What do radical transparency, mushroom farming and breakfast cereal have in common?
Startup Back to the Roots has woven the three together with its trademark drive to “Undo Food” and reconnect with where products come from—an idea that could disrupt the entire food and beverage industry.
“We were never a mushroom company or let alone a cereal company — it's all invented from this idea of something bigger than Back to the Roots,” cofounder Nikhil Arora told Food Dive. “How do we build in some way the next Kraft? How do we build a brand that outlives all of us, and how is that going to impact the food system that can last generations?”
The journey from ready-to-grow to ready-to-eat
In 2009, Back to the Roots co-founders Arora and Alejandro Velez learned in a class at Berkeley that they could grow mushrooms on spent coffee grounds.
That idea spawned an urban farming startup selling ready-to-grow organic mushroom kits. The kits expanded to include a garden-in-a-can, garden-in-a-jar, self-watering planter and water planter. They were all available in the produce section of grocery stores like Whole Foods, which is the startup’s biggest customer.
The experiences in the produce section inspired Back to the Roots to seek other ways to transform the food system: pushing into the center store.
“Being in stores so much, you realize a stark divide,” Arora said. “You walk six, seven, eight feet away to the first grocery aisle. It's a totally different world. A different manufacturing principle. …We think of plans and translate putting produce and grocery and putting these same food values in the different sections of stores.”
To put those plans into action, Back to the Roots secured $5 million in a strategic seed financing round this past January through a crowdfunding campaign on CircleUp. The startup expanded the campaign to a $10 million Series A investment in June.
In March 2015, Back to the Roots launched their line of organic cereals, each with only three or four ingredients, at Expo West. Those cereals began hitting store shelves last fall. They also debuted a line of breakfast toppers. The company is using its funding to expand product development in cereal and other categories, Arora said.
Back to the grains
Launching a cereal line may seem like a challenge at a time when giants like General Mills, Kellogg and Post control a substantial portion of market share. Sales for the category as a whole also continue to dip.
Back to the Roots saw that as an opportunity to reinvigorate a category that seemed primed for disruption in ingredients, processing, packaging and transparency.
“We fell in love with wheat and grains and just realized, here is this crop that we eat every single day since we are born—the heart of civilization for thousands of years,” said Arora. “Yet in the last 15 years, we started running away from it, and we realize it's not the wheat that's the problem. It’s what we've done to it.”
The Back to the Roots team began exploring farmer, miller and baker relationships and visited small farms and massive industrial mills. They saw how a popular processing method would strip the wheat bran, wheat germ and wheat germ oil from the grain, leaving an ingredient that is “dead, white, unrefined (and) oftentimes bleached flour. It’s no secret why people have an intolerance to it,” Arora said.
The team discovered the technique of stone milling in the process, which keeps the grain intact. Though the method has been in use for millennia, manufacturers often bypass this process in lieu of more mass scale, industrialized methods. Back to the Roots set out to change that.
“We're extremely passionate about grains,” said Arora. “I can't tell you how many conversations we had with people thinking we're nuts, launching a gluten-full cereal at the peak of the gluten-free movement.”
Getting around perceptions of grains as gluten-free product sales climb was one hurdle. But the other was entering a troubled food category that has fallen while more convenient, snack-friendly foods and other better-for-you options became modern breakfast staples.
“(Cereal) turned into a candy category, but with these huge health claims on the box about whole grains,” said Arora. “There's so much confusion. We have an opportunity to put a lens of sustainability, design and simplicity onto that category and then decided on this vision of undoing food and undoing categories.”
Radical transparency and the drive to “Undo Food”
At the heart of Back to the Roots’ produce grow kits and breakfast endeavors is the startup’s underlying mission to “Undo Food” through what Arora calls radical transparency. By bringing more clear information about products to cereal and the center store, Back to the Roots could play an important role in the cereal category’s revival.
“It's less to do about cereal as it is to do about such a strong lack of trust about cereal from this next generation that's seen it go from a health food to a candy category,” said Arora.
Besides the product name, the most real estate on Back to the Roots’ cereal boxes goes to the three or four ingredients in it. But the startup takes transparency another step further.
“We actually put the recipe for the cereal on the box,” said Arora. “We tell folks how to make the cereal themselves at home. That, to us, is, I think, what people are looking for.”
That level of transparency also extends to their packaging. Arora said the cereals are the first to not contain a bag in the box. Instead the pieces are directly in the milk carton-shaped package, which the startup formulated with 23% less material. Back to the Roots also prints what is used in the packaging on the box, which is becoming more important to consumers as concerns surrounding BPA and plastics arise.
This packaging decision is not only about transparency, functionality and reducing waste. It also makes financial sense. Arora said the shipping efficiencies this packaging offers are also a savvy way to help the startup keep its costs down.
“It's fun when the right thing to do for the world is the right thing to do for your business,” said Arora. “It's one of these things that overlap. In so many ways that's what we're trying to do at Back to the Roots — you can do well and do good at the same time.”
Radical transparency could be a crucial tool for manufacturers large and small today as they build trust with consumers. Back to the Roots continues to grow and bring food values to communities, but the company’s efforts could spread to others as the startup shares its vision of a revamped food system.
“Manufacturers’ secret formula to all these cereals is all about patented and proprietary recipes,” said Arora. “Whole brands have been turned upside-down. Food shouldn't be proprietary. Food shouldn't be patented. Food shouldn't be secretive. It's exactly how we're doing it. While yes, there is risk to it, we think that's just the right way to do it. I hope and believe that the consumers will appreciate that.”