Lessons from scaling Impossible Foods with Nick Halla, employee #1 and former SVP at Impossible Foods
On creating new markets, building a global climate brand, and scaling a hard-tech company to 800 employees globally.
Welcome to Down to Zero where we (Florian & Shaneez) speak with climate tech leaders about how to build a successful climate-tech company. Follow along to learn their playbooks and how you can apply them to further your career in climate-tech.
Livestock farming accounts for 15% of greenhouse gas emissions. But over a decade ago, back in 2011 when Impossible Foods was founded, most people hadn't heard of climate change or didn't care much about it. They definitely were not making decisions about what to eat based on what they thought was good for the earth.
So how do you develop a go-to-market strategy for a market that doesn't exist yet? And how do you scale to become a global consumer brand with a climate mission?
We sat down with Nick Halla to answer these questions. Nick joined Impossible Foods as employee #1 a month before it launched. He spent 11 years with the company and eventually ran their retail and international strategies as SVP.
Read on for a (shortened) version of our interview with Nick about the strategies that helped Impossible Foods grow into a market leader in the plant-based meat industry with 800 employees across 10 markets.
Impossible and the nascent plant-based meat market
What did the plant-based meat market look like in 2011? What did Impossible look like in the context of that market?
Back then, the plant-based meat market was in its infancy. A lot of products were made primarily for vegetarians and vegans without truly mimicking the taste, texture or experience of animal meat. It showed us that we need to take a different approach. We needed to outperform and out-compete beef. So better flavor, better texture, and all the other properties. Then it becomes healthier, more sustainable and, as you scale, more affordable.
The first two years were all basic science to understand what actually makes meat, fish, and dairy foods what they are and then find better ways in the plant-based world to do this. I remember talking to our CEO Pat Brown on this and he's like: Give me every single plant-based ingredient in the world. And I was like: Any more specificity to that? He's like: No. It was a big part of my job to take his vision and find a way to execute towards it.
We started doing prototyping and the first products were pretty rough. Within 3-6 months, it was getting close. And after 12 months, consumers saw it as meat in a blind taste test. It wasn’t preferred, but it was in the category. Those were some of the really big moments that showed us: We're on the right path. We've made some big discoveries on the science side that can enable us to build stuff that no one's ever done before.
How Impossible crafted a story and built credibility via a focused B2B2C go-to-market with famous chefs
How did you think about your initial go-to-market strategy back then?
We realized early on that we have to do something different. If we end up doing the same thing that all other products (i.e., launching in a retailer), we were going to get grouped into the same category of other vegan products. But the consumer that we have to convert to drive a more sustainable food system are the avid meat lovers. People were not making food choices based off of sustainability and we knew we needed to change that story. And we're also going to be low on volume right away. We're building a new technology and we're not going to have a huge production site running right away. So, we needed to 1) build credibility, 2) change the story, and 3) use our small volume for a big impact.
That led us to look at influencers in the meat world - the chefs at the most influential meat shops. We found [the Michelin-starred, award-winning chef] David Chang in New York. He had said that he's never going to serve a vegetarian product on his menu, but then we did a pitch with him, he was blown away, and he ended up being our launch chef. That sends a message from day one that this is not a veggie burger. This is meat made from plants, for our meat eaters. We then curated the first couple dozen restaurants. It helped build credibility and gave us platforms to tell stories.
How would you rate yourself or the team on the success of that initial go-to-market approach with chefs and celebrities?
It worked really well. Every little piece built on top of each other. We would use toothpicks with flags with the Impossible logo on it. And then that was all over social media. Now everybody does it. There were so many branding opportunities that really hadn't been used much before.
The first year gave us time to get the company operations in place, learn how to sell, how to deliver, how to distribute, how to support the brand, how to do comms. If we wanted to do big launches with hundreds and hundreds of stores right away, our team wouldn't have been ready for that. And then as the first production site goes on, you got to start scaling pretty quickly. And I think we queued up a lot of that from those early days’ success.
How did you make the call that you weren’t ready to go big at first, and when did you know to change?
You never know. The first 50 employees were pretty much all scientists. It takes time to transfer that into an applied science, engineering and eventually commercial orientation. We never produced food before, so we needed to build up credibility as well. No big customer is going to take the risk on someone who has never sold food before. I think what a lot of companies get wrong is going from zero to 100 right away at launch.
Were there any unexpected challenges in go-to-market or externally in changing customer behavior, and how did you overcome those challenges?
Definitely a lot of challenges. We went from essentially one restaurant seating to about 30 very good meat-oriented restaurants to tell the story, and then some better burger chains. Once you have an actual facility, you can produce a thousand X. But it takes time to build that sales ramp for physical products because you're building the supply chain and your operational capability. It’s much easier for soft tech.
