Impossible Foods’ much-teased IPO is currently on the horizon for investors as industry sales appear to be stagnant and longtime competitor Beyond Meat (BYND)’s stock price slumps. I think it might not be the best idea for everyone.
The alternative is to sell the entire company within a few years.
“That’s an option,” Impossible Foods CEO Peter McGuinness said on Yahoo Finance’s Opening Bid Podcast when asked about a possible sale. video or listen here). “And it could make the impossible happen in more places and actually accomplish the mission faster. Investors could get good returns, employees could get good returns on their capital.” can.”
McGuinness also did not rule out the possibility of a “huge” capital raise or a much-discussed IPO, but the pending sale is a new wrinkle in the endgame for the plant-based meat maker.
The company’s last capital raise was $500 million in November 2021.
Mr McGuinness admitted that Impossible Foods, founded in 2011 by Dr Pat Brown, was not yet profitable despite several rounds of job cuts. The losses reflect declining demand for plant-based meat and operational inefficiencies.
The former Chobani COO and advertising executive has been working to improve operations since joining the company in 2022. The company also strengthened its marketing by appointing legendary hot dog eater Joey Chestnut as a brand ambassador.
Impossible Foods has enough cash on hand to operate its business, but no decisions have been made yet regarding a sale, IPO or capital raise.
“Maybe we can talk more about that in a year or two, but for now it’s about doing the basics better, increasing distribution, increasing awareness and making the food better. The basics. I know it sounds corny and boring, but it’s a strategy that works,” McGuinness added.
Joey Chestnut, winner of the 2021 Nathan’s Famous Independence Day International Hot Dog Eating Contest, poses for a photo at Maimonides Park on Coney Island in New York on July 4, 2021. Chestnut currently serves as a brand ambassador for Impossible Foods. (AP Photo/Britteny Newman, File) · ASSOCIATED PRESS
Impossible doesn’t have to look far to see what an IPO will bring.
Rival Beyond Meat burst into the public eye on May 5, 2019, with a successful initial public offering on the Nasdaq.
Investors have gobbled up stocks of companies they see as leaders in the plant-based food industry. The company’s IPO price was $25 per share, which opened at $46 and soared to $65.75 at the end of trading. When the final bell rang, the profit was 163%.
From there, there were big deals with global restaurant chains like KFC (YUM) and Dunkin Donuts, Target (TGT) plans to expand into the refrigerated food sector and international retail stores, and expanding manufacturing capacity to expand plant-based Create a new item.
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By July 2019, Beyond Meat’s stock price reached a high of $234.90 per share.
But the coronavirus pandemic has hit the restaurant industry hard, and its economic fallout has sent people back to cheaper meat-based products in supermarkets.
Beyond Meat’s impressive momentum stalled, as did Impossible Foods’ expansion into restaurants and retailers such as Burger King (QSR).
Along the way, attacks on the healthfulness of plant-based products from deep meat industry insiders and the media have hurt Beyond Meat and Impossible Foods’ standing with consumers. Beyond Meat was forced to lay off 19% of its workforce by November 2022 as losses squeezed cash flow.
Impossible Foods laid off approximately 20% of its employees in January 2023.
Retail dollar sales of plant-based foods will reach $8.1 billion in 2023, down from $8.2 billion in 2022, according to a report by the Good Food Institute.
Beyond Meat stock price today: $6.97.
McGuinness did not disclose a valuation for Impossible Foods, but it will likely be lower than the $7 billion it achieved in a 2021 funding round.
“This category is not where it should be, so investors are being cautious in some ways right now,” McGuinness said.
Find other episodes of Opening Bid in our video hub. Watch on your favorite streaming service. Or listen or subscribe on Apple Podcasts, Spotify, or wherever you find your favorite podcasts.
Target (TGT) needs to get its act together, retail expert Jeff Macke said on the episode. Listen to his paper on the opening bid below.
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