Talk about getting a visit from the fairy godmother on the eve of the big ball.
After a long search for capital that had hampered business development and, ultimately, its ability to service some clients, natural and specialty DSD distributor Green Shoots announced yesterday that it has landed what it termed “its first multi-million-dollar capital raise” – right on the eve of its client base’s biggest sales event, Natural Products Expo West.
Well-regarded for its high-touch frequency and sway within the incubation channels like Whole Foods, universities and natural and specialty retailers, Green Shoots had nevertheless been scuffling recently, with some clients departing the enterprise due to slow payment of receipts and concerns that the scrappy, entrepreneurial crew behind the company lacked the ability to follow through on a financial and organizational level.
Green Shoots’ leadership ascribed the problems solely to the pressures of being short on capital.
“We’ve been hand-to-mouth, raising in dribs and drabs,’ said company co-CEO Ben Lewis, acknowledging some of the problems faced by Green Shoots. Lewis, called the minority investment – from Pergament LOHAS Fund, a company dedicated exclusively to companies falling under that healthy living acronym –“long overdue for us. We’ve been chronically underfunded since day one, and we’ve picked up some scrapes and bruises as a result.”
Founded by former Odwalla sales executive Nat Noone, Green Shoots has always seemed to play the role of “enfant terrible” in the natural and specialty world, wedged between the trucks of the channel’s two biggest distributors, UNFI and KeHE, and the small and regional broker networks upon which many entrepreneurial brands first get to market. In starting Green Shoots, Noone sought to provide a high level DSD service in cities that are highly relevant to the organic movement like San Francisco, Los Angeles, Austin, Boulder, and Washington, D.C., among others, bringing in a team of knowledgeable and influential sales and account managers from Odwalla and other brands. His team has been widely praised from the beginning, and Noone’s ability to spot potentially winning clients has been unquestioned. Seeking to steady his financial ship, Noone brought on Lewis, who is himself the entrepreneur who started charity-focused GIVE Water while still a college student — as a partner soon after starting the company.
On the beverage side, Green Shoots either carries or has carried beverages like BluePrint Cleanse, Columbia Gorge Organics, Spindrift Soda, Chameleon Cold Brew, and Sambazon in the past, and is known for providing both distribution and incubation services, including sharing often hard-to-get sales tracking data with its customers.
But as Green Shoots developed its network – one that features both regional and local brands as well as fast-turning trend-drivers like BluePrint – it found it hard to keep up with invoices.
Green Shoots has been an early advocate of the switch by many juice companies to High Pressure Processing (HPP) and has carried several brands employing that technology as it has risen to prominence in the past two years. That did not go unnoticed by the company’s new investor.
“There’s a food revolution going on right now,” said Pergament LOHAS founder Arthur Pergament in the deal announcement today, “and it can be summed up in one word: Fresh. Consumers today want fresh, healthy, simple and sustainable products, and they want to see them on the shelves of stores where they regularly shop. Greenshoots is the only player devoted to that value proposition. We see them as a potent, disruptive force in the food business and a company that’s shaping the kind of future we want to support.”
With Pergament’s capital on board, the company will be able to play a role in that future, Lewis said. He added that, while the battle for capital had been wearying, Lewis added, the Green Shoots team has remained steadfast and the company’s survival has been dependent on its hard work. The company proudly touts itself as employee-owned and is a B-Corporation.
“The team is what’s carried us this far,” he said. “Our commitment and capabilities are only going to be amplified with this capital raise.”
Noone could not be reached at the time of the announcement.
For Pergament LOHAS, the investment fits well with a portfolio firmly ensconced in the natural and healthy company sector: the fund has invested in such natural products stalwarts as Organic Avenue, Brad’s Raw Foods and Big Tree Farms.