NOSHscape: The Latest Food Brand News

SmartSweets Raises $3M to Slay Sugar

With the announcement of a $3 million round of funding and a launch in Whole Foods Market nationwide, the Canadian brand SmartSweets is trying to provide a cross-border answer.

Founder Tara Bosch started the company in Vancouver In 2015 after she couldn’t find a low-sugar gummy that was free of sugar alcohols and artificial sweeteners. Armed with $15,000 she had saved from odd jobs, such as working at McDonalds, Bosch dropped out of college, Googled ‘how to make candy’ and bought molds on Amazon.

“When I started SmartSweets I was really honest with myself that I understood that I really knew nothing about what I was doing, but I had the conviction in my heart that I knew I was going to figure it out,” Bosch told NOSH. “[My motivation] was because growing up I developed a really unhealthy relationship with food and it affected my self esteem and my body image.”

Bosch’s convictions are being borne out at retail. After getting into 2,000 stores in Canada by what she calls ‘force of will,” – and being selected as a fellow in both Ryan Holmes’ The Next Big Thing (TNBT) program as well as by the Thiel Foundation – she attracted the attention of Jason Krolikowski, the global candy buyer for Whole Foods.

“It was very clear that [Whole Foods] wanted their consumers to invest in their health…They really got the ‘why’ behind what we were doing.” Bosch said. “For them, they want their consumer to have the ability to shop the candy aisle without worrying about [ingredients].”

In March, SmartSweets rolled out in Whole Foods nationwide and the brand completed a redesign to stand out the shelves of the natural product retailer. That growth in distribution required capital, however. So in February the SmartSweets closed a $3 million round of funding from a group of angel investors including Scott Elaine Case, founder of Consumer Private Equity Investors, Terry Tierney, CEO of Daiya Foods and Eric Patel, former board chair of Daiya Foods.

Cleveland Ave. Backs Farmwise

Don Thompson seems to still have an affinity for burgers and fries.

Farmwise LLC, the Boston-based makers of Veggie Fries, Veggie Tots and Veggie Rings, announced last month that it closed a $4.5 million financing round led by Cleveland Avenue LLC, the venture capital firm founded by Thompson, the former president and CEO of McDonald’s Corporation.

Other companies in the round include repeat investor Home Market Foods, Inc, the maker of frozen meat brands Cooked Perfect and Fire Grilled. Additional terms of this most recent investment were not disclosed.

“We really genuinely like [the Cleveland Avenue] team,” Farmwise co-founder Dave Peters told NOSH. “Their chief portfolio officer Keith Kravcik completely understood our vision and saw the tremendous business potential from the very first day we met. And our first meeting with Don Thompson was just electric, with great questions and incredible insights. The fact that they also have so much restaurant and foodservice expertise is really exciting for us too, since we see tremendous potential in those channels.”

Farmwise founders Dave and Cristina Peters started the company in 2013 with the goal of developing healthier alternatives to consumers’ favorite — but traditionally unhealthy — foods. Taking on the french fry to start, Farmwise’s products use a blend of vegetables and beans, and a patent-pending process to make this healthier alternative. Since then, Farmwise’s portfolio has grown to include three varieties of Veggie Tots (broccoli, cauliflower and beets) and two varieties of Veggie Rings (cauliflower and butternut squash).

The brand is sold in more than 8,000 retailers such as Kroger, Wegmans, Stop & Shop, Giant Foods, HEB, Walmart, Safeway, Whole Foods Market and Sprouts, as well as Metro Supermarkets in Canada.

Cleveland Avenue’s previous investments include plant-based burger alternative brand Beyond Meat, as well as Drink Maple, Bhakti, Farmer’s Fridge and SomruS.

How Real Good Foods Is Seeing ‘Real Good’ Success’

In late 2016, pizza shop owner Josh Schreider was searching for the answer to his stomach woes: a pizza that wouldn’t make him feel like he’d eaten, well, a pizza. After testing a variety of fibers that could replace wheat in the crust, Schreider stumbled upon the concept of using antibiotic-free chicken and cheese as a replacement for flour, corn or rice, and soon after launched Real Good Foods (RGF). The low carb and low calorie chicken crust pizzas were a hit, first at his restaurants and then online. Now, 18 months later, the company has launched a line of chicken-tortilla enchiladas and is seeing rapid growth in retail.

The brand expects to be in roughly 8,000 grocery doors by summer 2018. It currently is sold in retailers including Kroger, Publix, Walmart and the Fresh Market. Additionally, the line of pizzas is sold in 2,000 specialty nutrition retailers such as Vitamin Shoppe and on QVC. This growth has been achieved using minimal slotting fees and avoiding third part distributors for the bulk of its distribution.