Going from 30 restaurants to 3000 and 30,000 and 100,000 are all massive jumps in the complexity of what you have to do. When we had 30 restaurants, we were lucky to be in the situation where we had raised enough capital to be hands-on and almost offer a white glove service. When you scale, you have to have systems that can handle the volume because you can't be that hands-on anymore.
And when you have a culture that wants to succeed in everything you do, with a lot of really high achievers, letting something go and saying we're going to be light touch with all those customers now - it's hard to do. It’s also a big shift when you go from a research focus to a commercial focus. During the R&D phase, you can always do better, you can always learn more. But at a certain point, you have to say lock it in and let’s ship. It takes leadership strength to push through. That all changes the culture of the company.
What are lessons for building a hard tech company can other entrepreneurs take away from this first phase of the company?
It's good to have a vision like that, but it doesn't do any good if you don't create a practical business that you can execute. It's really good to have coalescence of the culture around the vision, but then think about what you have to do in the first year and the first five years to succeed. One of the more powerful statements we worked through over time was: It's not a no, it's just not now.
For Impossible, our goal is to produce all meat, fish, and dairy foods that we consume today. But when we were in the market, it was the Impossible ground beef from plants product for several years only. We needed to get that right to then expand the platform to sausage, bratwurst, chicken breast, chicken nuggets, and more.
And then from a hard tech perspective, hard tech is hard. Expect things to go wrong. Have a solution-oriented company mindset. Some of the best times at Impossible were when we went through crises. Everybody had each other's backs and the belief that we will make sure that we're going to come out of the other end much stronger.
From restaurants to retail: Impossible Foods' strategic expansion for rapid scale
What were the considerations on going direct-to-consumer after eight years when previously Impossible had mainly focused on the B2B2C channel?
We had a lot of debates on this. The US ground beef market is roughly half food service, half retail. Are we better off just focusing and making sure we get a bigger share of the food service market, or do we add retail?
If you go to a restaurant and you have Impossible, you want to buy it in the store as well and take it home and cook it. We wanted to give that experience to the home consumer as well. That meant we had to pivot the company again because we were all food service-oriented. It took us about nine months to build a retail business.
We launched in about 150 doors and outsold the entire ground beef category for the first 10 days of the launch in LA. Back when Impossible started, sustainability was #15 on the consumer purchase driver lists. After we launched retail, it was #3.
That was really driven by our messaging, comms, marketing, and design. How many brands have been a food service brand with this much awareness, notoriety, excitement before they entered retail? Pent up demand was so strong that it enabled to do this really big launch and scale through retail really, really fast.
What were the factors that made this so successful? What can other entrepreneurs take away to possibly replicate a success like that?
Look for proxies in the market for what you've seen succeed. But then I also think what are you trying to accomplish and what can you do creatively? When people see something different, it's much more interesting.
With Impossible, what helped us really do this? We had a big vision and a big mission. We're also a bit edgy. If it's too pristine and perfect, it's not quite as interesting. We were challenging a big food system, and then we do the impossible.
Look at how can you find ways where you can use your smallness to your advantage and punch above your weight. For us, it was the meat influencers of the world. And they helped us really tell the story and then helped us get the media pull so that we would not spend a lot of money in marketing but get a lot of awareness from it.
I love how you embrace the David versus Goliath narrative and then turn that to your advantage. But another David emerged, which was Beyond Meat. As competition grew, how did that affect your go-to-market approach and your sales motion, both on the retail side as well as the food service side?
Our competition is much more the meat that we're replacing than the plant-based competition. So, in a lot of ways, the best thing we can do is build this industry together. Animal foods are probably a $1-2 trillion business a year, and there is not one company that's going to be able to change that system.
But of course, certain customers are going to hear of one product vs. the other. It starts with the best product. That’s why we did so much research for so long to create a product range that really can compete with the animal product in blind taste tests.
What happens a lot in venture cycles is once some companies have some success, lots and lots of companies globally pop up. And you saw that. But the customer base wasn’t ready for that many brands and companies and products. Plus, the plant-based industry has not been immune to the general venture slowdown in the last year and a half either. I think what you're going to see is that once you get the fundamentals right with the base companies, that you go back to high growth.
How did your role change as the company scaled?
It is very different when you go through the different phases. I had to recreate myself many times as a leader. And one of the biggest things was to let stuff go. The first five years, it was my job to figure out the vast majority of the business stuff. But as you scale an executive team, I had to let go. Even if new executives do it differently than I would have, that's not a bad thing. And then for me, it's about how to help empower them. The early days you have to wear all the hats. And then as you scale, you have to take your hats and get rid of some of them and give them to other people.