Impossible Foods CFO on Expanding Sales

us on the phone in San Mateo, California. David, thank you so much. I know it's been a little bit of a crazy day and we really appreciate your patients as we listened in on that virus task force. Let's start there. First of all, how has your world been well? Our world has continuously been about increased demands, even as more and more folks to this global pandemic or sheltering

in place. You've seen something like a thirty increase in Impossible Foods business and grocery stores, and we're on track actually to exceed fifty x growth this year. We are trying to adjust to meet the meat eater where they're increasingly shopping, and that means in grocery stores. It means creating our direct to consumer business that by not Impossible Foods dot Com, as well as supporting the rollout at Starbucks and at Burger king our new platform, the Impossible Sausage.

So David talked to us about sort of those shifts that you had to make to to meet that demand. Was it, Uh? Did it involve sort of shifting spending? Did it involve shifting production? Like? Take us inside? What

what you had to do as this? Uh? Sort of changed and then kept changing, right, because searchesn't demand are great, but sometimes you gotta all of a sad Yeah, exactly, But I mean we have been well prepared for the search that we're recently seeing because a big part of our research and development it's not just in a delicious Impossible sausage product or an a possible Burger, it's the

act foul way we make our products. So being able to scale with co manufacturers like O s I has allowed us to meet all the demand we're seeing and continue to grow. That said, it is unprecedented the amount of demand we're seeing, and so far we are on track to supply it. Were you David surprised by that. I mean, I know a lot of people have been

home and they're ordering lots of food. But I am curious how you think specifically the virus impacted kind of your world, maybe opened it up or made more people aware. Did you specifically target folks with advertising, or how do you think it came about? What are you hearing well? Our brand has been built predominantly based on earned media and word amount, and I think is more and more

meat eaters are sheltering in place. They're thinking about the choices that they make every day to feed their families. They're thinking about what is the meat they crave due to the environment and their health. You know, nine out of ten of our customers are self of meat eaters. And when you have the benefit of really deeping, deeply thinking about better choices for yourself, it's a natural fit with the rollout of the products because we're just as crevable.

We just don't have as many compromises for your health and for the environment. That's interesting, So tell us more about what you've learned about the customer, David, because you make such a good point that it is a very reflective time. I mean, and that extends to everything from exercise, to nutrition to you know, maybe even some bigger um crises that we're facing as a country around social justice

and consumption and inequality and all those different things. But it is a time to get to know your customer more, tell us more about them. Well, you know, meals have always brought family together, and the Impossible burgher could possibly be the one product that's been launched to bring everyone together, whether you're immediate or your vegan, your halal, or your kosher.

You know, what we find is that as home chefs experien emit with cooking, you know, they've come to realize that meat is incredibly bespoke to how they want to serve it. They can make it rare or well done.

They can put it in pasta or burger. An Impossible burger and Impossible sausage are unique in that they're entirely meat from plants, but you can make them into whatever you're you're you're hoping to make for dinner for your family, unlike almost any other plant based product prior um So, I think that experience of watching our products transform in their own hands has been a unique one, different than going to a Burger King or to a Starbucks where

you can enjoy the impossible breakfast sandwich or the impossible for sandwich, and that's been driving a lot of the growth were seen out of grocery. Well, that's what I was curious, David, like, break it down for us. I mean, we're Bloomberg, we're nerdy, we loved, you know, kind of

to breakdown exactly where you're seeing the growth. So is it you know, you talk about the direct consumer market so people can go online, there's the supermarkets, there's those partnerships, right Starbucks, you know, announcing their own breakfast sandwich that's made with your possible sausage. So rolling it out to fifteen thousand stores nationwide. Where is the most growth among those revenue streams. Well, candidly, we're seeing growth across all

of them. I mean twenty thousand locations for impossible sausage made from plants since the start of the year, an increase of thirty x the number of grocery stores right up to nearly five thousand locations today, with plans to grow that even faster. And then the recovery that we are helping support amongst food service, where you're seeing innovative tactics by our restaurant partners. They are, They're shipping raw

Impossible burger direct to the home consumer. They're creating meal kits uh and and frankly, all of that is happening in a way that transcends any single channel. It because we are building a new business, we can adjust to where the meat eater has shifted, and they're shifting increasingly to cooking at home. Though we are seeing resurgence again back in the food service world. So David, talk to us about sausage, because you know that is an area.

I love sausage. I have. I've tried the product in restaurants. I'm excited to try it uh in my home. But I mean, it obviously is a different sort of product. But as you say, a lot of possibilities there tell us about sort of the development of it and how you market it maybe differently than you do just the straight up burger and the more straight ahead meat or meat product. Yeah, I mean, well, the hallmarks for Impossible Sausage in some ways are really similar to the way

in which we've been successful with the Impossible Burger. It appeals to meat eaters like um, it transforms the way the impossible Burgger does and it's comfort food. You know, we we announced that with yelps help, we're at thirty of America's top rank diners, these mom and pops that are just knowing known for delicious comfort food, even as we roll out at fifteen tho locations across Starbucks and Burger Kings. And that's the thing about a great sausage product.

