By Constantine Spyrou, Food Hacker and MBA/MS Candidate at Chapman University
In my first class as a business student at Chapman University, I was asked to analyze the strategy and competitive advantage of a firm in my industry. As a part of the food industry, and specifically, a “food hacker” that aims to disrupt the industry for a better food future through creative innovation, I chose to look at Impossible Foods. This company is hacking the beef and plant-based meat industries in huge ways, and I would definitely recommend checking them out once the burger releases in your area. If you are a chef or restaurant owner, consider bringing them into your own restaurant – they are trending, delicious, and worth it!
Redwood City-based Impossible Foods is the perfect example of what the San Francisco “Food Hacker” movement is all about – innovating new products to disrupt the current food system. On paper, Impossible Foods’ signature Impossible Burger seems like another plant-based meat addition to the growing stockpile of meat alternatives. By being able to replicate the textures, aromas, and flavors of beef almost perfectly, however, this “bleeding plant-based burger” has taken the plant-based meat industry by storm – and is starting to give the beef industry something to think about. With $182 million in venture capital funding [1], Impossible Foods has been able to change the way people think about the future of burgers. Thanks to innovative ingredient sourcing, clever positioning, and a brand identity that is already associated with this four-year-old company, founder and CEO Dr. Patrick Brown has already been able to set his burger apart from both competitor’s plant-based meat products and ground beef.
Dr. Brown’s success with his imitation burger was no accident. As a former Stanford biochemist, he had the knowledge needed to disrupt a set of products that were all either soy, pea, or wheat-based protein pieces that didn’t come close to real beef in terms of texture or flavor. The business strategy seemed simple enough: find plant-based molecules that, when combined, would create a patty that mimicked beef way better than any of his competitors in any aspect.
Through creative and dedicated research, his team was able to come up with unique ingredients that would be specific to their burger – one of those being legume-based heme [2]. This protein, common in all plants and animals, is one of the signature tastes that humans experience when biting into cooked burger patties – and replicating and producing a plant-based source of heme became core to Impossible Foods’ strategy. The remainder of the proprietary recipe – which includes molecules from wheat, potatoes, and honeydew, among other secret produce items – is highly secretive.
All of the ingredients come from produce around the world, and the publicized ingredients seem very easy to obtain. This could make it very easy for a company to replicate Impossible Foods, as the entry barriers for the plant-based meat industry are very low. It also seems like a lot of information on their recipe is public, making their competitive advantage a temporary one that may be hard to defend. What makes Impossible Foods sustainable, however, is their extreme internal secrecy on the remainder of the recipe, controlling the supply chain by producing some of their key ingredients, and a distinct strategy on how to sell their product that is very different from their competitors.
Dr. Brown made the bold and smart move to keep Impossible Foods out of the grocery store for the time being. Grocery store shelves are already stacked with tons of faux meat products – with well-established rivals like Gardein and Beyond Meat stacking shelves nationwide. Entry into the market at this point would be a difficult barrier, especially since the company is still at a low production capacity and their price point would still be relatively high in the supermarket. Shoppers would likely shy away from the higher price of the Impossible Burger, making business struggle in the grocery store for the fledgling company.
Instead, Impossible Foods chose to enter the restaurant market. Unlike most competitors, Dr. Brown’s team is producing and selling their product uncooked. It’s allowed chefs to take an Impossible Burger and treat it like raw ground beef. As a result, Impossible Foods has deals with some of the top chef names in the country, like Momofuku’s David Chang and Jardiniere’s Traci Des Jardins, to sell the burgers out of their restaurants. While Des Jardins has yet to reveal her version of the burger in San Francisco to the public, Momofuku’s release of the Impossible Burger in New York trended on Facebook and triggered a flurry of media around the new product. Sold as a burger-and-fries plate for $12, it was very well priced compared to other products on the pricey restaurant’s menu [3]. Top food magazine writers have already given the burger stellar reviews [4], [5], making the public excited for future releases in San Francisco, Los Angeles, and beyond.
By choosing to enter the market via higher-end restaurants, Impossible Foods set themselves apart from rival brands. Other raw, plant-based burgers do exist in the form of the Beyond Burger by Beyond Meats. However, this and most other plant-based burger products are sold in grocery stores, not to restaurants [1]. By contracting these deals with big-name chefs, Impossible Foods has created a unique buyer market for themselves. The company now has a sustainable competitive advantage because they have partnerships deals to produce their signature product for specific buyers. These close relationships give Impossible Foods an easily deliverable and defendable product with exclusive buyer deals. That will keep Impossible Foods sustainable as it scales up in production, lowers cost of production (and product cost to buyers), and contracts more deals. Eventually, they will have the ability to produce the Impossible Burger at a low enough cost to enter marketplaces [6]. When that happens, it will be their already established brand name that will draw consumers to buy their product.
