The Pre-Series A funding was oversubscribed three times, said 479 Degrees founder Jean Arnold, although she did not disclose the exact amount raised, telling FoodNavigator-USA it was “somewhere between five and 10 million”.
The cash will be spent on “hiring top-notch people, gaining distribution, and product development”, said Arnold, who started 479 Degrees in the basement of her parents’ home in 2008 and has since built a national presence in retailers including Sprouts, Safeway and Target, along with coffee chains such as Peet’s Coffee.
“We have national distribution through the key retailers, but we need to go deeper with them, as well as pick up regional chains in some key markets," added Arnold, who is planning a packaging refresh in Q1, 2016, and plans to take the 479 Degrees brand beyond popcorn late next year.
RTE popcorn continues to outpace all the other categories in salty snacks
Named after the optimal temperature for popping corn (479°F) 479 Degrees has been notching up double-digit growth for the past three years and is one of the fastest growing brands in a category that has reinvented itself as "Millennial friendly, cool and healthy” according to Rabobank senior analyst Nick Fereday, who says US sales of ready-to-eat popcorn topped $750m in 2014, up 60% vs 2012.
While such meteoric growth rates cannot continue indefinitely, the pace of growth – while slowing – is still way ahead of the overall snacks market, said Arnold.
“Popcorn continues to outpace all the other categories in salty snacks, and is still generating anything from 25-35% year on year growth depending on the channel, so that’s huge. I’m sure the growth will taper off, but will that be in the next couple of years, the next five years, or the next 20? I don’t know.”
Asked about the competition, she said, “The category has become more crowded over the past year but it’s shaking itself out, so you need to be very clear about the differentiation you offer. If you’re a diet brand like SkinnyPop you’ve got to really own it, whereas we are offering a premium high quality gourmet experience that’s also for everyday snacking, so that’s the white space that we own.”
People like the simplicity of popcorn, it’s minimally processed and naturally low in calories
As to why popcorn – which has been around forever – is suddenly hot property, she said: “People like the simplicity of it, it’s minimally processed and naturally low in calories, a healthier, better for you snack.
“Puffs were often touted as healthier than potato chips, but if you think about it, they are reconstituted cornmeal, whereas popcorn is probably the least-processed snack you can buy, and then we’re adding some really interesting sophisticated flavors.”
We are the only company with national distribution that’s air-popping popcorn
But is there really a meaningful difference between the products on the market, or is branding the key differentiator?
According to Arnold: “We are low calorie, but we are also the best tasting; we consistently perform the best on blind taste tests.
“We’re also the only company with national distribution that’s air-popping popcorn instead of popping it in oil [a claim disputed by Lesser Evil snacks, which makes the Buddha Bowl and Chia Pop RTE popcorn brands, and only airpops, says CFO and COO Andrew Strife].”
Our brand is bigger than just popcorn
However, the brand will be going through a big refresh in Q1, 2016, in order to “solidify our premium position, and capture the flavor and taste experience in a way that’s much more impactful, but also make it fun”, said Arnold, who is now looking to take the 479 Degrees brand beyond popcorn.
“When we started looking at the packaging refresh, we realized that our brand is bigger than just popcorn," she added.
"It’s about vibrant living, and mindful snacking, so we will be introducing new products [that go outside the RTE popcorn category] that we’ll probably start announcing at the end of 2016.”