A vegan burger company has sacked a number of employees, in the latest sign of troubles in the fake meat space.
Vegan burger company Impossible Foods has sacked a number of employees as part of an internal reorganisation, in the latest sign of trouble in the fake meat space.
Impossible Foods, whose signature plant-based meat substitute is made from a soy protein mass produced via genetically engineered yeast, has let go fewer than 15 of its 800 employees worldwide, a spokesperson told Bloomberg.
“Earlier this month we made some organisational changes on several teams to ensure the functions supporting our business are best aligned with our strategy,” the spokesperson said.
“This included downsizing some teams, and as a result a small number of employees were impacted. We are continuing to actively hire, with plans to increase the size of our team throughout the year.”
Impossible Foods launched its first burgers in 2016 focusing on restaurants, before receiving approval from the US Food and Drug Administration in 2019 to sell its products in retail stores.
Burger chains Grill’d and Butter became the first Australian retailers to offer Impossible Burgers late last year.
The California-based company, which boasts high-profile investors including Bill Gates, recently closed a $US500 million ($A700 million) funding round in November at a $US7 billion ($A9.7 billion) valuation, according to Bloomberg.
The company has raised close to $US2 billion ($A2.8 billion) since its founding in 2011.
It said in a November press release that its products were now sold in around 22,000 grocery stores, up from only 150 stores in March 2020, as well as in close to 40,000 restaurants globally.
The new funding would be used to continue its “growth in retail and across its supply chain, product portfolio, technology platforms, and international expansion plans – all of which are critical to its mission of addressing the urgent threat of climate change caused by animal agriculture”, the company said.
At the time, chief executive Pat Brown said going public was “inevitable”, but would not specify a time-frame.
But news of Impossible Foods restructuring comes as Beyond Meat, a NASDAQ-listed rival that debuted on the stock market to much fanfare in 2019, cops a beating from investors.
Beyond Meat shares jumped as high as 163 per cent on its debut in May 2019, but have fallen 60 per cent over the past 12 months to close at $US62.49 ($A87.37) on Monday. That was led by a sell-off in October after the company posted a steep decline in third-quarter sales to $US106 million ($A148 million), missing its previous guidance by about 30 per cent.
Earlier this month, Bloomberg reported Beyond Meat was being targeted by short sellers, who bet that the company’s share price will continue to fall.
According to research firm S3 Partners, Beyond Meat was the most shorted company on the Russell 1000 Index, with short interest standing at 37 per cent of the company’s freely traded shares, up from 26 per cent at the start of October.
Some analysts have suggested the plant-based meat category could be facing a difficult outlook as fewer households than initially projected embrace the products.
Bank of America analyst Peter Galbo has warned that plant-based dairy is proving more popular with consumers than plant-based meat products, which are consumed less frequently.
But James Brumley, analyst with The Motley Fool, argues Beyond Meat is ripe for a “short squeeze”.
“Given the impending growth of the plant-based meat business and Beyond Meat’s place in it, the case for buying the stock now that it’s been cut in half since the middle of last year seems much stronger than the case for continuing to short it here,” he wrote.
Speaking to The Wall Street Journal in July last year, Beyond Meat chief executive Ethan Brown said the pandemic had helped the plant-based food movement.
“It was a period of introspection for a lot of people, on broad social issues like race and equity,” he said. “Awareness of the connection between livestock and climate only seemed to accelerate throughout the pandemic. All of those things work in our favour.”
Mr Brown said his “holy grail” was to make its beef, pork and poultry imitations ”indistinguishable from animal protein”.
“How do you make a raw chicken breast with the translucent skin, the colour transition that occurs?” he said. ”Steak, given its distribution of fat and protein, and, of course, bacon? Those three things are the holy grail.”
