Impossible Foods lays off 6% of employees

Dive Brief:

• About 6% of employees at Impossible Foods have been laid off as part of a company reorganization focused on the plant-based meat maker’s future growth, CEO Peter McGuinness said in a memo sent to employees that was seen by Food Dive.
• The layoffs involve “roles that have become redundant to others in the organization or that are no longer aligned with our core business priorities,” the memo states. Laid off workers are receiving severance based on their time with the company, extended benefits and job placement services.
• As growth in the plant-based meat space has slowed down, many companies in the space have been re-configuring their business plans. Last week, JBS USA shuttered its Planterra plant-based business, and Beyond Meat and Maple Leaf Foods’ Greenleaf Foods have both recently cut employees.

Dive Insight:

While many plant-based brands have cut staff because of recent stagnant growth — if any at all — this isn’t necessarily the driving force behind Impossible’s layoffs. As a private company, Impossible Foods doesn’t have to report its sales, profits and losses. But in an interview with Bloomberg Technology last month, McGuinness said the company is growing 65% to 70%, its balance sheet is strong and its cash position is good.

The memo from McGuinness outlined the company’s need to grow and evolve, adapting quickly while being aware of issues in the plant-based category itself and the broader economy. Impossible Foods, according to the memo, is working to strengthen its operations, build out supply and demand functions, and invest further in innovation in order to “continue to hyper grow.”

“[W]e still need to prioritize the projects and initiatives that will best fuel our business and mission as we prepare for our next phase of growth,” the memo says.

Impossible Foods’ reorganization has taken steps the company says will help it operate better, with more agility and speed, according to the memo. Since the summer, the company says it has been creating clearer supply-and-demand functions and focusing the R&D and innovation pipeline.

These are the biggest changes to come to Impossible Foods since McGuinness took the helm of the plant-based meat company in April. McGuinness, who had previously served as president and COO of Chobani, pushed the company that brought Greek yogurt to the United States into new product lines and categories, including plant-based yogurts, coffee, peanut butter and milk.

At Impossible Foods, McGuinness replaced founder Pat Brown in the top job. Brown, a medical doctor and scientist known for his straight talk on the food system, first became Impossible’s chief visionary officer, responsible for research and technology innovation, strategic initiatives and public advocacy. Last week, Brown transitioned again to lead a new venture affiliated with the company. According to reports on a memo sent to employees, this venture will “focus on the transformative innovation that will propel Impossible Foods to achieve our mission,” and is tentatively known as Impossible Labs.

Impossible has launched new innovations during McGuinness’s time at the helm, including plant-based chicken patties — currently being trialed on sandwiches at some Burger King restaurants — frozen meals and a reformulated Impossible Burger that has less fat than 80/20 ground beef.

But the way that McGuinness talks about the company’s strategy is different. In his interview with Bloomberg, McGuinness talked about wanting to increase access to Impossible’s products, ramping up the company’s total distribution points for retail and foodservice. He said there is a lot of room for Impossible to go. But there’s also a consumer understanding piece that needs to be there. Impossible Foods and the rest of the plant-based space, he said, need to do a better job of explaining to consumers why their products are both better for their health and the environment.

In contrast, the other recent plant-based meat company cuts were likely all about slow sales. In its most recent earnings call, Beyond Meat CEO Ethan Brown said company’s layoffs were a direct result of the economic situation and to help the company keep its costs down. Maple Leaf’s reductions in plant-based were the end result of a division review following an abrupt halt in sales. CEO Michael McCain said in the company’s most recent earnings call that the action was right-sizing the division to growth potential, “essentially a straightforward exercise of sizing the shoe to fit a new foot.” JBS USA provided no explicit reasons for the closure of Planterra, but all 121 employees in the division’s operations and manufacturing plant lost their jobs.