November 7, 2017

Powerful, a U.S.-based producer of a line of high-protein foods and beverages, announced it has raised $4 million through a Series B led by private equity firm, River Hollow Partners, and asset-based lending (ABL) financing through a partnership with New York-based Gerber Finance.

Launched four years ago in Miami, Florida, Powerful is credited with creating the “brogurt” category, when it released its first Greek yogurt targeted toward men, and employed the first black packaging in the dairy aisle. Since then, the company has grown into a multi-category lifestyle brand that is focused on both men and women.

“When we launched with Powerful Yogurt in 2013, we focused on men, but almost immediately we could see that our products appealed to both men and women, and women now account for about 60 percent of our customer base,” Sara Goldthwait, chief commercial officer at Powerful, told FoodNavigator-USA.  “We could also see that protein was moving beyond sports and fitness to the mainstream, so we quickly moved to be an active lifestyle brand, extending into high protein yogurt drinks in 2015 and high protein oatmeal in 2016.”

Powerful’s products now include Powerful Yogurt, Powerful Drinks, and Powerful Oatmeal – all made with natural ingredient and offering high levels of protein. The company’s products are currently being sold at Walmart, Target, and grocery store chains Stop n’ Shop, and ShopRite. Where Powerful deviates from the norm, however, is on its own website, where the company offers a unique subscription model that allows customers to purchase product bundles that can be shipped on a recurring schedule at a discounted price.

A Break from Breakfast Cereal

For about 10 years breakfast cereals have been losing market share as consumers raise concerns about their nutritional content and lack of convenience, opting instead for higher protein choices like yogurt or breakfast bars. And although 90 percent of American households still buy cereal and sales topped $8.75 billion in 2015, this number was down from sales of $9.6 billion in 2012 according to data from Nielsen.

Meanwhile, consumer demand for value-added, or functional foods and beverages that offer higher protein content also continues to grow, according to the Natural Marketing Institute (NMI) that continues to monitor the protein food and beverage market. NMI reports that in 2014, more than half of consumers purposely sought out high protein foods compared to 39 percent of consumers in 2006, while nearly three-quarters of consumers reported that they consumed high-protein foods or beverages within the last year.

Furthermore, between 2011 and 2016, the U.S. energy and sports drink retail market saw an impressive annual growth rate of 7 percent, capping out 2016 with sales of $25 billion, according to the report Energy & Sports Drinks: U.S. Market Trends & Opportunities issued by Packaged Facts earlier this year.

This momentum is expected to continue as consumers increasingly opt to avoid sugary carbonated drinks in favor of healthier beverages that offer innovative functional benefits. Sports drinks also are benefitting from above average population growth seen in its target age group of  25-34 year olds, which grew at a rate of 1.4 percent between 2012 and 2016, compared to the general U.S. population which saw a growth rate of 0.7 percent over the same time period.

These market dynamics are resulting in innovation within the space to try to capture consumers’ imagination and interest from investors looking to be early backers of new cutting-edge products that hit a nerve with health conscious buyers.

Power of Attraction

The ability to hit a nerve with today’s consumers while also sparking disruption in an established food category was something that attracted River Hollow to Powerful.

“We partnered with Powerful because it is uniquely poised for success,” says Charlie Baynes-Reid of River Hollow Partners. “Not only have they truly been an industry disruptor with innovative products, but they have a seasoned and passionate management team with an extremely clear brand mission and vision. You typically see new companies come in and try to create their own niche specialty, but what Powerful has done really makes a significant impact through disruption in an already successful category, and that is something l saw as very compelling as a private equity partner.”

The company states that it plans to use the funds to support the expansion of its product line, and to boost manufacturing, sales, and marketing initiatives as the company strives to gain a leadership position in the high protein foods category.

“We are thrilled to be working with River Hollow and Gerber Finance because they are as passionate as we are and thus ideal strategic partners and investors in our business,” said Carlos Ramirez, founder and CEO of Powerful.  “The capital provided gives us the additional resources we will use to reach our ambitious goals as we continue to expand the product offerings and increase our footprint in the U.S. and beyond.”

The first new launch for the company is scheduled for January 2018 when it releases its new refrigerated Greek yogurt-based high protein smoothie line, designed to include a resealable cap offering convenience to consumers looking for nutritious snacks while on-the-go, according to FoodNavigator-USA.

Beyond January 2018, Powerful is looking to expand its presence into non-dairy categories and is currently in the development stage with a variety of plant-based proteins.

“We’re protein agnostic and we’ve been playing with various proteins in the test kitchen,” Goldthwait told FoodNvigator.

-Lynda Kiernan