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updated: 7/31/2019 11:47 AM

Impossible Foods inks deal with OSI to expand production

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  • Impossible Foods, maker of the popular plant-based Impossible Burger, is partnering with Aurora-based global food producer OSI Group to ramp up supplies of the burgers.

    Impossible Foods, maker of the popular plant-based Impossible Burger, is partnering with Aurora-based global food producer OSI Group to ramp up supplies of the burgers.
    AP Photo/Nati Harnik, File

Daily Herald Wire Services

The Impossible Burger, so far only available at restaurants, could finally be making its way to U.S. grocery store shelves, giving chief rival Beyond Meat a new competitor inside retail.

The Silicon Valley-based maker of the eponymous burger said Wednesday it had signed a deal with Aurora-based global food producer OSI Group to expand production. OSI will begin making the Impossible Burger starting next month, adding short-term capacity to Impossible's own Oakland, California factory.

Impossible Foods has been struggling since April to meet demand from customers, including big chains like White Castle and Burger King. Over the last two months, it doubled employment at the 68,000-square-foot Oakland plant to 200 people, and it made a record volume of burgers in June. But that still wasn't enough.

"The demand is real, and we think it's going to be sustained for a long time," said Impossible Foods President Dennis Woodside, a former mobile phone executive hired in March to help Impossible scale more quickly. "We hadn't quite planned for the success that we had in the market."

The Impossible Burger is sold at 10,000 restaurants worldwide, up from 5,000 at the beginning of the year.

Woodside says OSI will help the company double its production in the near term and quadruple it by the end of 2019. OSI Group has 65 facilities in 17 countries.

OSI will also help Impossible develop new products like frozen foods.

The company also confirmed it plans to sell the Impossible Burger at grocery stores beginning in September after the Food and Drug Administration amended its rules to call the use of soy leghemoglobin safe as a color additive in imitation beef.

The rule change, in response to a petition submitted by Impossible Foods, clears a key hurdle in the company's push to sell raw product inside grocery stores.

The rule change is effective Sept. 4, though petitioners still have a chance to file objections. The original petition filed in December specified that heme could "not exceed 0.8% by weight" of the final product.

"Should no objections be raised, the direct-to-consumer sale of uncooked, red-colored ground beef analogue products containing soy leghemoglobin will be allowed," the FDA said in a statement.

The OSI deal comes after a monthslong shortage of the popular soy-based beef replacement. Impossible Foods recently moved to three, 8-hour shifts from two, 12-hour shifts in July.

Soy leghemoglobin, or "heme," is the ingredient that gives the Impossible Burger its essential meat-like flavor. Red in hue, it hadn't previously been formally approved as a safe color additive, meaning retailers couldn't let individual consumers purchase the uncooked product the way they can buy and bring home raw Beyond Meat patties.

Impossible isn't the only company having trouble meeting the scorching demand for plant-based meat. U.S. sales of meat alternatives have grown an average of 8% per year for the last five years, according to Nielsen. Meat sales were flat in the same time period.

The successful IPO of Beyond Meat, a California plant-based burger and sausage maker that includes former McDonald's CEO Don Thompson among its investors, has further stoked the interest of consumers and investors. Beyond Meat's share price has leapt nearly 700% since its May debut on the Nasdaq.