Impossible Foods Partners With Kroger To Develop New Private Label Meat Substitutes
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Kroger has announced a new strategic partnership with Impossible Foods that will see the two companies work together to create a line of proprietary meat substitutes for sale within the retail giant’s numerous locations. Kroger, the largest US supermarket chain, will put Impossible in front of a wider demographic of consumers as it continues to strive for price parity with conventional meat.
Kroger already has plant-based meats in its portfolio. Its Simple Truth brand debuted a beef substitute in 2020, with a range of other meats, including chicken and turkey, following since. News of the Impossible partnership is thought to be adding to nearest rival Beyond Meat’s market value woes. In light of the Kroger announcement, shares fell by a further 7 percent, bringing the total to a 68 percent loss in the past 12 months.
A tried and tested method
The new strategic partnership has been likened to Costco’s Kirkland label; it partnered with Tyson Foods for its fresh meat products. The weight of two large names drives consumer demand and both benefit from the co-branded packaging. It is not yet known which label new products will be sold under or if clear co-branding will be in place.
A Credit Suisse analyst opinionated that news of the partnership will pose a significant threat to Beyond. “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,” Robert Moskow wrote in a note to his clients.
Kroger is expected to release a competitively-priced line of meat substitutes, powered by Impossible analogues. The goal is to put plant-based meats on the menu for price-conscious shoppers as well as less budget-restricted households. Traditionally, Beyond and Impossible have been considered as expensive alternatives to conventional meat, resulting in cautious purchasing. As meat prices continue to rise, now is a prudent time to offer well-priced alternatives.
No information has been revealed as to potential products or projected release dates but Impossible has formally confirmed the partnership.
The year of Impossible?
2022 has started out strong for Impossible. In January, it revealed its vegan chicken nuggets will be sold in AMC movie theatres, across 37 U.S. states. It follows demand for more vegan options in cinemas.
Most recently, Impossible revealed a new line of nuggets, marketed at younger eaters. Shaped like endangered animals, the ‘Wild Nuggies’ include polar bears and black rhinos. They are designed to be an easy route into plant-based eating for children and offer an educational component about why such foods are better for the environment.
Countless new developments are anticipated from Impossible in 2022, following a $500 million funding round in November last year. To date, the company has secured $2 billion since being founded in 2011. The latest round was led by existing investor Mirae Asset and created a company value of $7 billion. Global expansion was cited as a driving motivation for the raise. d
Elsewhere, Beyond Meat has been facing challenges of its own. Despite announcing new restaurant partnerships with Panda Express and Pizza Hut Canada, the brand is struggling to regain ground after a plummet in stock value. CEO Ethan Brown has predicted full recovery this year, blaming previous poor performance on Covid-19 difficulties.