1: haven't panned out. And so we are very focused on
Speaker 1: executing against our mission. Uh and I think the rest
Speaker 1: will take care of itself. Ethan elsewhere on the Bloomberg
Speaker 1: fifty list, there were some notable influencers, as it were,
Speaker 1: very influential people out in the world. You guys have
Speaker 1: leaned into this notion of influential folks kind of signing
Speaker 1: on the Go Beyond campaign, I believe is what it
Speaker 1: was called launched earlier this year, help us understand what's
Speaker 1: underneath that, especially at a time when people love this
Speaker 1: notion of authenticity, they want to make sure that their
Speaker 1: values aligned with the people who they are following, quite literally,
Speaker 1: and I just gotta throw out some names because Bill
Speaker 1: Gates has been a backer. Leonardo DiCaprio, UM. Former McDonald's
Speaker 1: CEO Don Thompson. I mean you've had incredible people and
Speaker 1: then a lot of celebrities as well. Yeah, it's it's
Speaker 1: been very purposeful. If you look at the history of
Speaker 1: the company. When I was growing up, they Got Milk
Speaker 1: campaign was a very big deal, and I had some
Speaker 1: exposure to the dairy industry as a kid. Um and uh,
Speaker 1: you know that was around Bo Jackson, Derek Deeter, etcetera.
Speaker 1: And the message there was to parents that if you
Speaker 1: feed your if your children are consuming milk, they'll grow
Speaker 1: to be strong, healthy, etcetera. UM, And in my case,
Speaker 1: with our products, that is true that you you can
Speaker 1: and if you look at movies like Game Changers, etcetera,
Speaker 1: you can affect even individual day performance from a student athlete,
Speaker 1: for example, through the consumption of our products over over
Speaker 1: animal protein. And so what we wanted to do was
Speaker 1: convey the message that you can not only flourish with
Speaker 1: our our products, uh, but you can over a longer
Speaker 1: period of time, avoid some of the chronic disease that
Speaker 1: is so prevalent in our in our communities, and so
Speaker 1: we wanted to get athletes out there who obviously depend
Speaker 1: on their bodies for their paychecks and for their day
Speaker 1: to day performance and have them tell the story. And
Speaker 1: so I hired Jeff Manning, who was the principal at
Speaker 1: the California Milk Board who kicked off the original got
Speaker 1: Milk campaign many many decades ago. UM and then a
Speaker 1: woman in Beth Moscowitz came and joined our company and
Speaker 1: brought in UH the the ability to tap into this
Speaker 1: intersection sports and culture, which is so important to us.
Speaker 1: We believe that our products will make you feel better,
Speaker 1: perform better, and have a longer term health prospect, and
Speaker 1: we wanted to have the very best of our communities
Speaker 1: in terms of athletes, convey that message and the notion
Speaker 1: about something being genuine is so important. Right. We don't
Speaker 1: just take anybody who comes into our influencer program. We
Speaker 1: really look to see are they living a lifestyle? Do
Speaker 1: they believe in in what we're doing. They don't have
Speaker 1: to be vegan, but having them UH lean into this
Speaker 1: dive and the principles behind it is really important. And
Speaker 1: once you do that, you don't have to create deals
Speaker 1: that have UM milestones etcetera. You just let them go
Speaker 1: do what they do best and they bring us along
Speaker 1: with them. And so, whether it's Kyrie Irving, UM, Chris Paul, etcetera.
Speaker 1: So many of these terrific athletes, they're adopting our products
Speaker 1: in their training regimes and they're seeing great results along
Speaker 1: the way, and so then they go out there and
Speaker 1: speak about it. That's the best way, in my view,
Speaker 1: to market is find people who believe in what you're
Speaker 1: doing and work with them to tell the story. All right, Either,
Speaker 1: one last question for you before we let you go.
Speaker 1: You know, you've talked throughout this interview in a very
Speaker 1: personal way, and you talk about what you feed your kids,
Speaker 1: and even when you're talking about the folks that you're
Speaker 1: working with from a partnership perspective, this does feel like
Speaker 1: a very personal mission. I do wonder what you've learned
Speaker 1: along this very interesting year as a CEO and as
Speaker 1: a leader of a company that really is about a
Speaker 1: lifestyle and sort of who we are. You know, I'm
Speaker 1: very grateful to be in the position that I'm in. UM.
Speaker 1: This is much more than a business. UM. It's something
Speaker 1: that helps people lead healthier lives. UM. It helps UH
Speaker 1: I think address some of our largest environmental problems globally. Um.
Speaker 1: And so to get up every day and be able
Speaker 1: to go into an office and work on issues that
Speaker 1: are so important not only meat personally, but to the
Speaker 1: world as a privilege and so uh. This year, I
Speaker 1: think we were recognized by the markets for what we're doing. Um.
Speaker 1: You know, and we don't believe that this is a
Speaker 1: short lived trend. Uh. This is something that has very
Speaker 1: long legs to it. Um. If you think about what
Speaker 1: we're doing, we're not suggesting that people don't eat meat.
Speaker 1: We think that'd be a big mistake. You know, I
Speaker 1: grew up eating need to love meat. I love fried chicken,
Speaker 1: I love burgers. The idea behind the company is to
Speaker 1: provide a better form of meat. Right, to provide meat
Speaker 1: that provides all of the delicious, satiating experience that we've
Speaker 1: come to love, but does so uh in a way
Speaker 1: healthy for your bodies and healthier for the earth. Um.
Speaker 1: You know, if you look at what the mobile phone
Speaker 1: did in relation to the landline, nobody had to denigrate
Speaker 1: the landline. And we don't think we have to denigrate
Speaker 1: animal protein. We simply have to provide the consumer with
Speaker 1: a new and better choice and let them make the decision.
Speaker 1: And if we're successful, more and more will sign on
Speaker 1: with this, And that's beyond me CEO Ethan Brown. Look,
Speaker 1: this is a company that is in the middle of
Speaker 1: so many mega trends. It's essentially a lifestyle brand. Yeah,
Speaker 1: and this is why he's part of the Bloomberg fifty list.
Speaker 1: But I also think this is gonna be a big
Speaker 1: story for as well. You've been listening to Bloomberg Business
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