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Grainful closes $3.3m financing round as Americans embrace savory oats

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By Elaine Watson+

07-Jun-2017
Last updated on 07-Jun-2017 at 16:30 GMT2017-06-07T16:30:11Z

Grainful: Oats, not just for breakfast...
Grainful: Oats, not just for breakfast...

Savory oats pioneer Grainful has already convinced a growing number of consumers on the east and west coasts that steel-cut oats aren’t just for breakfast, and has now persuaded investors to part with a cool $3.3m to take that message to a wider, national, audience.

Speaking to FoodNavigator-USA after closing a $3.3m financing round with lead investments from Advantage Capital, Rand Capital and CircleUp, Grainful  president and co-founder Jan Pajerski said the cash injection would be spent on marketing and distribution as the Ithaca, NY-based brand seeks to build a national footprint.

Now we can really focus on reaching more consumers and partner with marketing agencies that can help us get our brand story out to consumers ’ added Pajerski, who said the brand – created in 2013 – had initially been supported by friends and family, angel investors and Rand Capital.

“Our strongest presence is in the north east and mid-Atlantic and California, but our ambition is to replicate this success across the country. We want to land a national retailer that will take our brand to the next level. We’re doing very well at retailers that cater to the conventional crossover shopper, the shopper that shops at large footprint chains that have a wide selection of natural and organic products.”

Consumers are becoming more familiar with concept of savory oats

While the novelty factor of savory oats has proved a double-edged sword for Grainful, more consumers are beginning to recognize that steel cut oats are more like rice – chewy, grainy and slightly nutty – than rolled oats you get in instant hot cereal packets, resulting in dishes with a texture closer to risotto, said Pajerski.

“You see a lot more talk about using oats in non-traditional ways now and that’s exciting. We’ve also been talking about private label opportunities with some larger CPGs interested in using oats in savory applications, so the concept is definitely becoming more prominent.”

Consumers also instinctively know oats are nutritious and satiating, and while having them for dinner is new, the idea is not so crazy that it sends shoppers running for the hills, he said: “We’re focusing on the benefits and the attributes of the products, which are convenient and made simply with clean ingredients.”

Four years ago, Chef Jeannine Sacco was cooking Jambalaya, discovered she was out of rice, ransacked her cupboard for a substitute, and found a packet of whole grain steel cut oats. The results blew her mind; the entrepreneurial juices started flowing; and the rest, as they say, is history…

Today, ‘steel-cut’ frozen entrees and shelf-stable meal kits from Ithaca, NY-based Grainful  are in almost 2,000 stores from Wegmans to Shoprite, and Sacco and co-founder Jan Pajerski sit at the helm of a company that has created a completely new food category. 

The brand's biggest fans are women aged in their mid 30s to mid-50s with an interest in watching calories, healthy, natural products, clean ingredients, and great taste.

Grainful products feature the 100% whole grain stamp from the Whole Grains Council (steel cut oats are a whole groat cut into 2-3 pieces using a steel disc) and are certified by the Non GMO Project. They are also certified gluten-free.  

Speed scratch…

Retail buyers have also proved very enthusiastic about Grainful, which is now in almost 2,000 stores from Wegmans and ShopRite to Vons and competes with brands such as EVOL Foods, LUVO and Amy’s in the freezer aisles with its frozen entrées  (for baking or microwaving); and with brands such as Uncle Ben’s in the ambient aisles with its meal kits  (for heating in a pan with water).

While most revenues are currently generated from the frozen entrees, he said, the shelf-stable products are creating new opportunities for retailers looking to create tap into the ‘meal kit’ trend in all parts of the store.

“Retailers understand that making the center store more appealing to today’s consumer is important because they are losing business to the perimeter, so there’ a set of emerging brands that are building off the popularity of meal kits to give consumers that want to cook at home more ‘speed scratch’ options to make a meal quickly and conveniently at home.”

Online sales

While fulfilling online orders (Grainful products are also available for purchase on its own website and on Amazon) is clearly expensive in the case of the frozen entrees (shoppers must order a minimum of five entrees), the channel has proved a good way to build brand awareness, he said.

"Obviously frozen shipping is extremely expensive and it's not a focus for us, but we want to give early adopters [that don't live near stores that stock Grainful] a way to purchase our products."

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2 comments

Oats for lunch and dinner

The market is ready for oats used in ways other than breakfast.

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Posted by Stella Metsovas
15 June 2017 | 15h152017-06-15T15:15:08Z

Nothing new here

Was bemused to read about this "discovery". Savoury oats have been a "thing" in India for a long time. Just do a search for Saffola masala oats. Even Quaker has gotten into the spicy oats act in India!

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Posted by MK
11 June 2017 | 14h122017-06-11T14:12:38Z

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