Japanese BBQ sauce brand’s fast growth attracts $13m buy in from prominent investment firm

08-Sep-2022 - Last updated on 08-Sep-2022 at 16:58 GMT

Image credit: Bachan's

Related tags Sauces Japanese BBQ M&A Investment

A Japanese-style sauce brand with a history of personal connection with customers has parlayed that authenticity into a $13m cash infusion in a funding round led by a prominent consumer brands investment firm.

Bachan’s, a manufacturer of several variations of Japanese barbecue sauce, announced the fundraise this morning. The round was led by investment firm Sonoma Brands Capital.

The company was founded by its CEO, Justin Gill, who named the firm after his grandmother, whose parents had moved to California from Japan (‘Bachan’ is an English rendering of a Japanese term of endearment for a grandmother).

Connection with customers

Gill said the sauce arose out of a community connection with customers, and that feeling carries over into the modern, industrial rendition of the product.

“Our sauce is truly a family heirloom, a tangible, flavorful inheritance of my Japanese ancestry. The recipe was brought here by my great grandparents when they immigrated from Japan. We used to make it together every year as a family and give it out to clients of our family landscape business. That is why it is personally special to me,” Gill told FoodNavigator-USA.

To maintain both that feeling and those flavors, Gill said no expense was spared to source the best ingredients. The sauces are based on mirin (rice wine) sourced from Japan and soy sauce brewed in a traditional manner. And the sauces are not pasteurized, which is a step that can quench flavors in the bottle.

“We also use real ginger, garlic, and green onion. No powdered ingredients,” he said.

Bold flavors for evolving palates

Gill said the evolving American palate has brought a certain freedom to the manufacture of products like his. Gone are the days when a formulator would have to scratch his or her head to figure out how closely their products could match their ‘true’ flavor profiles without scaring off timorous mainstream American consumers. Americans might not yet quite be citizens of the world, but their taste buds are increasingly leaning in that direction.

“The American consumer is generally much more familiar with authentic Asian flavors — whether it be from personal travels; experiences at local, authentic restaurants; exposure through friends and family; or a willingness to be more adventurous in the market as a result of the many international food programs, the national trend is toward more exciting flavors. More millennials have also grown up with immigrant parents and grew up eating ethnic food, so that is in play as well,” Gill said.

“The pandemic really helped drive this as well. We saw a lot of people begin experimenting with cooking at home and looking for new ways to add big flavor to bland or basic dishes, helping Bachan’s find a home in American kitchens nationwide,” he added.

Fast distribution growth

Bachan’s, which was founded in 2019 and is based in Sebastopol, CA, was already in wide scale distribution prior the cash infusion announced today. The company says its products are sold in more than 11,000 retail locations including Costco, Whole Foods Market, Sprouts Farmers Market, Target, Kroger and others. Publix and Albertsons are slated to be added to that list in the fourth quarter of this year. The sauces are also sold on Amazon.

Bachan’s is offered in four flavors: Original, Hot and Spicy, Yuzu and Gluten-Free.

The fundraise included investments from prominent Asian American personalities Pat Tenore, founder and president of the clothing brand RVCA and filmmaker Destin Daniel Cretton. Existing investor Prelude Growth Partners and New Fare Partners also participated in the round.

Looking for passion in the hotbed of Sonoma County

As part of the transaction Sonoma Capital founder and managing partner Jon Sebastiani will join the company’s board of directors. Sebastiani, who helped build such brands as KRAVE jerky (a brand he's now endeavoring to revive), said Bachan’s is the fastest growing condiment brand in the country.

“We are so proud to partner with a Sonoma County founder. Justin’s mission in bringing his family recipe to life in Bachan’s has been nothing short of visionary thus far, and I look forward to continuing to build on the massive retail momentum that he and his team have built,” says Sebastiani.

When Sebastiani founded Sonoma Capital in 2016 he said he and his partners were looking for ‘passionate entrepreneurs.’ In the years since the firm has invested in companies like Guayaki, True Botanicals, Hum Nutrition, Vintage Wine Estates and Beekeepers Naturals.