301 Inc., CAVU back Kite Hill's latest $18M funding round
- General Mills' 301 Inc. and CAVU Venture Partners are lead contributors to an $18 million funding round recently closed by plant-based dairy producer Kite Hill.
- Kite Hill's portfolio includes milk, cheese, cream cheese, and yogurt alternatives all derived from almond milk, in addition to raviolis that use these nut milk cheeses.
- The company uses a proprietary method to process the almonds into nut milk and patented biochemistry (proprietary cultures and enzymes) inspired by traditional cheese and dairy-making techniques to drive innovation in the plant-based dairy category.
301 Inc. and CAVU Venture Partners also joined together in an investment in cottage cheese startup Good Culture earlier this year. Their other investments are similar in that they represent fast-growing categories in food and beverage. But CAVU has tended to focus on beverages, such as cold brew coffee, kombucha, and sparkling cocktails, versus food for 301 Inc., including plant-based proteins from Beyond Meat and Rhythm Superfoods
More companies have joined in the scramble to acquire or invest in and incubate startups, such as Campbell (Acre Venture Partners), Hain Celestial (Cultivate Ventures), and Anheuser-Busch InBev's new accelerator (Techstars Connection). These companies realize the value in investing in a promising startup earlier on rather than waiting to acquire them after the company is more fully grown.
Whether it's a question of nutrition and health or sustainability, plant-based foods have become a go-to innovation for startups and major manufacturers. Revenue for WhiteWave Foods' plant-based foods and beverages segment soared 29% in the latest quarter. When set alongside the potential of Kite Hill and other plant-based product manufacturers, this sales growth demonstrates the ubiquitous nature of plant-based foods across the industry, regardless of company size.
The need for specialized, and often patented, technology could be a hindrance to the growth of plant-based foods among larger manufacturers. The demand is there, which makes the category attractive. However, logistics, technology, and ingredient supply could make this segment more difficult for manufacturers across the board to adopt.
Plant-based foods, such as Kite Hill and Ripple Foods' pea-based milk, often require specialized technologies that major manufacturers don't have access to. Instead of developing the technology themselves, major manufacturers may acquire or invest in companies that have already created plant-based products and technologies that will drive growth in the segment.