Going Beyond Impossible

Jan. 21, 2020

Why is Beyond Meat outselling Impossible Foods?

News broke this week that Beyond Meat has enjoyed a sales spike of 135% in the 52 weeks ending in early October, compared with the previous 52 weeks. This moves it into third place in the meat analogue market, behind two long-established brands: MorningStar Farms, from Kellogg, and Gardein, from Conagra Brands.

This comes in the wake of Beyond Meat’s spectacular IPO in May, which saw its stock soar to $234.90 by late July, a 257% increase. The stock has cooled since then and is now at about $130, but the sales figures, if they hold up, should give it another boost.

What particularly interests me is how Beyond is surging ahead of Impossible Foods, one of its main competitors, which hasn’t even cracked the top 10 in meat analogues. (To be fair, retail isn’t nearly as big a priority for them as for Beyond.) Impossible has gotten just as much buzz as Beyond, and has arguably surpassed it in terms of landing impressive contracts with high-profile QSR chains like Burger King and White Castle. Burger King has aggressively marketed the Impossible Burger on TV and elsewhere, handing Impossible a lot of great publicity at no cost.

As to who makes a better product, that’s a matter of individual taste that I’m not going to weigh in on. But I will note that Impossible Foods has an ingenious, and unique, solution to the challenge of mimicking the “bleed” of a bitten-into burger: It uses a hemoglobin bioengineered from yeast. Beyond uses beet juice.

So why is Beyond going beyond Impossible? Because they followed the advice of an apocryphal Confederate general: Get thar firstest with the mostest.

Simply put, Beyond got a two-year jump on Impossible. It was founded in 2009, Impossible in 2011. Beyond rolled out its first product, a chicken analogue, in 2013, coming out with analogue beef the following year. Meantime, Pat Brown, the Stanford biochemist behind Impossible, spent years fine-tuning his company’s product, with the Impossible Burger not rolling out until 2016.

Brown has steadfastly refused to entertain offers to sell his company or take it public. As a result, Impossible has struggled to keep up with the demand caused by the Burger King deal, running production around the clock and adding another production line. It recently pulled out of contract talks with McDonald’s, which would have cemented its position in the QSR universe, because it just didn’t have the capacity to supply the world’s biggest restaurant chain.

Beyond Meat, on the other hand, opened a second production facility in Missouri in 2018, to complement its original one in California. They may also have the inside track at McDonald’s, which recently concluded a test market of their product in Canada. Flush with IPO cash, they’re in a great position to meet any production challenges.

This is in no way intended as a criticism of the brilliant Pat Brown, who chose to perfect his product before rolling it out. But the respective states of Beyond and Impossible at this time goes to show that, while having the highest-quality product is important if not vital, it’s not nearly enough by itself. Despite the old saw, you can build a better mousetrap, but if the world can get to your competitor’s door faster, it just might beat a path there instead.

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