The Impossible Foods IPO is once more in the news. A plant-based food company that makes alternatives to meat, dairy, and fish products, Impossible Foods was founded in 2011 by Patrick O Brown. The plant-based meat-maker is eyeing an IPO valuing worth over $10 billion.
Rumors of a public offering first started circulating early last year, with experts predicting a 2022 IPO or a SPAC merger. Impossible Foods CEO Pat Brown had earlier that said the company wants to give its supporters an opportunity to own shares. The plant-based food company aims to eliminate the need to farm animals by using sustainable practices to meet the tastes of meat-eaters.
The Impossible foods IPO Plan
Impossible Foods counts nearly 25,000 grocery stores and 40,000 restaurants as its customers. As of June 2022, the company was valued at $7 billion. In March, the plant-based company announced a partnership with supermarket chain Korger. Impossible beef is one of its success stories, made mainly with soy.
It has been reported that the Impossible Foods IPO has been in the works for some time now, and Brown has been quoted as saying that he wants to give “millions of non-billionaires” who like meat substitutes a chance at ownership. Continued market volatility appears to have stalled plans for an early public offering.
It is now expected that the Impossible Foods IPO will happen in late 2022 or early 2023.
In recent times, studies have found that there is a growing market for plant-based food and that fast-food chains are open to putting these alternatives on their menu. Impossible Burger patties are available at Walmart and Trader Joe’s. Burger King launched the Impossible Whopper in 2019.
McDonald’s has the McPlant, which is made using patties co-developed with Beyond Meat. The company also partnered with KFC to develop a plant-based substitute for the traditional chicken nugget. Dubbed the Beyond Fried Chicken, in its test run at an Atlanta store, the product was sold out in five hours, a strong indication that the tide is changing.
Growth prospects for plant-based foods
According to a report from the NPD Group, the Gen Z and Millennial generations will be almost entirely responsible for the growth of dairy and meat alternatives through 2024. They are more aware of the repercussions of their choices and prefer to embrace sustainable practices.
A 2020 YouGov survey found that millennials are making changes to their diet for the benefit of the planet. Dana Ellis Hunnes, an assistant professor at the UCLA Fielding School of Public Health in California, senior dietitian at the Ronald Reagan UCLA Medical Center, recommends switching to plant based food to save the environment. She says, “Studies show we could save three-quarters of the land we use now for agricultural production, at least half the water we use, and over two-thirds of agricultural emissions by shifting to plant based diets.”
As of 2021, Impossible Foods’ retail sales were up 85% year-over-year according to Forbes. Despite facing stiff competition from big retailers, the company has a massive fan following as it had a headstart in the market.
What are the risks?
Impossible Foods’ arch-rival Beyond Meat debuted in 2019. Shares rose to over $200 a piece but mid-2022 they had fallen as low as $20, well below the IPO price.
As a privately-held company, the California-headquartered firm is yet to release net profits. Experts warn that the current market conditions will have a huge impact on the valuation and size of the IPO. With Beyond Meat currently trading at nearly half its IPO price, Wall Street is extremely cautious about how it places its bets.
While sales increased during the pandemic, as people started eating out more after lockdowns, it was seen that America had started losing its appetite for planet-based meat.
According to industry veterans, the Impossible Foods IPO might be worth as much as $10 billion. For now, there is no date set for the public offering. Unless there is a public S-1 filing or official announcement by the company, nobody knows when it will make its debut on a stock exchange.
