Kite Hill Raises Another $10M to Drive Growth in Plant-Based Foods Category

September 23, 2019

By Lynda Kiernan

Plant-based food brand Kite Hill has raised another $10 million from a single investor as part of a $15 million equity offering. The remaining $5 million remains to be sold, according to a recent SEC filing

Based in California, and founded in 2013 by a team that includes Impossible Foods founder Patrick O. Brown, Kite Hill’s business began with a foundation built upon its proprietary method of almond milk production. The company uses non-GMO almonds sourced from California’s San Joaquin Valley as the base ingredient to produce their plant-based cheese, Greek and European-style yogurts, cream cheese, soft cheeses, pastas, dips, and kid-focused tube products.

This round follows a significant $40 million round raised by the company in October of last year that was led by General Mills’ 301 INC and CAVU Ventures. Now, with this capital, which brings the company’s total funding to $75.5 million since 2014, Kite Hill is expanding its horizons by exploring new plant-based food opportunities. 

With ever-greater  consumer demand, the plant-based food category is becoming increasingly crowded, not just with other startups such as Ripple Foods, which raised a $65 million Series C last year, bringing its total funding to $120 million, Califia Farms, which raised $50 million last year, or newly launched New Culture, which just raised $3.5 million in Seed funding, but with some of the world’s top CPG companies like Danone, which announced its intentions to triple the scope of its plant-based food business over the next five years. 

This intensity of competition is creating a market in which Kite Hill must continue to evolve, and Kite Hill CEO Rob Leibowitz told Food Navigator that the capital raised from this offering will be “spent on innovation, infrastructure, people, and marketing.” Reflecting Kite Hill’s intention to evolve as the market grows, the brand has also recently redesigned its packaging, logo, and tagline. 

Just as Danone foresees its plant-based food business tripling in size, Kite Hill, which currently sells its products through Whole Foods, Target, Safeway, Kroger, and Meijer, has strategic expectations that between 2017 and 2021, its business will grow fivefold.

Given market conditions, expectations such as these are not overarching. Since April 2017, plant-based food sales have increased by 31 percent, with plant-based milks driving the category. And in just the 12 months to July 2019, retail sales of plant-based foods in the U.S. grew by 11 percent, driving the market value to $4.5 billion, according to recently released data from the Plant Based Food Association (PBFA) and The Good Food Institute. 

“Plant-based foods are a growth engine, significantly outpacing overall grocery sales,” said Julie Emmett, PBFA senior director of Retail Partnerships. “We are now at the tipping point with the rapid expansion of plant-based foods across the entire store, so it is critical for retailers to continue to respond to this demand by offering more variety and maximizing shelf space to further grow total store sales.”

 As more and more consumers reach for dairy alternative products stemming from lactose intolerance, concern for animal welfare, concerns over the usage of antibiotics and possible hormones in production, or veganism, it makes sense for Kite Hill to not pigeon-hole itself into a specific niche within the category. 

“Everything we do here is about making great tasting foods, and where it makes sense, we’ll definitely be exploring plant bases that go well beyond almond,” Leibowitz told Food Navigator. “We’ve got a three-year pipeline that crosses multiple plant bases and multiple product platforms.”

 

– 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.

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