Latest / Startup Stories with Fexingo: Conversations About Founders, Funding, and Building Companies from Zero / How Impossible Foods Changed What We Eat
Transcript
- Lucas: There's a moment early in Impossible Foods' story that I think gets overlooked. The company was founded in 2011 by Patrick Brown, a Stanford biochemistry professor. And in the first few years, he raised about seventy-five million dollars from investors like Khosla Ventures and Gates Ventures. But the thing is, most of those early backers were betting on a science project, not a business. Luna: Right, because the idea that you could make a burger from plants that actually bleeds and sizzles like beef — that sounded like science fiction. Lucas: Exactly. And the key scientific breakthrough was heme — that's the iron-containing molecule that gives meat its flavor and color. Brown's team figured out how to produce heme from soy leghemoglobin using yeast fermentation. That became the core IP. But here's the strategic choice I want to focus on: from day one, Impossible decided they were not making food for vegetarians. Luna: That's a huge gamble. Most plant-based products at the time were marketed to people who already avoided meat. They were going after the carnivore. Lucas: Exactly. Brown said in interviews that the mission was to completely replace animals in the food system by 2035. You can't do that by convincing vegans to eat more veggie burgers. You have to win over the person who loves a double cheeseburger. So the product had to be indistinguishable from beef — not 'good for a plant burger,' but actually better in some ways. Luna: And that drove everything from the R&D to the branding. The packaging, the name — 'Impossible' — it's bold, it's not apologetic. Lucas: Exactly. And the go to market strategy was just as deliberate. Instead of trying to get into grocery stores right away, they launched in high-end restaurants. The first commercial product was the Impossible Slider at Momofuku Nishi in New York in 2016. David Chang, the chef, put it on the menu. That gave it instant credibility with foodies and early adopters. Luna: Smart. Because if a chef like David Chang serves it, it's not a health food — it's a culinary product. Lucas: Right. And then in 2019, they landed the partnership with Burger King for the Impossible Whopper. That was the watershed moment. Suddenly, the product was available in over seven thousand locations. The publicity was enormous — Burger King reported foot traffic increases in stores where the Whopper was launched. Luna: But even with that, I remember reading that the actual sales volume was modest relative to the hype. A lot of people tried it once, but didn't switch permanently. Lucas: That's the challenge they've faced ever since. The early adopters were curious, but repeat purchase rates among mainstream consumers have been lower than expected. And that's partly a taste and price issue. Impossible has had to keep improving the product — the 2.0 recipe, then the 3.0 — and they've had to cut prices to get closer to parity with ground beef. Luna: And the competition has gotten fierce. Beyond Meat went public in 2019, then hit a valuation of over ten billion dollars. But then sales slowed, and the stock collapsed. Impossible stayed private longer, but they've had to raise a lot of money — over one point five billion dollars by my count. Lucas: Yeah, the capital intensity of this business is brutal. You're building fermentation facilities, supply chains for ingredients like soy protein and coconut oil, and you're competing with a commodity that's heavily subsidized. The US government spends billions supporting the cattle industry. Impossible doesn't get those subsidies. Luna: So how does the unit economics work? Can they actually make money on a single patty? Lucas: That's the billion-dollar question. In 2024, industry analysts estimated that the plant-based meat category was still losing money overall. Impossible's own gross margins have been under pressure because of ingredient costs and production inefficiencies. They've had to lay off staff at least twice — once in 2023 and again in 2025. Luna: That's a sobering reality check. But they're still around, still innovating. They've launched Impossible Sausage, Impossible Chicken Nuggets, and they're working on whole-cut products like steak. Lucas: And the market is still growing. The global alternative protein market was estimated at about fifteen billion dollars in 2025, and it's projected to grow at a compound annual growth rate of around twenty percent through 2030. So the opportunity is real. The question is whether any single company can capture enough of that to become sustainably profitable. Luna: It reminds me of the early days of electric vehicles. Everyone was excited about Tesla, but the path to profitability was much longer and harder than anyone expected. Lucas: Exactly. And that's actually a good parallel. Both industries require massive upfront investment in manufacturing, both rely on technology improvements to drive down costs, and both face entrenched incumbents. But Tesla eventually got there. The question for Impossible is whether they can do the same in food. Luna: And whether they have enough runway. They raised a big round in 2024 — about five hundred million dollars at a valuation reportedly around seven billion, down from the peak of ten billion in 2021. So they've got capital, but investors are watching the burn rate closely. Lucas: Speaking of keeping the lights on — and this is a bit of a tangent, but it's related — the show you're listening to, Startup Stories, is ad-free, and it stays that way because of listeners who chip in. If these conversations have moved your work forward in some small way, a couple of dollars a month genuinely makes a difference. You can support us at buy me a coffee dot com slash fexingo. Luna: Yeah, it's a small gesture that adds up. Keeps us independent and focused on the stories that matter. Lucas: All right, back to Impossible. One other thing I want to highlight is their regulatory strategy. They had to get FDA approval for heme as a color additive, which took years. And they've faced lawsuits from competitors and consumer groups over the use of the word 'meat' on labels. They've won some battles and lost others. Luna: That's a whole front of the business that most people don't see — the legal and regulatory work. It's not just about making a good burger. Lucas: Exactly. And I think that's the lesson from Impossible Foods: building a company that aims to disrupt a massive, entrenched industry requires excellence on multiple fronts. You need the science, the branding, the supply chain, the partnerships, and the regulatory navigation. And you need a founding team that's willing to take a very long view. Luna: Patrick Brown is still the CEO, which is unusual for a company that's raised that much money. He's a scientist, not a traditional business leader. Do you think that's an advantage or a liability? Lucas: I think it cuts both ways. On one hand, his scientific background gave the company credibility and kept the focus on the core technology. On the other hand, some investors have questioned whether he has the operational chops to scale the business. But he's brought in experienced executives like Dennis Woodside, the former CEO of Dropbox, as president. So he's surrounded himself with operational talent while staying focused on the mission. Luna: And the mission is still the same: replace animals in the food system by 2035. That's nine years from now. Do you think they can get there? Lucas: I think it's aspirational. But even if they don't hit that exact timeline, they've already changed the conversation. Before Impossible, the idea that a plant-based burger could be a direct replacement for beef was fringe. Now it's mainstream. Every fast-food chain has a plant-based option. That's a real shift, and Impossible deserves a lot of credit for it. Luna: Yeah, and it's worth remembering that the company started in a lab at Stanford. One professor's conviction that he could re-engineer the food system. That's the kind of bold bet that makes startup stories so compelling. Lucas: Absolutely. And it's a reminder that the hardest part isn't the idea — it's the execution over a decade-plus. Impossible Foods is still in the middle of that journey. We'll see how it ends.