Starbucks (SBUX) Follows Burger King (QSR) Into Impossible Foods Country

If the thought of eating plant-based ersatz meat gives you a thrill, but the thought of going to a Burger King (NYSE: QSR) for breakfast leaves you cold, there's a great new option on the horizon for you. The Impossible Foods juggernaut just keeps rolling along, as Starbucks (NASDAQ: SBUX) announced that it would be bringing the Impossible Foods sausage to its own menu with the release of the Impossible Breakfast Sandwich at most of its locations.

Starbucks Being Starbucks

Naturally, Starbucks isn't planning to just toss the Impossible sausage on any old slice of bread; that's not at all in keeping with its image. No, Starbucks means to put the Impossible sausage on “artisanal ciabatta bread”, backed up by a “cage-free” fried egg and rounded out with “aged” cheddar.

Impossible Foods' CEO, Dr. Patrick O. Brown, called the move a “new benchmark” for large corporations, as Starbucks exhibited a clear commitment to put more plant-based ingredients into its menu options. Meanwhile, Starbucks' own chief sustainability officer noted that this was part of Starbucks' overall push for—no surprise here—better sustainability practices.

It was also noted that this came about as a result of increasing consumer demand for Starbucks to bring the plant-based meat-product to its own stores.

Starbucks Being a Laggard

It likely also doesn't help matters that Burger King rolled out its own Impossible Foods sausage-based sandwich around a week ago.  As can be clearly seen from Starbucks' ingredients list in making the new sandwich, Starbucks needs to be a leader and innovator to maintain its upscale branding. Coming in second to Burger King is not a good look for a company that focuses on upscale clientele.

Worse yet, Burger King didn't just recently roll out its own Impossible Foods sandwich; it had been testing the sandwich since back in January. That gives Burger King almost six months' lead time on Starbucks, which is a disaster no matter how you slice it. Sure, the coronavirus contributed some reason for lag in there, and obfuscated that extra lead time nicely, but it's clear that Starbucks needed to join the plant-based meat stakes in as rapid a fashion as it could.

The Real Winner Here? Impossible Foods.

While it would be easy to quibble over who's doing the best job of bringing the plant-based meat alternative to breakfast, there's one clear winner in all this: Impossible Foods. The company has exploded in popularity over the last several months, gaining new clients and bolstering its image.

Impossible Foods featured two major client-adds in as many weeks with Burger King and Starbucks, which is a huge step on its own. The fact that it was recently named to CNBC's Disruptor 50 list certainly doesn't hurt either, even though it was brought in at number 49. It's got celebrity backing from some fairly big names in the field—Serena Willams and Katy Perry are both in on the Impossible sausage—and it even has some plans for expansion.

Impossible Foods' CFO, David Lee, noted that Impossible Foods is trying to move away from being associated with being “plant-based”, as it's trying to break out of the market niche it's found itself in. Some might not call that a good idea, but if Impossible Foods wants to take aim at a broader market, it might need to do just that.

Right Place, Right Time

Here's the real winner for Impossible Foods, and one that should serve it well when it decides to be anything but privately-held. The coronavirus gave this company a huge boost thanks to the many knock-on effects the virus brought with it, including perhaps not the least, shutting down or severely curtailing meat processing operations.

With beef and pork on an upward shot price-wise, that was likely all people needed to take a look at the plant-based sausage product in freezer cases over the rims of their mandatory face masks and wonder if maybe this was such a bad idea. That's likely most of the marketing impetus Impossible Foods needed to put out in the market, and it may well have won some converts. In fact, David Lee noted that nine out of 10 Impossible Foods buyers were meat-eaters looking for an alternative in the face of climbing meat prices and diminishing meat supply.

Whether Impossible Foods can hold these gains once things finally—and hopefully soon—go back to normal remains to be seen. But it's clear that, for now, it's gaining a lot of traction in the broader market.