Silicon Valley sets sights on disrupting meat industry

Bill Gates-backed start-up secures national US distribution for its veggie burgers.

The Financial Times
Financial Times
Published in
3 min readNov 14, 2017

--

Giselle Guerrero — Impossible Foods Inc.

By Chloe Cornish

Impossible Foods, a company backed by Bill Gates that promises to make veggie burgers palatable for carnivores, has secured distribution from top US restaurant suppliers in deals that will test the ambitions of Silicon Valley start-ups to disrupt America’s meat industry.

Venture capitalists have embraced California-based food tech start-ups, like Beyond Meat and Memphis Meats. Impossible Foods alone has raised $273.5m from investors including Google’s venture capital arm, Khosla Ventures and Temasek Holdings.

Commercial distributors including multinational restaurant supplier Sysco, a $28bn market cap food service company, have recently begun offering Impossible Foods’ soy and wheat-protein burger.

“We see the demand for plant-based proteins coming from the rising flexitarian segment,” said Stacie Sopinka, vice-president of innovation and product development at US Foods, which serves some 250,000 restaurants and is also carrying Impossible products. A “flexitarian” tries to reduce their meat consumption.

However, food — which is heavily regulated — has proved harder to reinvent than other industries targeted by Silicon Valley. Its economics are still unproven, cautions former tech investor Todd Boyman, now chief executive at plant-based meat company Hungry Planet.

“The way that a food business and a software company scales is fundamentally different,” he said, citing factors like the food industry’s tough margins. “It’s not bits and bytes, its burgers and bites.”

Despite having been available for at least three decades, plant-based meats have yet to make a significant impact on the US consumer market. While meat substitute sales grew 6 per cent in US stores last year, according to research firm Nielsen, that still constituted just over 2 per cent of the overall meat market.

Meanwhile, US consumption of red meat and poultry has actually risen — up 4.3 per cent since 2011, according to US Department of Agriculture economist Keithly Jones. He described plant-based meats as…

--

--