Before he founded the plant-based burger company Impossible Foods, Patrick Brown, who spent 25 years as a biochemistry professor at Stanford, also co-founded a Hayward, Ca.-based food company called Kite Hill that has developed numerous nut milk products that it says are healthier and more sustainable than their dairy counterparts.
Investors seem to agree. According to a new SEC filing, the now nine-year-old company is sealing up $ 15 million more in funding (and has at least $ 10 million in fresh capital locked down). The company most recently closed a round if funding last fall, including from backers General Mills, CAVU Venture Partners, and New Crop Capital, and this newest infusion should bring the company’s total funding to around $ 80 million, according to Crunchbase.
It’s easy to understand their enthusiasm for the space more broadly. The vegan cheese market has seen double-digit growth over the past few years, according to Nielsen data, which recently found that sales of plant-based cheese grew 41% through August of of 2018, compared with the flat sales of traditional dairy cheese. Sales of almond, soy, oat and other plant-based milks are soaring, too. According to Nielsen data, sales of plant-based milk beverages rose 9% in the year ending in June 2018, up from 3% the previous year. Meanwhile, traditional cow’s milk sales fell 6% during the same period.
Kite Hill makes almond milk yogurts, greek yogurts, cream cheese, ricotta, pastas, dips, and kids tubes that are sold in Safeway, Whole Foods, and Amazon, among other retail outlets. Along with Brown, it was founded by Monte Casino, a former instructor at Le Cordon Bleu in Boston and Tal Ronnen, a chef and the founder of the vegan Los Angeles restaurant Crossroads Kitchen.
It’s a crowded space to be operating in. Califia Farms, for example, which makes non-dairy milks and yogurts, among other things, was founded the same year in Bakersfield, Ca., and has raised $ 115 million so far, including from Stripes Group. Five-year-old Ripple Foods, in Emeryville, Ca., has similarly outpaced Kite Hill on the fundraising front, raising $ 120 million so far for its non-dairy milk products.
Kite Hill is also competing with big companies that are eager to stay relevant as customer preferences change. Among them, Danone revealed plans to triple the size of its plant-based business — including its non-dairy beverage and yogurt products — by 2025.
Indeed, a strategy for most brands like Kite Hill seems to be to accept funding from the growing number of giant food companies that have established venture arms and hope they’ll help grow their brand, rather than try extinguishing it.
Among the behemoths currently funding their smaller rivals is General Mills (its venture arm is 301 INC), Campbell Soup (Acre Venture Partners), Tyson Foods (Tyson Ventures), and Kelloggs (1894 Capital).