Impossible Foods, the US plant-based meat business, reportedly plans to cut about 6% of its jobs as part of a restructuring exercise under new CEO Peter McGuinness.
The recently-appointed chief executive, who joined the Impossible Burger maker in April, informed staff of the proposals on Thursday (6 October) in an internal memo seen by Bloomberg.
The US-headquartered news agency added a business reorganisation has been in consideration for the past two months. It is based around “clear supply-and-demand functions”, Bloomberg said, noting the California-based business employs 800 people.
Just Food had not received a response from the privately-owned company at the time of writing to verify the plans, which would appear to have the backing of founder Pat Brown, who took on the role of so-called chief visionary officer with the appointment of McGuinness.
While the details are not yet clear cut, the proposals fit with the general perception of slowing demand for plant-based meat in the US. Earlier this week, animal meat giant JBS in Brazil revealed an intention to exit its Planterra Foods meat-free business in the US only around two years since the launch of the Ozo brand.
There have been months of speculation around the status of the category in the US, first set off last December with a profit warning from Beyond Meat – Impossible Foods’ nearest rival, also located in California. Around the same time, Maple Leaf Foods in Canada launched a review of its animal-free protein operations, concluding later that consumer demand did not live up to its expectations and assumptions.
The “very high category growth rates previously predicted by many industry experts are unlikely to be achieved given current customer feedback, experience, buy rates and household penetration”, Maple Leaf has said, amid plans to reduce the size of the business and “right-size” manufacturing.
Alarm bells rang louder in September when The Very Good Food Company, also in Canada and also doing business in the US, effectively put the plant-based business on the market after months of financial uncertainty.
In the memo explaining the changes, including the moves on jobs, Impossible Foods’ McGuinness said “we’ve made the very difficult decision to eliminate certain roles that have become redundant to others in the organisation or that are no longer aligned with our core business priorities”, according to Bloomberg’s report.
“As we continue to scale, we’ll hire strategically to build new muscles and capabilities that will further accelerate our growth.”
As a privately-owned company, Impossible Foods does not reveal its sales and profits like its peer Beyond Meat. Founded in 2009, about two years before the Impossible Sausage and chicken nuggets business, Beyond Meat’s share price has been on a downward spiral this year as its results missed market expectations.
Both companies serve the retail and foodservice channels, with Impossible Foods launching the Impossible Whoppers in the Burger King franchise. Meanwhile, Beyond Meat’s roll-out of its McPlant burger in McDonald’s ended this summer as the fast-food chain pulled the product from its menu after a trial run.
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