Back to the Roots pushes forward to “undo food” with $5 million equity infusion

By Elizabeth Crawford contact

- Last updated on GMT

Source: Back to the Roots
Source: Back to the Roots

Related tags: Breakfast, Finance

An infusion of $5 million of private and public equity funding will help ready-to-grow and ready-to–eat food manufacturer Back to the Roots expand its distribution in public schools and its product portfolio in the coming year as it strives to “undo food,” according to one company co-founder. 

“Last year was crazy”​ with the launch of 15 new products, including its award-winning 100% stoneground breakfast cereals and Organic Breakfast Toppers, expanded distribution in retailers nationwide and an exclusive national partnership with Sodexo to launch in K-12 schools, co-founder Nikhil Arora said.

“With that much momentum, the last thing we wanted was to run out of fuel,”​ he added.

Running out of fuel is no longer a risk, thanks to the $3 million the company raised on the funding website CircleUp in its first round led by Tony Robbins’ and Peter Guber’s Agency of Trillions. Other investors include Blake Mycoskie, founder of TOMS, John Foraker, founder of Annie’s, and Kevin Cleary, CEO of Clif Bar.

In addition, BTTR raised a $2 million convertible note in June 2015 – but prior to that the company, which launched five years ago with a gourmet mushroom growing kit, bootstrapped its finances through competition prize money, Kickstarter and bank loans.

Expanding distribution in schools

Part of the funds will help BTTR “tackle expansion in K-12 schools,”​ where the company currently is launching in some districts single-serve cups of its Stoneground breakfast cereal.

“We are in 500 schools now, but there are 100,000 K-12 schools. Just in New York, there are 5,000 single-serve cups of cereal served a day,”​ so the potential is “massive,”​ Arora said.

Through its partnership with Sodexo, BTTR is in talks with the New York and Los Angeles school districts for distribution and this month shipped to schools in San Jose, Calif.

“Sodexo has been a great champion and by ordering a few truckloads of cereal it opened the door to get in other schools,”​ Arora said.

Sodexo also helped BTTR distribute to schools Ready to Grow kits and curriculum to teach children how food is grown and made. The Garden Toolkits include the company’s Organic Mushroom Mini Farm, Garden-in-a-Can and Water Garden, which together will product up to a half million pounds of food in classrooms in the next five years, according to Sodexo.

The kits and cereals, made with simple ingredients, support BTTR’s mission to “undo food”​ by reconnecting consumers with food production through transparency and innovative products, Arora said.

Expansion at the retail level

The funds also will help the company fill increasing orders at more retailers.

Already available in 14,000 stores nationwide, BTTR found out earlier in January that Kroger will give it more shelf space. Distribution also hit Sprouts’ shelves nationwide earlier this month.

The co-founders also have their eyes on Whole Foods’ category reset in April with a hope for expanded availability.

“Last year was all about launching and forging partnerships, and now our goal is … to be the number one organic cereal in those retailers,”​ Arora said.

New products and staff

As if the aggressive expansion of existing products was not enough, BTTR also plans to launch 10 new products in 2016.

Some of the products are still in development, but will include new cereal flavors as well as expansion into new categories, Arora said.

Finally, the funds will help the company hire more staff at its Oakland, Calif., headquarters. Up until now, Arora said, BTTR has been “a small, scrappy team, but to pull all this off we need to bring in the best folks.”

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