Another vegan food giant is set to go public.
Vegan meat brand Impossible Foods has begun preparing for an IPO, sources say. The Redwood City, Calif., brand was valued at $4 billion during a private funding round last year.
Sources familiar with the matter told Reuters the company is eyeing an IPO within the next 12 months, or possibly merging with a SPAC — a special purpose acquisition company — that helps brands go public. SPACs work by raising funds through IPOs and acquiring the companies going public.
Impossible’s chief competitor, Beyond Meat, went public nearly two years ago at a $1.5 billion valuation. Its shares are now up more than 400 percent over its IPO price. Impossible Foods’ valuation would put it on par with Swedish oat milk giant Oatly, which was rumored to have filed for an IPO back in February. It is also expecting a $10 billion valuation.
The news comes just days after the Good Food Institute and the Plant-Based Foods Association released 2020 vegan food sales data. The industry saw a 27 percent sales spike, tipping more than $7 billion.
Impossible Foods, which launched in 2011, has played a major role in the rise in popularity of vegan meat. Like Beyond Meat, Impossible has found partners in fast-food chains, namely Burger King, which sells the Impossible Whopper. It’s now sold in more than 20,000 locations, including Disney restaurants and Starbucks.
Impossible Foods has received funding from big names including Jay-Z, Serena Williams, and Bill Gates. The Microsoft co-founder has become a vocal advocate for shifting away from animal products.
Known for its meaty, “bleeding” burgers that look, cook, and taste like traditional beef, Impossible Foods employs a novel ingredient — heme — which it sources from the root of soybean plants. This, the company says, gives it a meaty-like color. But the ingredient has brought some backlash. First, by animal rights activists after the company submitted the ingredient to animal testing as required in order to earn pre-market GRAS status (Generally Recognized as Safe) in accordance with the FDA.
The ingredient has also been targeted for being produced with genetic engineering technology, often referred to as GMOs (genetically modified ingredients). Impossible takes the heme from the soy plant and uses its DNA in genetically altered yeast to create a larger volume of the ingredient through fermentation. Critics of the technology say the FDA should have required more safety testing before approving the colorant as safe for human consumption.
“The FDA is supposed to have an extremely high bar for approval for color additives in food,” according to Food Safety News. “The agency’s ‘convincing evidence’ standard means that a color additive cannot be approved without the strongest possible evidence of safety, a higher bar than for other food additives. However, Impossible Foods’ products containing GE heme are now widely available in supermarkets across the country because of what [the Center for Food Safety] believes was the FDA’s unlawful approval of GE heme as a color additive. according to the center officials.”
A New Market for Meat
The controversies haven’t seem to phased Impossible’s success, though. It became the number-one selling item at Gelson’s when it made its supermarket debut in 2019 at the Southern California chain.
Its biggest target isn’t the growing number of vegans. Like Beyond Meat, Impossible is going after meat-eaters. And it seems they’re responding in kind. In 2020, the company said 72 percent of its sales came from displacing meat. It has begun to expand its offerings to include sausage and pork and is working on other meat types, including fish and bacon.
“Our mission is to completely replace the use of animals as a food technology by 2035,” founder Pat Brown, professor emeritus in the department of biochemistry at Stanford University, said in 2020. “We’re dead serious about it and we believe it’s doable.”