April 3, 2017

301 INC has added an eighth company to its portfolio since its launch as a capital unit by General Mills 18 months ago.

301 INC had committed $3 million in exchange for a minority stake in Boulder, Colorado-based Purely Elizabeth – a leading natural, “superfood” company that produces natural, gluten-free, vegan, and organic, nutrient-dense granola, oatmeal, muesli, and cereal. All products in the company’s lineup are free of artificial flavors, colors, sweeteners, and preservatives.

“Purely Elizabeth is a remarkable brand with a premium breadth of products that have had incredible success in the natural and organic foods channel,” said John Haugen, vice president and general manager of 301 INC. “Purely Elizabeth continues to be a stand-out in the nutrient-dense foods. We look forward to helping the brand unlock new areas of growth.”

Purely Elizabeth was founded by holistic nutrition counselor, Elizabeth Stein, who in 2009 was looking for gluten-free products for her clients, while learning about the niche categories of superfood seeds and ancient grains. Not finding many choices on the retail market, Stein began making her own granola.

“I thought I would start the business as a side project and simply sell to clients, friends, and family,” she explained to General Mills. “Overnight it grew into something consumers were yearning for. Fast forward to today, being in so many mainstream retailers and now having the interest of 301 INC to partner with us. I’m just pinching myself.”

The capital from the round is being earmarked to support the company’s expansion of its distribution network, and for the development of new products including a line of mushroom-based Wellness Bars, which are made from a combination of the company’s Original Ancient Grain Granola and Om MushroomTM Formula. The bars, which are developed to offer a range of health benefits from immune and neurological support, to cholesterol management and improved circulation, are expected to be available in five flavors this August.

“We are thrilled to partner with 301 INC to help foster and grow the vision of the brand, and we look forward to seeing what we can accomplish together,” said Elizabeth Stein, Purely Elizabeth Founder and CEO. “This investment is a great validation that Purely Elizabeth has become a brand to watch in the natural foods industry. Our strategic partnership allows us to utilize the resources and support of General Mills to boost our new product development, furthering our mission to redefine the standards of packaged foods.”

Reflecting on this drive for disruption, Food Navigator reports that late last year, Purely Elizabeth became a pioneer in the category by offering a probiotic granola integrating the BC30 probiotic strain.

“I’ve been interested in the strong connection of gut health and overall health,” Stein told Food Navigator.

“I think Purely Elizabeth started as a niche concept but now it has gone into a more mainstream audience,” said Stein.

The Portfolio

Formally launched in October 2015, 301 INC was a testament by General Mills, the maker of the iconic Cheerios and Lucky Charms among many other popular brands, that there was a shift occurring within the food sector that was creating a scenario in which Big Food needed the rapid-response innovation generated by startups as much as startups need the capital available from Big Food.

Originally 301 INC was developed with three guiding parameters: the first is to ensure that its investment supports an opportunity to compete in a new food category. The second, is that some of its investments will be structured in a way that will allow General Mills to acquire the startup at a future date, and third, is that General Mills will have financial goals set for each investment.

Today, the portfolio consists of eight startups – each with its own mission to lift the nutritional standard of packaged foods, including:

Kite Hill – a California-based producer of artisanal, dairy alternative products.

good culture – a producer of organic, grass fed, high protein, low-sugar cottage cheeses that are free of thickeners, gums, stabilizers, or additives.

Rhythm Superfoods – (the first company that 301 INC engaged with upon its launch) is a producer of a line of superfood snacks including Kale Chips, Broccoli Bites, Beet Chips, and Roasted Kale.

D’s Naturals – an innovative producer of plant-based, non-GMO, non-dairy protein bars that have an extremely low sugar content, and a line of protein-infused, dairy-free, low-sugar nut butters.

Farmhouse Culture – a producer of probiotic-rich foods and beverages including sauerkraut, probiotic drinks, and Kraut Krisps, a chip made with 50 percent sauerkraut.

Tio Gazpacho – a producer of portable, drinkable soups that contain no artificial ingredients.

And Beyond Meat – producer of a plant-based hamburger that looks, cooks, and tastes like ground beef.

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration please contact Ms. Kiernan at lkiernan@globalaginvesting.com.