Dean Foods invests in Good Karma
Dairy processor and distributor Dean Foods has made a minority investment in Boulder, Colo.-based Good Karma, a producer of flaxseed-based, dairy-alternative food and beverage products. Originally a private label manufacturer of dairy-alternative milks, Good Karma developed its own branded CPG line in 2014 and expanded beyond beverages to yogurt in late 2016.
The investment will help Good Karma to expand distribution across the U.S. As part of the deal, Dean Foods said it will lend support to Good Karma’s growth in conventional retailers via its sales team. The capital will also go towards brand-building and Good Karma’s product innovation pipeline. Good Karma will operate as an independent company, led by its existing leadership team at its Boulder headquarters.
“We are excited about how this partnership will give us the opportunity to advance our mission of inspiring goodness by making our flax-based non-dairy beverages and yogurts more accessible across the U.S.,” said Good Karma CEO Doug Radi. “Through the increased availability and investments in brand-building and product innovation, we believe we’re better positioned to support families looking for plant-based options that are free of allergens.”
Dean Foods’ investment follows a previous round of funding, led by 2x Consumer Products Growth Partners. At the time of a 2014 U.S. Securities and Exchange (SEC) filing, Good Karma had raised $2 million in funding and was seeking an additional $8 million in capital.
2016 saw Dean Foods exploring new revenue streams. The company acquired ice cream brand Friendly’s and established a joint venture with Organic Valley to distribute the brand’s dairy products. On the company’s fourth-quarter earnings call in February, 2017, Dean Foods’ executives discussed how mergers, acquisitions and investments could help balance the variable price of milk and ebb and flow of that business.
“We’re looking at categories that are adjacent to dairy,” Dean Foods CEO Ralph Scozzafava told analysts. “We’re looking at one particular that would be, what I’d say, a good balance to the commodity seasonality that we see, the cyclicality we see with Class I milk. That would also be, I think, a good addition to the portfolio as we talk about being more and more Class I commodity resistant.”
The investment marks a return to plant-based products for Dean. In 2013 the company fully spun off its Colorado-based WhiteWave division, which included soymilk brand Silk, and sold plant-based protein brand Morningstar.
Legume-based snacking brand HIPPEAS recently announced that Strand Equity Partners and Academy Award-winning actor Leonardo DiCaprio have joined as investors.
The Green Park Brands-owned company launched in the U.S. market in Spring 2016, and is already sold in over 22,000 points of distribution, including Starbucks locations nationwide. Livio Bisterzo, Green Park Brands CEO and Founder, told NOSH that the new funds will mainly be used for working capital to support its retail accounts. This will include expanding full-time staff beyond its current 34 employees, as well as marketing efforts.
“HIPPEAS is a high-growth and differentiated brand that has been created in a short amount of time,” said Seth Rodsky, Managing Partner of Strand Equity Partners, in a statement. “The unprecedented traction the brand has achieved is a testament to its unique offering that combines nutrition with a creative flavor profile. We look forward to partnering with Livio, and the talented management team at HIPPEAS, to lead the next evolution of ‘better for you’ snacking.” Strand has also invested in pulse-based pasta brand Banza and snack brand PopChips.
DiCaprio, who recently invested in sustainable seafood brand Love in the Wild, is also an outspoken environmental activist. Bisterzo said the idea of a plant-based snack resonated with the actor.
Bisterzo said Hippeas wasn’t seeking capital but the company felt the offer from Strand and DiCaprio was unique. “This partnership was opportunistic, it materialized very quickly,” he told NOSH. “For us it was as much about people and values and alignment and having met [Strand founder Seth Rodsky], we felt really comfortable with him being involved in our business.”
Going forward, Bisterzo says there’s opportunity for the brand to use its platform to expand into other pulse-based snacking categories. But he plans to focus on the puffs for at least the rest of 2017.
This year will also see the line move into club channels with Costco as well as increase doors in natural and conventional retailers. Bisterzo says he also plans to continue to build his field marketing team to encourage sampling among consumers.
“With the brand we have, we’re in a really good place,” Bisterzo said. “We just have to put our head down and execute.”
Rampolla To Work at Beanfields
What do you do once you’ve sold your beverage brand to Coca-Cola for millions, written a book about the experience, started a new plant-based investment fund and helped reinvigorate a trendy brand? If you’re Mark Rampolla, the answer is you take a job for free.
In July, Beanfields Snacks announced Rampolla – already an investor in the company – will be joining the company as CEO but draw no salary in the role.
