Texas-based butter coffee maker Picnik has raised $7.5 million from private equity firm KarpReilly in a move that will grow both the brand’s CPG and cafe businesses, the company announced this week. KarpReilly will hold a seat on the company’s board of directors.
Speaking with BevNET, founder and CEO Naomi Seifter said KarpReilly’s experience in CPG investments will be beneficial to Picnik as the brand prepares for the fast-paced retail growth it expects to see over the next year. Seifter said the firm has said it would allow the brand to operate without daily oversight, but will be available to help guide strategy when necessary.
“They are full of so much knowledge in the CPG and the restaurant space, and they’ve had incredibly successful investments, so it it is in everyone’s best interest for us to invite them to be a part of our brainstorming and board meetings because they provide such great insight and value I feel it’s really important at this stage in our growth,” Seifter said.
In a press release, KarpReilly co-founder Allan Karp said the firm was impressed by Picnik’s community focused approach to building the brand and its commitment to clean ingredients. In addition to growing the CPG business, the funding will go toward expanding the brand’s on-premise operations, which currently consist of three cafes in Austin, Tex. and a shop inside the Whole Foods Market in Upland, Calif.
The brand was founded in 2013 as a food truck in Austin and launched its first CPG products last year with Cappuccino, Dirty Chai, and Mocha Latte flavors. Earlier this year, the brand expanded its RTD offerings with Extra Bold, Vanilla Latte, and dairy-free Golden Milk Matcha varieties, while also launching a line of butter coffee creamers. All products contain medium chain triglyceride (MCT) oil.
Picnik is distributed nationally with UNFI and KeHE, and by Rainforest Distribution in the Northeast. The brand’s products are now available in 800 stores across the country, including Whole Foods nationwide and Costco’s southwest region, as well as regional accounts like Central Market, Fairway, and MOM’s Organic Market. The brand’s creamers will also be entering Costco’s southeast region and H-E-B stores later this year.
“We’re really in the process right now of securing large, national accounts, but of course we also have boots on the ground that help us get set up with local regional chains as well,” Seifter said. “The CPG side of the company is only 12 months old, so we really see 2019 being a time of rapid explosion in growth for us in the retailer space.”
Through a partnership with private equity investment group Noroc Naturals — founded by initial Picnik investor Cameron Smith — the company has boosted its leadership ranks. General manager Katie Journeay, who joined Noroc in February, had previously led the Chameleon Cold Brew sales team, while VP of retail Mandy Touchet was in national accounts at Chameleon. Director of sales Lee Paquin has also joined from fellow Austin-based beverage brand Temple Turmeric. Internally, Picnik has also hired new director of sales Danielle Merlino, who previously served in that role at gluten and grain free dough maker Capello’s.
As the brand prepares to grow, however, Seifter admits many consumers are still unaware of MCT oil and that consumer education will play an important part of Picnik’s expansion.
“There is an awareness that has to take place, with the greater audience in the consumer space about what is MCT oil, but I think as a trend more and more people use it, more people are becoming familiar with the idea of concentrated coconut oil, and they’re seeing how it helps their life,” Seifter said. “If more people get on board with it, the bigger impact we make.”