Alpha Foods raises $7m to fuel frozen plant-based foods empire: ‘We started at Walmart…’
“It feels like we've reached a tipping point, that this is the perfect moment in time for our brand, when Millennials in particular are looking for foods that are healthier, kinder to animals and kinder to the environment. They also love grab and go products," he told FoodNavigator-USA.
"It's also the case that the 'vegan' category has become 'plant-based,' which is so much more inviting.
“With plant-based, you could say that the defined universe is suddenly so much bigger,” added Wallis, who founded Good Karma Foods in the late 1990s and teamed up with Canadian wunderkind Cole Orobetz (who founded a recycled plastic lumber fabrication and sales company aged 18, and crossed paths with Wallis while serving as investment director at Avrio Capital) in 2015 to form Alpha Foods.
“So we decided to start top down versus bottom up. Instead of starting with Whole Foods and Wegmans we kind of turned the pyramid upside down and focused on Walmart, Kroger and Publix.
“We saw the Walmart buyer, showed her our first product [all-day burritos loaded with plant-based protein, veggies and vegan cheese], she loved it, and she wanted it in 400 stores, and within 3-4 months Kroger said it wanted us in about 1,200 stores and Publix said yes to all 1,000 stores.
“So overnight we had three huge retailers,” added Wallis, who noted that many retailers are expanding freezer space devoted to plant-based entrees.
“But we’d spent almost two years gearing up for large scale production, so we were ready. Right at the beginning, Cole and I sat down and imagined what the company should be: not a Mom and Pop operation, but something that could go to $100, $200 million, to no limits."
Move from vegan to plant-based, and the defined universe is suddenly a lot bigger
Plant-based pot pies, chick’n nuggets and hand-held tamales came next, with pizza to follow, filling white space in a category that is still dominated by crumbles, sausages, roasts and burgers, although there has been a flurry of innovation in the plant-based prepared meals segment in the past couple of years, coupled with the well-publicized innovations from Beyond Meat and Impossible Foods, acknowledged Wallis.
Chilled products are also in the pipeline, he said. “We have ideas and concepts that could move us into refrigerated concepts at the back end of this year and moving into early 2020.”
While all of Alpha Foods’ wares are vegan, the red and black packaging, call-outs, product formats and marketing are deliberately mainstream and designed to appeal to meat lovers and vegans/vegetarians alike, said Wallis, who says the products are currently in around 6,000-7,000 stores, a figure he expects to “double or even triple” in the next calendar year.
Dan Y Altschuler Malek, senior venture partner at New Crop Capital, added: “In addition to having a great product and great timing, Alpha Foods has the ability to grow and scale at a much more rapid pace than many other players in this segment.”
Glendale-CA-based Alpha Foods' meat analogs are made from (non GMO) soy and wheat, which are pretty standard source materials in the space, but also utilize proprietary recipes and processing techniques, claimed CEO Loren Wallis.
"Soy and wheat do a phenomenal job, although we're testing the latest pea proteins, mycoproteins and legume proteins as well. I know pea proteins have worked well for some companies [eg. Beyond Meat], but we've found the ones we've used tend to break down more, and they don't create the structure that we want. They also have a pungent, prominent, flavor profile. The meatless meats in our product are made by co-packers, but they use Alpha-owned IP and we own the formulas."
