Alpha Foods raises $28m to fuel growth of plant-based food empire
While most plant-based brands debut in the natural channel, Alpha Foods’ first three customers when it launched in 2017 were Walmart, Kroger, and Publix, a reflection of how mainstream these products are now becoming, says co-founder Cole Orobetz, who crossed paths with co-founder Loren Wallis (cofounder of Good Karma Foods) while serving as investment director at Avrio Capital in 2015.
After achieving success with convenient prepared foods such as pot pies, tamales, burritos, nuggets and pizza, the brand has since expanded meal components, offering crumbles, strips, a sausage patty and a ‘beefy’ burger made from non GMO soy and vital wheat gluten, with products in 9,000+ stores nationwide and a range of foodservice outlets.
“It felt like a natural step to move into center plate proteins, plus we were getting asked for these products from our consumers,” said Orobetz.
“But the real star has been our chik’n nuggets, which have been a hit in retail and foodservice in the US and Hong Kong. I’d say Canada and the UK would be next on the list of international markets we’d look at.”
Brand blocking
The latest funds will go toward new launches, new hires, expanding distribution, and boosting marketing and sales support, said Orobetz, who says Alpha Foods is reaching millennials looking for quick easy meal options; moms feeding their families; and vegan consumers looking for new flavors, formats and eating experiences.
All of which adds up to a sizeable consumer base, he said: “The size of the animal protein market is gigantic, and in terms of percentages, we see plant-based meat surpassing plant-based milk, so the market opportunity is massive.”
In general, he said, stores stocking three or more Alpha Foods products “turn faster and better than stores with two [facings], so building our brand block out is very important. When we meet buyers we share this data and push for more SKUs [merchandised] together.
“What we’re also seeing is that in retailers with dedicated plant-based sets where our products are all together, we perform better than when we’re spread across three or four different sections."
We don’t see seafood as an immediate area of focus
Right now, the chik’n nuggets and the Philly and chik’n fajita burritos are the company's top sellers, he said, “We’re finding a lot of traction with our chik’n platform, so that’s going to be an area of focus for us in 2020.
“We don’t see seafood as an immediate area of focus, however. I feel like fish is the last step of the journey towards plant-based; people usually start by reducing red meat, then pork, then chicken.”
Asked about the decision to use soy and wheat as base proteins, he said they made sense from a nutritional, functional, sensory and price perspective, although the company has been experimenting with a variety of protein sources. “We’re staying away from peas for now.”
