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Cattle Ranchers vs. Impossible Foods

We suppose we should have seen this one coming.

 If somebody were to ask you what the most significant development of the 21st Century within the food industry has been thus far, you’d be hard-pressed to come up with a response better than “plant-based meat alternatives”.

 Vegetarian patties fashioned to resemble meat have been around in some form or another throughout Europe and Asia for a couple of thousand years, but these were basically “food discs” made from the squishing together of whatever edible items that might be lying around the kitchen. The true predecessor to today’s phenomenon (as well as the term “vege-burger”, later “veggie burger”) appeared around 1980, but frankly it wasn’t too much of a leap forward. Veggie burgers, as you likely know, are simply a more refined form of squishing. Foods like soybeans, tofu, nuts, grains, seeds or mushrooms were shaped like a beef patty, and could be served on a bun with pickles and ketchup. In truth, most of the products in this category were downright tasty, even in the privately spoken opinions of a great many avowed carnivores. Back on the ranch, though, the cowboys would only snicker. They didn’t feel the least bit threatened by any notion of people losing their taste for USDA Prime in favor of bean pucks.

 The truly groundbreaking advancement in meat substitutes arrived, much more suddenly, about a decade ago. Assuming you have been dutifully reading your Iron Edge newsletters on a regular basis, you know very well that the trend invading supermarkets and restaurants across the nation and around the globe is the product of scientific innovation. First, Beyond Meat (NASDAQ: BYND) and then, Impossible Foods (not yet public) have set out to replicate beef by breaking it down to the molecular level in a laboratory, and then arrange plant molecules to mimic every characteristic from the taste to the way it “bleeds” on the grill. The result was astounding. Food lovers at eateries ranging from Burger King to TGI Friday’s to the trendiest Chelsea hotspots swore they couldn’t tell the difference between Impossible Burgers and the real deal. In supermarkets like Wegman’s, Fairway, and Gelson’s, consumers lined up for blocks of ground Impossible to take home to fool their children. Indeed, the Iron Edge test kitchen used Impossible meat to cook up a pasta Bolognese that tricked all four members of the sample group. Beyond Meat’s stock price embarked on a thrilling roller coaster ride, and the financial networks spent hours breathlessly reporting on the sensation du jour.

 And the aforementioned cowboys stopped snickering. They rolled up their sleeves and wedged plugs of tobacco between their cheeks and gums, suddenly feeling the need to fight for their industry.

 These buckaroos weren’t entirely misguided. They only had to consider what had befallen their milk-producing brethren. For years, American dairy farmers had been fighting a battle against almond, soy and other imitation milks, only to see these alternatives capture about 10% of sales as consumption of cows’ milk declined. Signs of history repeating with a vengeance are evident: In a span of four years, sales of plant-based meat alternatives are up almost 60% while beef receipts are flat in the same time period.  Hoping to nip things in the bud, the beef industry has been calling for all sorts of investigations aimed at suggesting health risks tied to Beyond Meat and Impossible Foods products. They are petitioning for tighter regulations that would create obstacles for the startups. So far, though, all efforts to obstruct the wave of vegan burgers have failed universally.

 Impossible Foods CEO Pat Brown has taken a thinly veiled swipe at the cattle ranchers, stating a company mission to be “successful at the expense of the incumbent industry”. Aside from the likelihood of human health benefits and the certainty of cow health benefits, Impossible Foods is quick to highlight the environmental upside of their alternative to beef. On the company website, Brown states: “If everyone who ate an Impossible Burger in 2018 ate it instead of a burger from cows, we would have collectively spared a full day’s worth of water demand of 2.6 million Americans, the greenhouse gases of 250 million miles driven in a typical U.S. car, and a land area nearly the size of San Francisco”. These eye-opening claims are supported by renowned environmental activist and Really Rich Guy Bill Gates, who also happens to have invested in Impossible Foods. The politically stylish tone of these statements, meanwhile, is not making things any easier for those who raise cattle.

 In a plot twist worthy of your typical daytime drama, Pat Brown proclaimed last month in an interview with Bloomberg that his company will soon be antagonizing wranglers of a different kind. Impossible Foods has developed “a handful of prototypes for plant-based pork”. Nearly 30% of the world’s meat is consumed in China, and more than 60% of the meat eaten in that country is pork. Upping the ante, an epidemic of the nasty-sounding African Swine Fever is raging across Asia, making a pork alternative seem much more urgently necessary. All that aside, it seems that Brown’s objectives are drifting from the saving of the environment to the making of money. Whatever the case may be, can we all pause for a moment to say, mmmmmm… BACON! By the way, not to pat ourselves on the back, but Iron Edge sort of called this one in our essay “Your Mission: Impossible Foods” (August 22, 2019).

   As all this excitement has been unfolding, and somewhat lost in the muted news cycle of last week’s Thanksgiving celebrations, Reuters reported that Impossible Foods is seeking to more than double the $2 billion valuation it was given last May. The company is working with investors to raise an additional $300 million to $400 million in funding. The latest funding could endow the company with a valuation of up to $5 billion, potentially clearing a path for Impossible to announce an IPO. So saddle up, cowboys.

   We at Iron Edge VC have always been very proud to have pre-IPO access to Impossible Foods. It is, therefore, with an extra helping of satisfaction that we tell you about our current Impossible offering. Would you like to have a piece of this company like Bill Gates? Even amidst the speculation about an impending funding round, our current supply of this remarkable company is priced at a more attractive level — up to 20% lower — than the pricing we were able to secure just a couple of months ago. We do not expect this opportunity to last very long, so please… If you would like to learn more, or if you know of anybody else who would, do not hesitate to contact us by clicking “Get in Touch” below.

As always, shares are available on a first come, first served basis.

5f6e0d464e388c4975685025 Paul Min

Paul Maguire

Founder And Managing Partner