Along this journey, Schrieder brought on CPG vet Bryan Freeman as CEO. Schreider now serves as president and oversees product development. The two, along with many of RGF’s 20 employees, previously worked together at Better Bakery where Freeman was also CEO. Through his venture fund, Slingshot Consumer Partners, Freeman also invested in the company.

Freeman believes that much of RGF’s growth has been thanks to its robust online community. The brand’s digital fans have helped develop every new product, serve as a testing ground for ecommerce and help create buzz.

“We’re of the strong belief that everything starts and ends and then begins again with our community,” Freeman told NOSH. “By going direct to consumer and making that a really meaningful part of the business, number one, it helps you understand what your community wants and loves and what they want next.”

As a frozen product with higher shipping costs, e-commerce is still not the largest part of RGF’s business. However, Freeman said it helps them get on shelves at certain retailers where young, tech-savvy category managers and buyers are watching what products have a cult following on social media.

Because of this, RGF maintains an affiliate program and a wholesale distribution program where smaller stores and gyms can purchase a branded, standalone freezer and then get larger orders dropped shipped directly to them for resale.

RGF’s online popularity has also created a demand for the product that “drives consumers to the point of distribution,” Freeman added.

“Retailers are looking for reasons to bring consumers to their stores and especially center store,” Freeman said. “I believe retail is becoming a point in distribution. It’s not a place to advertise your product… You have to create demand outside of the store. That’s what drives incremental revenue for the retailer, so the retailer wins, and the company succeeds.”

Going forward, the company plans to continue to expand in center store. In 2018 RGF will launch two new product lines that “may or may not” be in frozen. What is off the table, however, is using “exotic” protein isolates or sugar alcohols to hit certain macronutrient claims, Freedman said.

“What our community wants is delicious real food that’s low in carbohydrates and high in protein.” he said. “So from that, that gives us permission to go into adjacent categories, such as snacks and appetizers, and it no means restricts us to a source of protein.”

Plant Protein In Bloom

Clean meat startup Future Meat Technologies (FMT) announced in May that it closed a $2.2 round of funding, co-lead by Tyson Ventures, the investment arm of CPG giant Tyson Foods. FMT is a biotechnology company that aims to design a more cost-efficient manufacturing processes for lab grown – or “clean” – meat. Tyson Ventures has also previously invested in plant-based meat company Beyond Meat, as well as cultured meat producer Memphis Meats.

The investors in the round are indicative of the global interest in the new category. Also taking part in the round was the Neto Group, an Israeli food conglomerate, S2G Ventures, a Chicago-based venture capital fund and BitsXBites, a Chinese food technology venture capital fund.

Though interest in this sector is high, one of the largest hurdles for clean meat companies to clear is its high production costs, which is currently preventing the brands’ final products from being competitive on shelf with conventionally raised meat.

“It is difficult to imagine cultured meat becoming a reality with a current production price of about $10,000 per kilogram,” Yaakov Nahmias, FMT’s founder and Chief Scientist said via a press release. “We redesigned the manufacturing process until we brought it down to $800 per kilogram today, with a clear roadmap to $5-10 per kg by 2020.”

The investment comes at a time when alternative protein sources — both plant based or lab grown — are seeing increased interest and capital investment. However, many questions remain. What will happen when this technology comes to market? Will mass market consumers embrace the products, and how will they be regulated?

In April, members of the Missouri House of Representatives widely approved a bill that prohibits lab-grown meat and meat substitutes to be labeled as “meat.” The bill now goes to the Missouri Senate and if approved, would represent the first state to take on labeling definitions for the new category. The bill was backed by the state’s pork producers, the Missouri Farm Bureau and the Missouri Cattlemen’s Association.

The United States Cattlemen’s Association recently also filed a petition with the US Department of Agriculture, Food Safety and Inspection Services (FSIS) to “exclude products not derived directly from animals raised and slaughtered from the definition of ‘beef’ and ‘meat.’” That petition is currently open for comments.

CrossFit to Grow Presence in Food

Exercise brand CrossFit is bringing its “RX” standards outside of the gym and into the grocery store via a partnership with meat company Strauss Food.

Customers will be able to get a selection of “CrossFit approved,” grass fed beef and free range chicken – first via a subscription box, and soon after, in more than 3,000 grocery retailers across the U.S. Soon after, the two will develop a line of jerky as a partnership under the CrossFit brand itself.

It’s the first time the high-intensity workout plan, which often influences its participants’ nutrition habits, has developed its own food and beverage products.

CrossFit is hoping its new licensing partnership will allow consumers who identify with the high-intensity fitness community to more easily find products that fuel their workouts. It’s a strategy that another diet and lifestyle brand, Whole 30, has rolled out in partnership with companies including Nutpods and The New Primal.

