August 6, 2020

By Lynda Kiernan, Global AgInvesting Media

Stray Dog Capital, a venture capital investor focused on emerging plant-based brands, has led separate funding rounds for two plant-based food startups. These two new additions join Stray Dog’s portfolio of more than 30 investments including Kite Hill, Beyond Meat, Miyoko’s, and Good Catch.

Barvecue®

Stray Dog has led a $2 million round for Barvecue Inc., a North Carolina-based maker of plant-based BBQ alternative meat. Other investors participating alongside Stray Dog included Siddhi Capital, Clear Current Capital, and certain investors from the GlassWall Syndicate.

“The Company started with an idea,” said Lee Cooper, CEO, Barvecue. “Could we produce great tasting plant-based barbecue and build a successful food brand around that product?”

“The idea gained traction, the Barvecue name was born, and the company was established in October 2017,” said Cooper. “We set off on our journey to create the #1 plant-based barbecue brand while building a company that cares about people, animals and the planet.”

Founded in 2017 by Lee Cooper and Zack Werner, Barvecue uses wheat and soy protein powder to manufacture wood-smoked, vegan pulled pork, which it supplies to distributors, food service providers, and retailers to meet the growing demand for plant-based versions of popular foods.

This is key – even though consumers are increasingly turning to plant-based foods for health reasons, it is taste that retains customers – is that Barvecue’s products offer the taste and mouth-feel of their traditional animal-based rivals.

Furthermore, customer retention is critical in such a competitive food category seeing impressive traction and growth. Plant-based foods saw retail sales climb by 31 percent over the past two years in the U.S. market, bringing total value of that market to $5 billion, according to VegWorld Magazine. 

Signaling further growth, one-third of Americans state they are working to reduce the amount of meat in their diet, according to the Plant Based Foods Association, which found that of this group, nearly 30 percent claim to fall under the classification of “flexitarian”.

Products like those produced by Barvecue fill the gap for consumers who aren’t diametrically opposed to eating meat, but are looking for a healthier option that offers the same satiety. 

“Demand in the plant-based food category is surging, and Barvecue products bring a short ingredient list, solid nutritional profile, and a taste that rivals traditional barbecue,” said Johnny Ream, principal, Stray Dog Capital, who will join Barvecue’s Board of Directors as part of the deal. “We’re really excited to partner with the company and help bring Barvecue’s products to thousands of locations in the U.S. and beyond.”

Grounded Foods

Why is it so difficult to crack the code of vegan cheese?  Milk alternatives continue to be widely adopted by consumers who are all too willing to turn their back on cow milk in exchange for any number of other products made from almonds, soy, peas, flax, coconut, cashews, oats, or rice even.

The same stands true for meat alternatives. Consumers have found a new darling in the Beyond Burger or Impossible Burger, as new chicken, sausage, fish, and bacon alternatives continue to hit retail shelves.

But cheese has been a different story. Cheese is more complex – mainly because of casein proteins that make cheese all the things we love – melty, tangy, and gooey – all characteristics that are exceedingly hard to replicate using plants. 

But Grounded Foods out of Los Angeles has raised $1.74 million from Stray Dog as it takes  on the challenge from a novel angle – making vegan cheese using fermented cauliflower and hemp seed. 

Founded in 2019, Grounded Foods produces a line of plant-based cheeses including feta, cream cheese, camembert, and gruyere from non-GMO hemp seeds and cauliflower that are deemed too “ugly” for retail – creating a sustainable supply chain and reducing food waste.

“We are always looking for extraordinary players in the plant-based cheese category, and Grounded Foods’ product and team exceeded our expectations in taste, creativity and strategy,” said Johnny Ream, principal,  Stray Dog Capital.

And as the animal dairy industry continues to face headwinds, and the two largest dairy companies in the U.S. – Borden and Dean Foods –  file for bankruptcy, fermentation may be the answer for vegan cheese companies looking to break into the mainstream. 

Making huge strides in this regard is Perfect Foods, which recently raised an additional $160 million to bring its Series C to $300 million. 

Founded in 2014, Perfect Day has a mission to reimagine the dairy supply chain and to evolve the food system for a more sustainable future by producing animal-free dairy proteins – whey and casein – in a lab that are nutritionally identical to proteins derived from cow’s milk. This is achieved through a simple process – first, “milk’s essential genes” are isolated and then added to a natural dairy flora that uses fermentation to convert plant sugar into milk proteins.

The resulting animal-free, soy-free, lactose-free, and vegan whey and casein are then used to make free-versions of cheeses, yogurts, ice creams and other products that taste and are nutritionally the same as their animal-derived versions.

Notably, it was this ability of Perfect Day’s business model to fundamentally shift industry practices that led to this investment being the first made through CPP Investments’ Thematic Investing group’s new Climate Change Opportunity strategy.

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.