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In the continuing downfall of Impossible Foods:

Quote:

Impossible Foods Considers Potential Sale

Impossible Foods is contemplating a strategic shift as industry sales stagnate and competitor Beyond Meat experiences a significant decline in stock value. The plant-based meat company’s CEO, Peter McGuinness, hinted that a potential sale of the entire company within the next few years is being considered as an alternative to the much-discussed initial public offering (IPO).

During an interview on Yahoo Finance’s Opening Bid podcast, McGuinness acknowledged that selling the company could expedite Impossible Foods’ mission, benefiting both investors and employees through substantial returns on their investments. While a “sizable” capital raise and an IPO remain on the table, the possibility of a sale introduces a new dynamic to the company’s long-term strategy.

While McGuinness did not disclose Impossible Foods’ current valuation, it is likely below the $7 billion mark from its 2021 funding round. He admitted that the plant-based category is not performing as expected, contributing to investor caution.

Reflecting on Beyond Meat’s IPO journey offers a cautionary tale. Beyond Meat’s public debut in May 2019 was initially met with enthusiasm, with shares soaring from $25 to $65.75 on the first day of trading. The company quickly forged high-profile partnerships with global chains like KFC and Dunkin’ Donuts and expanded its presence in major retail outlets like Target. However, the COVID-19 pandemic severely impacted the restaurant industry, leading consumers to revert to cheaper, meat-based options. This shift, coupled with critiques from the meat industry and media, dampened enthusiasm for plant-based products.

Founded in 2011 by Dr. Pat Brown, Impossible Foods has faced profitability challenges despite several rounds of layoffs aimed at streamlining operations. The company’s last significant capital raise in November 2021 secured $500 million. However, a pullback in demand for plant-based meat products and operational inefficiencies have continued to impact the business. McGuinness, who joined the company in 2022 after his tenure at Chobani, has been focused on improving these operations.

Despite these hurdles, Impossible Foods maintains a strong cash position, allowing it to sustain operations while considering future strategic options. McGuinness emphasized the importance of focusing on fundamentals, such as distribution, awareness, and product improvement, in the near term.

Beyond Meat’s stock, which once peaked at $234.90 in July 2019, now hovers around $6.97, a stark illustration of the challenges faced by the industry. Impossible Foods has not been immune to these issues, with layoffs in January 2023 affecting about 20% of its workforce.

The broader market for plant-based foods also reflects these challenges. Retail sales of plant-based food reached $8.1 billion in 2023, slightly down from $8.2 billion in 2022, according to the Good Food Institute.

https://retailwire.com/impossible-f...potential-sale/