Rampolla has spent the last several years as a managing director of PowerPlant Ventures, the plant-focused fund that owns roughly 20 percent of the pulse-based snack brand. While Rampolla still will hold this title at the venture group, PowerPlant’s Fund One is fully deployed – leaving him with time to focus on Beanfields.
“[The PowerPlant founders] decided as a team, before we dive in and assume we want to or have the right to do further follow-on funds, we’re diving in to help our companies,” Rampolla told NOSH “At least for some indefinite period of time, [we’re] not looking at any new deals.”
Beanfields executives, including its current COO and chief commercial officer, will remain in place at the company. When PowerPlant first announced its relationship with Beanfields and a relationship with nonprofit Homeboy Industries, the initial plan was to have a co-executive team in place of a CEO.
But, said Rampolla, his own excitement for the brand motivated a change in strategy.
“I’m in the very fortunate position where I can do this,” he said. “I looked at this opportunity and in addition to building a really fantastic brand and believing in the business, I really do want to see this work for Homeboy. It was just one of these moments where it’s like ‘I think this thing could be huge and I want to make sure it works.’”
By not drawing a salary, Rampolla said any benefit or success he brings to the company is more of a bonus and he has more freedom in the role both in terms of company direction and maintaining work/life balance. He plans to stay in the role until at least the end of 2018 but more likely for at least two years.
Rampolla previously served as CEO of another portfolio company, Hail Merry, but that role was simply as interim CEO and lasted for only roughly six months. He said that experience taught him that plant-based foods are mainstream and there’s no need to stay small and narrow with retailers and distribution.
Rampolla has been personally and financially invested in Beanfields for some time. He originally had invested on his own in the brand, but sold those shares once PowerPlant invested in order to avoid any potential conflicts of interest.
His personal shares went towards a round last month consisting of top food and beverage veterans including: Aaron Enrico, co-founder and Principal of Black Bear Partners, Chris Hunter, co-founder and CEO of Koia, James Brennan, co-founder of Suja Juice and Enlightened Brand Ventures, Jesse Itzler, co-founder of Marquis Jet, Mike Kirbin and Ira Liran, co-founders of Vita Coco, Seth Goldman, co-founder of Honest Tea, and the founders of Thrive Market, Gunnar Lovelace, Nick Green and Sasha Siddhartha. Also taking part in the round were distributor Big Geyser and investment firm Range Light.
The latest pool of investors has committed at least 10 percent and up to 50 percent of their potential future gains from the investment to non-profit Homeboy Industries, which provides training and support to formerly gang-involved or incarcerated men and women.
ECRM and RangeMe Get Together
Efficient Collaborative Retail Marketing (ECRM) has announced the acquisition of tech company RangeMe, a software that allows buyers to discover new CPG products. Terms of the deal were not disclosed.
Previously RangeMe raised $4 million in a seed round of funding. Buyers from retailers such as Target, Whole Foods Market,, Ahold, The Fresh Market, Jet.com, 7-Eleven and Sam’s Club all use RangeMe for a combination of inbound product submissions and product discovery.
Over 1,200 retailers utilize at least one of ECRM’s offerings, which include arranging for brands to connect with buyers at 1-on-1 meetings.
As part of the deal, both Jackson and her team will remain with the company. The headquarters for RangeMe will remain in San Francisco, California, and not relocate to ECRM’s headquarters in Solon, Ohio. RangeMe will also continue to support its overseas retailers and producers.
Greg Farrar, ECRM CEO, told NOSH he thinks the acquisition will offer a new way for brands and buyers to come together.
“We’re excited because we have the same view of the marketplace, the same view of our customers, the same view of focus in terms of how we want to serve the market… and it really tremendously enriches our value proposition,” Farrar said . “Our mission has always been to help both sets of customers make their buying process and work flows more efficient and more effective. The addition of RangeMe is going to enable us to do that in a more comprehensive way, a more granular way and really provide a lot more value.”
The two companies originally connected in 2015 as RangeMe was getting ready to expand from Australia into the U.S. market. Then last year, as RangeMe CEO and founder Nicky Jackson resumed talks with Farrar about a potential partnership, she said the idea of an acquisition was raised “unsolicited.”
While brands can connect with buyers online, Jackson noted that at some point there generally still needs to be an offline meeting to allow the product to be tasted, touched and discussed, which ECRM now allows RangeMe to do.
This isn’t ECRM’s first move into tech. The company provides some analytics tools and has a software suite that helps manufacturers and buyers connect both before and after its events. ECRM founder Charlie Bowlus was quick to embrace technological offerings, Farrar said, and this acquisition will allow the brand to continue building upon his legacy and goals.
“RangeMe is really going to complete our transition to a business services solution provider with the technology and capabilities that they bring,” Farrar said.