Impossible Pork Char Siu Buns are being tested during Impossible Foods’ CES 2020 press conference at the Mandalay Bay Convention Center on January 6, 2020 in Las Vegas, Nevada.
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Kroger announced at an investor event on Friday that it has partnered with Impossible Foods to create meat substitutes for its private label business.
Shares of Impossible’s rival, Beyond Meat, fell more than 7% in afternoon trading; the stock fell 68% in the last 12 months, dragging its market value to $ 2.72 billion.
Credit Suisse analyst Robert Moskov wrote in a note to customers on Friday that the Kroger-Impossible Foods relationship could be a threat to Beyond.
“We see this test as a threat to Beyond Meat because it demonstrates the desire of a major competitor to ‘shrink’ in co-branded private label products to maximize the range of its products,” he wrote.
Moskow compares the test to the co-branding strategy that Costco’s Kirkland line uses for fresh meat from major suppliers such as Tyson Foods. These products have both the Kirkland and Tyson logos on their packaging.
The partnership can introduce alternatives to the meat of more consumers, especially those who are more price sensitive. Both Beyond and Impossible are pushing for price parity with animal meat, which could attract more buyers to switch to their products. Rising meat costs in recent months have helped both companies move closer to that goal.
Kroger has already been involved in private label vegetable meat. The retailer, which is the largest supermarket chain in the United States, launched an alternative to beef in 2020 under its Simple Truth brand. Since then, he has released meatless turkey slices, plant-based chicken patties and other meat substitutes.
A spokesman for Impossible confirmed the partnership, but declined to give further details.
Impossible is privately owned, so you don’t have to share your financial results publicly. However, Reuters reported nearly a year ago that the startup was researching listing through an initial public offering or special purpose acquisition next year.