Good Karma Foods buys back ownership from Dean Foods, as fallout from the dairy giant’s bankruptcy continues
Investment from early-stage food fund Valor Siren Ventures and a re-up from existing investor 2x Consumer Products Growth Partners allowed Good Karma Foods to buyout interest from Dean Foods, which became a majority shareholder after multiple investments in the company beginning in the 2017.
The original partnership was slated as a way for Good Karma to expand its footprint in conventional retail while simultaneously offering Dean Foods a lower-stakes entrance into the emerging plant-based beverage category with an established brand that would need fewer resources to succeed than a new brand.
Dean’s investment in Good Karma was part of a larger buying spree that included Friendly’s Ice Cream in 2016 and in 2017 the organic juice brand Uncle Matt’s, which also recently repurchased its business following Dean’s bankruptcy in late 2019.
Despite the fallout from private label competition and shifting consumer preferences that lead to Dean’s bankruptcy, Good Karam will continue to run out of Boulder under its current leadership team – thanks not only to its new investment partner, but also “our amazing team” and “the continued support of our supply chain partners, distributors and retail customers,” Doug Radi, CEO of Good Karma, told FoodNavigator-USA in a written comment.
In a press release, he added that buying back Good Karma will allow the company to refocus on its ‘Inspiring Goodness’ mission by offering plant-based alternatives that are “nutritious, surprisingly delicious and creamy, and free of allergens.”
The brand’s positioning as an allergy-friendly option gives it a much-needed point of differentiation in the increasingly crowded plant-based food segment, which grew 11.4% to $5b in 2019 from the previous year.
The partnership with VSV also will allow Good Karma to “accelerate distribution gains in new and existing channels; innovate in a variety of plant-based categories and expand brand-building and consumer awareness programs,” the company explained.
Lauding the company’s “demonstrated track record of delivering innovation in categories in need of inspiring plant-based options,” including recent extensions in dairy-free sour cream and French and onion dips, VSV fund manager and partner at Valor Equity Partners Jonathan Shulkin said that he is delighted to welcome Good Karma into his portfolio.
“Good Karma embodies the exact type of opportunity we’re interested in as we look to bring our mission to life,” he added in the statement.
Radi added in his comment to FoodNavigator-USA that he too “could not be more excited about this new investment and partnership.”
