Impossible Burger’s parent company enters $100 million market after $270,000 lobbying effort


Source Link

Just a few months ago, it was impossible for Impossible Burger’s parent company to compete with Beyond Meat in grocery stores.

While Impossible Foods Inc.’s plant-based offerings were hits at Burger King












QSR, -1.06%










and White Castle, the privately held Silicon Valley company could not sell its meatless products containing a key ingredient, heme, in supermarkets until it scored an approval from the Food and Drug Administration. This meant that the company was potentially missing out on a market worth about $100 million a year.

Impossible Foods secured the FDA’s OK on July 31 after a lobbying effort, and it began selling its Impossible Burger products in grocery stores in September. The approval has come as the company disclosed lobbying spending of $270,000. It reported $10,000 in Washington lobbying expenses in 2017, then $200,000 in 2018, and $60,000 in this year’s first half, according to OpenSecrets.org data.

Impossible Foods declined to say how much of that lobbying was directed at the FDA, with a spokeswoman saying it “does not comment on lobbying expenses or strategies.” But the company’s outside lobbying firms have included BGR Group, which bills itself as an adviser on “legislative and regulatory policy matters” involving the FDA.

Heme had not been sold before in uncooked form and was met with some skepticism from the FDA and consumer advocacy groups. Impossible Foods first had to prove that it was safe to eat the plant-based ingredient extracted from the roots of soybean plants. The FDA responded in July 2018 with a “no questions response,” which is seen as an approval.

But since heme is also used as a color additive that provide a “bleed” effect, Impossible Foods filed an additional petition with the FDA in November 2018. The petition was approved eight months later, clearing the way for distribution in grocery stores.

Related: I tried Beyond Meat’s burgers three times — here’s what I thought

Beyond Meat Inc.












BYND, -0.90%










has not disclosed any lobbying spending in Washington, D.C. The El Segundo, Calif.-based company’s meatless products, which feature pea protein and beet juice, appeared on store shelves in 2016. Beyond Meat has made an effort to emphasize that its offerings don’t contain heme.

“We’ve received a number of questions from our Beyond Meat consumers about heme, which we do not use,” the company said in a post on its website in 2017.

“These inquiries reinforced our understanding that folks often confuse us with Impossible Foods. We get it — there are some similarities. Our founder is named Ethan Brown. Impossible’s founder is named Pat Brown (no relation). Also, Bill Gates is an investor in both companies. And we both make plant-based burgers that the media has dubbed as ‘bleeding veggie burgers.’”

But then Beyond Meat’s post highlighted a key difference, urging customers to look at a list of retailers already selling its products at that time: “We’re up to about 2,000 stores nationwide!”

Impossible Foods is now finally getting a chance to play ketchup, if you will. The company last week emphasized that its Impossible Burger became the top-selling item at some grocery stories following its debut.

Related: How Beyond Meat can lose the lead in the plant-based meat category to Tyson

Also see: Why some restaurants are turning up their noses at Beyond Meat

Grocery stores represent a growing distribution channel for Impossible Foods and its competitors, said MKM Partners analyst Brett Levy in a recent note.

“Distribution availability is inching up,” Levy said. “Beyond has been a more active player in the at-home channel, including the availability in the likes of major chains like Safeway and Kroger












KR, +0.44%










 , but recent weeks have seen Impossible Foods products make their ways onto the shelves of a few west and east coast chains.”

Supermarkets look like a market worth at least $100 million a year, given that Beyond Meat alone has reported $54 million in retail revenue in this year’s first half.