The brand’s official entrance into food should come as no surprise. The sport’s athletes have long been tapped to act as brand ambassadors for natural food brands. Brands such as RX Bar, Fuel for Fire and Kill Cliff have all targeted the CrossFit consumer and seen adoption of their products spread from the gym to the grocery store. That’s because when a company wins over that consumer, they win over a niche audience with a massive following: There are more than 13,000 CrossFit affiliate “boxes” in over 120 countries, and in 2018 alone, about 416,000 people registered to compete in CrossFit’s annual fitness competition, the CrossFit Games.

“This is just the exact audience that will understand the importance of what we are accomplishing [with Strauss],” Randy Strauss, the co-president and CEO of Strauss Meats, told NOSH.

After the meat partnership has rolled out, Strauss will also help CrossFit establish a co-branded line of jerky to be sold inside CrossFit affiliated gyms and grocery retailers. The jerky brand is still in the innovation stage, but will have no added sugar and be held to the same quality standards as the rest of Strauss’s meat products.

In the future, CrossFit will consider partnering with other like-minded food and beverage brands to launch more lines of CrossFit branded snacks and food products beyond jerky, though there is nothing in the works as of yet, according to Gary Krakower, VP of Licensing at IMG, a global sports and talent management company that works with CrossFit.

Krakower noted that CrossFit is particularly interested in products within the categories its athletes turn to, such as nuts, seeds and bars. But the company is most concerned with the quality of products rather then scaling quickly.

“We have zero interest in products that don’t align with our exercise methodology or nutrition prescription,” Cain said. “CrossFit is leading a metabolic revolution that is changing consumer habits. Mainline brands are aware of this and everywhere we see them adapting.”

Jonny Moseley Goes From Slopes to Snacks with Iota

Jonny Moseley has quite a resume. The U.S. Ski and Snowboard Hall of Famer was a Medalist at the Olympics, World Cup and X-Games, has hosted Saturday Night Live and MTV’s The Challenge, and was one of People Magazine’s 50 most eligible bachelors in 2002.

Now Moseley is looking to add CPG entrepreneur to the list, joining with his wife, Malia Moseley (it was 2002, after all), and longtime family friend Johanna Creighton to launch Iota – a line of plant-based, seed-derived snacks. The brand’s first product, a spouted pouch of roasted, flavored sunflower seeds, was quickly picked up as an offering at Peet’s Coffee and made its national debut at this year’s Natural Products Expo West.

The Moseleys had been looking for a business venture, originally thinking of suncare, that would draw from Jonny Moseley’s years in the ski industry. However, at a dinner with Creighton, who had just left snack brand KRAVE, the trio sprouted the idea that became Iota.

Creighton and Malia Moseley chose seeds as the basis for the snack, touting numerous benefits, including a smaller environmental footprint than nuts, relatively short period (a few months) to reach full maturity, less allergen issues then nut-based products and far less water to grow, a key factor in the Mosleys’ home state of California.

A star ingredient in hand, the trio then tapped family friend Alyssa Warnock, the designer behind energy drink Hiball, to help them with design. The packaging contains three mountains for the three founders, several seed-esque petals on a flower, and a prominently featured bird, a joking nod to the fact most Americans see sunflower seeds as bird food. The 2.5 oz. package is a wide-mouthed, spouted, resealable pouch, for better eating on the go, as well as a line of .75 oz. “shots” for one-time use.

“I have two children who were born in the age of spouted pouch baby food, and it’s such a freeing format because you really can be on the go and it’s clean and efficient and reliable,” Malia Moseley said. “You [also] can eat according to how hungry you are, not according to the size of the bag you just opened.”

True Fresh and NutriFresh Launch Bi-Coastal Deal

True Fresh HPP and NutriFresh Services, two of the country’s largest high pressure processing (HPP) operations, announced a joint partnership in April that will make the combined entity the largest HPP tolling enterprise in North America, according to a press release.

The two facilities, based in Buena Park, Calif.-based and Edison, N.J., which contain a total of seven Hiperbaric HPP machines, will have a combined annual output of up to 200 million lbs. The two companies will continue to operate independently, but will offer suite of services designed to give customers a comprehensive solution on the East and West Coasts, including logistical support, dropshipping and pick and pack fulfillment for e-commerce.

“What this did was align NutriFresh and True Fresh so that customers can get a one-stop blanket service,” said TrueFresh CEO Alan Fresh. “It’s a handoff that’s seamless and quick and enables those brands to take business or go after business that may have felt like it was difficult to accomplish.”

True said the bi-coastal partnership did not involve any financial transaction and that the two companies were motivated by the opportunity to increase their national footprint.

“We try to make it feel like a merger without having an economic exchange,” said True. “It’s a fully transparent sharing of leads and resources, so it’s a win-win and a positive for all the customers who come through our door.”