It creates a new opportunity for breakfast or impossible foods. You know, burgers are great, and the impossible burger is one of the best, but it's often not the first thing you wake up and choose to eat, whereas a great breakfast sandwich is something I think all if the first thing you're waking up and eating is a burger, David, you've had in college, you're you're in college, or you've had a really rough night, I'm guessing that's that's right.

But yeah, speaking of which, the impossible sausage is some of the best health potential drownd and that it has more iron than an average brand of pork sausage, right, it has less calorie, less fat, So you know, patty for Patty, the impossible sausage is a pretty good choice. First thing in the morning or anytime. Well, you know what,

why we're very excited. I have to jump in because you know, and Jason and I always go there when we're looking at all these you know, meat alternatives, protein based products, because you know that everybody talks about the high levels of sodium. I've got to say, I went to your website. You guys go into a lot of detail about the sodium levels and your products. It's very informative,

um and I highly recommend that everybody read it. Having said that, it sounds like, though, David, that you folks and Impossible are still looking at ways to reduce maybe the things that might make people a little concerned about the health factors of eating your products. Is that fair to say that you're still trying to, you know, maybe even improve it, whether it's the sodium levels or what

have you. Absolutely, you know, the benefit of the way we approach our work is we're driven by science, which means there's a new, better version around the corner for every product we have. You we already have no cholesterol in our products and as much protein as much iron, but we're increasingly improving the health profile, whether that's less and less fad or less and less salt. You know, the thing about salt, which you probably read, is that most meat eaters don't take raw meat and eat it

without seasoning it. And so we like to think that by the time you enjoy our product versus the product from an animal, not altogether, that's different in the amount of sodium you're consuming. But that said, are the promise of our technology is to get better and better, and I think you'll see more and more versions and improvements to come. Well, speaking of more and more versions, what's next in terms of products is protein based drinks something

that you guys might consider. I just wonder, you know, how do you see kind of the growth equation and strategy going forward? Would you make an acquisition? And ultimately is it all about going public? Well, ultimately it's all about serving more and more meat eaters product that's better for the world to themselves while driving a fantastic return

for our investors. So we think about new products and the context of how big is the addressable market for meat eaters, how much of an opportunity is there to create a product that's superior As you see we've done for now impossible sausage and the impossible Burger. As for going public, you know, we operate as if we're public, but we're not announcing today any direct listing R I p O. Our investors hold us to the standard though

of being public. You know, we've raised one point three billion dollars of the life of the company and many from large crossover sovereign wealth fund investors, and and that means that we have to operate as a republic in any case. So is that a no on maybe protein based drinks? You know, I I never say no, because our R and D same always surprises me. But you know, for us, it's about the mission in the business always.

But you do see the world going that way, right like you've got I just think about go back a few years. We weren't talking about this, and it's just been an explosion. I remember joining the company five years ago as its first chief operating officer, and I think candidly many of my colleagues and friends thought I was crazy. The idea of a plant based meat company just didn't seem possible back that. But you fast forward a short five years and you're seeing that meat eaters are really

voting with their stomach there. They've long been looking for something that is better for their health in the world. But frankly, everything else just didn't taste that good. And and now you know there are more and more options like the products we serve where the meat either doesn't have to compromise. I don't think the need is new. I think what's new is the ability for companies to actually meet the needs. And that's what's exciting for us.

And Impossible, you know, David, I do want to ask you, and we've been talking to just about every leader that we've interviewed on this show about this, especially over the last month or so, UM and especially given your sort of expansive work across technology and consumer products, uh and whatnot, you know, places like Zinga, del Monte and and now

obviously Impossible. You worked for McKenzie, so I mean you have such a holistic view of the world, and you also are working in a company that's very mission driven. I do wonder how you guys are thinking about increased discussion, increased focused on diversity, inclusion, hiring your customers, what it means to take a stand, walk us through some of the conversations that you may be having there in the

c suite and Impossible around this well. One of the privileges in creating something that's relatively new and fast growing versus inheriting larger businesses that are well established is management teams and impossible foods. You know, we can take the time to think about what kind of culture are we building,

what kind of company do we stand for? And while our mission to improve the world's environment is clear, it may not be super clear to many of your listeners, is that we're really focused on ensuring that we treat the employees that we have at the company and that we treat our customers in a great, fair and extortal way.

You know. One example is while we don't rely upon paid advertising, and that includes social media, we have great regard for what many of our partners are doing by going on moratorio and avoiding avoiding some paid social media outlets to take a stand. We support that, but for us, it's about creating a brand in the business that can withstand the scrutiny through absolute transparency of our biggest critics. Not something we take very seriously. Yeah, that's a great message.

I just think in the context of everything that's going on, so we're going to leave it on that note. David, thank you so much, and again we appreciate your patients as the news was evolving around us and we had to accommodate it um and we really do appreciate your time. Good luck with everything, and look forward to talking with you again. David Lee, he's the chief financial officer, and I possible foods.