Slate Milk, the Boston-based maker of lactose-free chocolate milks marketed towards adults, has raised $1.7 million in a funding round led by Riverpark Ventures.
The round brings the company’s total financing to $2.5 million and also features a number of angel investors including Halo Top executives Doug Bouton and Justin Hall, OneRepublic singer Ryan Tedder (also an investor in CBD beverage Mad Tasty), Drizly co-founder Nick Rellas, former Drizly executive Taylor Burton and MVMT co-founder Jake Kassan.
The round additionally saw investment from serial entrepreneur Doug Imbruce, Story Ventures partners Jake Yormak and Brian Yormak and social media influencers including Liz Eswein. In recent months, Slate has also brought on former Adidas executive Lawrence Norman and former Whole Foods regional president Laura Derba as advisors to the business.
Slate’s ultrafiltered chocolate milks include Classic, Dark Chocolate and caffeinated Espresso Chocolate varieties available in 11 oz. cans. The drinks contain 17 grams of protein, 9 grams of sugar and 120-130 calories per serving.
According to Slate co-founder Manny Lubin, the financing will go towards scaling the brand as it prepares a rapid expansion along the East Coast. At the end of Q3 2020, Lubin said the company was in just 300 retail stores and had just one full time employee, in addition to himself and co-founder Josh Belinsky. Now, the company anticipates it will be in over 3,000 doors and have 20 full time employees by the end of next month.
“There’s no perfect formula,” Lubin said. “There’s no ‘How to Start a Chocolate Milk Company’ for Dummies. But I think, to make any startup successful, we want to make sure that we’re marketing the products properly and we’re getting the word out about what we’re doing. And we have people in the field that are working directly with our retail partners to make sure that we’re in a position to win.”
In addition to aiding an increase in production, the funding will also support a marketing campaign focused on digital and influencer campaigns. Slate has also grown its sales team by hiring numerous regional sales managers as well as director level positions including former Yasso controller Todd Morse as director of finance and former Popcornopolis VP of sales Mike Arnold as director of retail sales. Lubin said Slate expects to announce additional hires in the coming weeks.
“We look to hire entrepreneurs,” Lubin said. “Whether they’ve started a business in the past or they haven’t, it doesn’t matter. It’s about people that have that entrepreneurial mindset because what they’re really doing is running their own little business underneath the Slate name and doing what they can working with the stores to drive trial and continue to just to build a business in their area.”
Lubin noted that many of the angel investors Slate has brought on in this current round have experience building companies in the food and beverage space and will be able to guide the brand as it scales. For example, Bouton and Hall have advised on the product formulation and flavoring while Kassan has given the brand guidance on building its ecommerce platform.
Launched towards the end of 2019, the brand faced stagnation in the early days of the COVID-19 pandemic, Lubin said, as retailers imposed a moratorium on category resets. However, throughout the spring and summer the brand reported strong ecommerce sales and, as retailers began taking on new products again in the past few months, its footprint has grown tenfold.
Slate is now available along the East Coast in retailers including Whole Foods, Harris Teeter, Giant Food, Giant Martin’s, Wakefern, Hannaford, Bristol Farms and Central Market. The brand is also preparing to rollout into Publix and Market Basket stores in the coming weeks, Lubin said. Though Slate is primarily in grocery and natural channel retailers at the moment, it is also beginning to gain placement in convenience stores and will also target gyms and fitness centers where it will be positioned as a protein drink.
Looking ahead, Lubin said Slate is also preparing to launch additional innovations later this year, in addition to continuing its distribution expansion. However, with thousands of new accounts to manage, the key goal will be ensuring each one performs.
“I think now what we really want to do is make sure we’re doing everything we can to make every account a success,” he said. “And I think that’s what a lot of 2021 is going to be for us.”