Category: Finance,Retail

Impossible Foods partners with Little Caesar's on a meatless sausage pizza.

Source: Impossible Foods

Little Caesars will sell a pizza topped with plant-based sausage crumbles made by Impossible Foods for the pizza chain, the first time a national pizza chain is using a vegan meat substitute.

Little Caesars, which is more typically known for its meatcentric items like a pizza wrapped in bacon, will test the Impossible Supreme, priced at $12, in three markets: Fort Myers, Florida; Albuquerque, New Mexico and Yakima, Washington.

The item comes amidst a surge in interest in plant-based products. According to Nielsen, sales in the category grew 17% last year, compared with a 2% growth rate for other grocery products.

Impossible Foods said its products are now sold in more than 7,000 restaurants, including Burger King, White Castle and Red Robin.

The demand for meat alternatives has been driving rapid growth in the category, and Impossible is looking to boost its manufacturing capacity to avoid shortages.

Impossible said it has increased the headcount and hours of operation at its Oakland, California, plant, and will install a second production line in July that will double its capacity. The company expects the second line to be fully staffed and ramped up in the fall.

"Impossible Foods has a supply chain that's highly scalable, and the product is sourced from abundant ingredients," the company said in an email. "The company faces no insurmountable supply-chain constraints or fundamental bottlenecks; like many successful startups, we are facing short-term ramp-up challenges resulting from demand greatly outstripping supply."

Burger King, a unit of Restaurant Brands International, has been conducting a regional test at 59 locations in St. Louis. The test is going "exceedingly well," Impossible said. The burger chain plans to expand the Impossible Whopper to all 7,300 U.S. restaurants by the end of 2019.

Impossible recently raised $300 million in a funding round but has said it is in no rush to go public.

Rival Beyond Meat's stock has surged since its May 2 debut. On Monday, the stock was down slightly at $88.54.

—CNBC's Aditi Roy contributed to this report.

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