Impossible Foods already has an established image because of their mission and how they market their products to the public. Sociocultural demand is looking for products that are sustainable sourced and produced. This means reductions in water, carbon, and land usage. Additionally, the food produced has to be delicious, otherwise it won’t be able to thrive in the hedonically competitive food industry. In both of these regards, Impossible Foods has stepped up to the plate. Their website claims to use “95% less land, 74% less water, and with 87% less greenhouse gas emissions” than ground beef production [7]. They do all this while still creating a tasty product that mirrors the sensory properties of ground beef – all without the environmental costs of beef.
The other key position that Impossible Foods takes in their brand image is their target audience. Plant-based meat products typically target vegans looking for good, sustainable sources of protein. While Impossible Foods does attract that audience, they want to target lovers of real beef burgers. Their goal is to draw more people away from beef consumption, since part of their vision of the future of food sees beef supplies running out due to overuse of land and water. When that happens, the Impossible Burger will be there to recreate that beef experience – down to the juiciness of a burger that results from biting into it. They are known as the “plant burger that bleeds” – and while Beyond Meat has created a burger that does the same thing, Impossible Foods has recognition with that identity since they made it and publicized it first.
By targeting meat-eaters with their product, Impossible Foods is going for a completely different demographic than their industry typically goes for. This means that how they make and market the Impossible Burger is going to be very different from their rivals and competitors. It also means they have to compete with a dangerous substitute – actual beef burgers. They seem to be doing well in that regard, however, with taste tests showing that 70 percent of consumers preferred their product to standard hamburgers [1]. Nonetheless, Impossible Foods is an interesting position since they face threats from two different industries based on their marketing strategy. However, their pitch as a substitute and new entry for both industries makes them threats to all of their competitors and rivals, rather than the other way around.
Impossible Foods has already disrupted the beef and plant-based meat industries in just the mere month that it’s Impossible Burger has been available to the public. It’s position as a substitute for beef, unique and sustainable ingredient sourcing and production, and close relationships with a new market of buyers in the restaurant industry make it a sustainable business that appeals to its demographic in sociocultural and technological ways, as nobody else can mimic ground beef the way Impossible Foods. While they still have to compete with originals and well-established businesses, and their economic scale of production isn’t enough for supermarket entry yet, Dr. Patrick Brown’s company has developed a product that is desirable by taste and sustainability, defendable by positioning, distinctive by new ingredients, and deliverable to the restaurant industry. They’ve already hacked and disrupted the plant-based meat and beef industries enough to draw buyer interest from Google [8]. When Impossible Foods is able to scale up production to sell to marketplaces, and they release other products like plant-based cheese to the market, they will disrupt these industries in even bigger ways than they already do.
References
[1] Kurt Soller, “The Impossible Burger is Ready for Its (Meatless) Close-Up,” The Wall Street Journal, 14-Jun-2016.
[2] Lindsey Hoshaw, “Silicon Valley’s Bloody Plant Burger Smells, Tastes And Sizzles Like Meat,” National Public Radio, Online, 21-Jun-2016.
[3] Chris Crowley, “David Chang Will Serve Impossible Foods’ ‘Bleeding’ Veggie Burger at Momofuku Nishi,” Grubstreet, 26-Jul-2016. .
[4] Ben Gilbert and Kim Renfro, “The revolutionary meatless burger from Impossible Foods is perfect for vegetarians and carnivores alike,” TechInsider, Online, 04-Aug-2016.
[5] Christina Chaey, “The Fake-Meat Burger So Realistic It Fooled My Entire Family,” Bon Appetit Magazine, Online, 27-Apr-2016.
[6] Tessa Love, “We tried it: What Impossible Foods’ meatless burger really tastes like,” San Franc. Bus. Times, Jun. 2016.
[7] “Impossible Foods: Let’s Talk About This Burger.”
[8] Jessica E. Lessin and Amir Efrati, “Google Bid for ‘Cheeseburger’ Company Impossible Foods,” The Information, Online, 27-Jul-2015.
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