Impossible Foods stock update Q4 2023
The alternative meat market has exhibited a notable downturn in recent years, with US retail sales of meat alternatives declining sharply.
According to Circana data analyzed by 210 Analytics, there was a 12.2% year-over-year (YoY) drop to $76.7 million in September 2023 in conventional multi-outlet channels. A 16.5% decrease in volume accompanied this decline. When expanding the scope to the year leading to October 1, dollar sales fell by 9.8% to $1.1 billion, and volumes dropped by the same 16.5% margin YoY.
To provide a broader market perspective, total fresh and processed meat department sales decreased 1.4% YoY to $6.5 billion in September, with a 1.8% reduction in volume. However, looking at the year to October 1, there was a marginal 0.1% increase in dollar sales despite a 1.5% fall in volume. In contrast, frozen processed meat sales saw a 3.5% YoY decline in September, amounting to $424 million, though unit sales increased by 5.6%.
Amid this challenging landscape, Impossible Foods has shown resilience and growth. Their performance in the US retail sector in September reflects a continuation of high single-digit to low double-digit growth in retail, according to Nielsen data. Notably, Impossible Foods boasts a 50% repeat rate among consumers.
Despite the overall category's decline in retail, Impossible Foods stands out as the top-performing plant-based company in the United States. They have consistently increased their market share yearly, significantly outperforming the broader category. This success is attributable to several factors, including product innovation and new packaging initiatives, which are yet to impact the market fully.
Adding to the positive outlook for Impossible Foods, the American Heart Association's certification of their Impossible Beef Lite product is a significant development. This certification, also achieved by Beyond Meat for its Beyond Steak product, serves as a strategic response to concerns regarding the health aspects of plant-based meats.
This certification is a milestone for Impossible Foods and represents a significant aspect of its nutritional positioning and marketing strategy.
Impossible Foods’ stock price
The graph indicates a downward trend in the share price of Impossible Foods, as observed from the fourth quarter of 2021 through the third quarter of 2023. This decreasing trend could potentially signify a market adjustment period or a response to various external factors affecting the company's valuation: Beyond Meat's poor performance, higher interest rates and costs, and slow pick up of alternative proteins in diets.
For investors in Impossible Foods, such a trend might represent a strategic opportunity to purchase stock, as the current lower prices could precede a rebound if the company's new product launches, like Beef Lite, drive positive financial results and market growth.
Conclusion
While the alternative meat sector faces challenges, Impossible Foods remains a beacon of growth and resilience. Their ability to innovate and adapt in a declining market highlights their potential for continued success and market leadership. As the company prepares to unveil new products and packaging, there is an optimistic outlook for its future performance, even in a contracting market segment.
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Disclaimer
Private companies carry inherent risks and may not be suitable for all investors. The information provided in this article is for informational purposes only and should not be construed as investment advice. Always conduct thorough research and seek professional financial guidance before making investment decisions.
