Impossible Foods and Kroger Team Up to Add More Vegan Options
Impossible Foods has changed the alternative protein market with its signature plant-based burger and remained a favorite among consumers since 2016. Now, the vegan brand is seeking to make its plant-based meat alternatives as accessible as possible, announcing a partnership with Kroger that will blend the company’s plant-based expertise with the largest retailer in the United States’ product selection.
Last week, Kroger and Impossible announced a joint partnership with Custom Made Meals LLC – a manufacturer of fresh meals for retail sale – that will expand Kroger’s Home Chef brand. During the recent investment meeting, Kroger officials teased the partnership but were vague with details about specific products. The co-branding opportunity aims to make Impossible products more accessible and affordable while also diversifying the retail meal brand.
“We are incredibly proud of our Home Chef brand, which became a $1 billion brand in 2021,” chief merchandising and marketing officer for Kroger Co. Stuart W. Aitken said. “We’ll continue to expand this brand across our family of companies. Our assortment is connecting with the customer through ready-to-eat meals, rotating seasonal programs, new appetizers as well as our first plant-based protein, in partnership with Custom Made Meals and Impossible [Foods].”
Kroger originally acquired the Home Chef brand in 2018, introducing nearly 500 products to its retail selections nationwide. From meal kits to ready-to-eat products, the Home Chef brand offers customers affordable options across multiple food categories. With Impossible’s help, the retail giant hopes that its Home Chef brand can gain traction among plant-based consumers while simultaneously catering to the growing amount of vegan shoppers.
“If you look at the merger with Home Chef, [it] would be an example of where we really tried to find the company that had capabilities that we didn’t, but you can leverage the assets they have within the Kroger infrastructure plus help them accelerate their growth,” Chairman and Chief Executive Officer of Kroger William Rodney McMullen said. “And those are the types of things that we’re looking at because it really does create a win-win-win.”
Beyond vs. Impossible
While the announcement is mostly good news for the plant-based world, Impossible’s new partnership creates issues for its longtime competitor Beyond Meat. Following Kroger’s investor meeting, Beyond’s stock plummeted seven percent in afternoon trading. Overall, the Beyond Meat stock has been struggling to stay afloat or maintain steady gains as competitors grow and supply chain issues harm the company. Currently, Beyond stock prices float around $43 per share, which is remarkably lower than the company’s all-time high of $234.90.
Analysts including Credit Suisse’s Robert Moskow believe that Impossible’s involvement with Kroger will present major market competition for Beyond. Kroger's sheer size will allow Impossible to expand its product selection at an accelerated and unprecedented rate, giving more Americans than ever an opportunity to try the renowned plant-based meat alternatives. Moskow notes that even the prospect of the co-branded strategy puts Impossible ahead of Beyond in the retail sector.
“The test is still in the early stages, but it looks like it will be similar to the co-branding strategy that Costco’s Kirkland brand uses in the fresh meat case with big suppliers like Tyson,” Moskow claimed. “We view this test as a threat to Beyond Meat because it demonstrates the willingness of a big competitor to ‘margin down’ into co-branded private label products in order to maximize the reach of its products,”
Impossible Foods' Recent Success
From Jay-Z to Serena Williams, Impossible Foods has gained the attention of some big names. The plant-based brand is teasing a stock market debut in 2022 that will reportedly value at nearly $10 billion. While these valuations remain just rumors, Impossible continues to double down on its market presence, increasing its fast-food partnerships, promoting its new plant-based products including chicken nuggets, and garnering the attention of major investors worldwide.
During its most recent funding round, the company exceeded $2 billion in investments. The funding round led by South Korea-based investment firm Mirae Asset Fund Services propelled Impossible to unprecedented heights. The company claimed that the investment solidified its place as the fastest-growing plant-based meat company in the entire alternative protein sector.
“We’re fortunate to have great investors who believe in our long-term mission,” Impossible Foods’ Chief Financial Officer David Borecky said at the time. “The latest round of funding allows us to further accelerate our product innovation and global expansion efforts as we continue to leverage the power of the food system to satisfy consumers and fight climate change.”
To continue its crusade against the climate crisis, the company just debuted its Wild Nuggies – plant-based nuggets shaped like endangered animals. A riff on its chicken nugget predecessor Dino Nuggets, the Wild Nuggies product aims to bring attention to the dangers to wildlife that the animal agriculture industry creates. By raising awareness among young consumers, the company hopes to highlight how plant-based diets can help curb the negative effects of climate change.