- Plant-based beverage company Califia Farms raised $225 million in Series D funding led by state-owned holding company Qatar Investment Authority. Califia said in a release it is one of the largest private capital funding rounds within the natural foods sector.
- Other investors include Singapore investment company Temasek, Canada-based Claridge, Hong Kong-based Green Monday Ventures and a Latin America-based family. The new funding group will take a minority stake in Califia Farms, with representatives from QIA, Temasek and Claridge joining the company's board.
- Califia said this funding round will help it continue to build its oat platform and launch new lines. The money will also allow the company to further invest in production capacity, R&D, U.S. penetration and global expansion.
With new international investors and a massive funding round, it seems like Califia Farms is looking to become a global plant-based powerhouse.
Securing funders around the world and adding those representatives to its board could be beneficial for Califia as it looks to grow shelf space and brand awareness globally. From Canada to Singapore, investors in this latest round could bring expertise and resources to the California-based company that other plant-based brands don't have access to.
Califia's biggest investor, Qatar Investment Authority, could especially help the company expand its reach since it has holdings around the world. Last year, QIA's CEO told Reuters that the firm aimed to put $45 billion toward U.S. investments, especially in real estate and technology. But QIA is shifting its strategy a bit, betting that plant-based will could be lucrative.
That reasoning is backed by data. According to a report by BIS Research, the plant-based food and beverage alternatives market is anticipated to reach $80.43 billion by 2024, increasing at an annual rate of 13.82%.
Califia Farms, which already has a portfolio of beverages made from almonds, coconuts and cashews, as well as a lineup of cold-brew coffee products and plant-based coffee creamers, is planning to capitalize on the expected growth of the alternative market by using these funds to launch new products.
Greg Steltenpohl, Califia's founder and CEO, said in the release announcing the funding that "speed to market is critical for companies at our stage."
In the past, Califia has successfully used additional investments to grow its portfolio. In 2018, Califia Farms raised more than $50 million in a funding round led by Ambrosia Investments. That year, the company introduced non-dairy drinkable yogurts with added probiotics. And last year, Califia launched a line of protein-enriched oat beverages called Ubermilk. Califia will continue to expand its oat alternatives with this money, which is particularly popular in the space. U.S. sales of oat milk have jumped to $29 million, up from $4.4 million in 2017, according to Marketplace.
Although Califia Farms is the third biggest U.S. plant-based milk company following Danone and Blue Diamond, according to Euromonitor, it faces increasing competition. An Innova Market Insights report on top trends for 2020 predicted that the plant-based dairy category will diversify as consumer interest continues to grow.
Many big companies have already introduced yogurts, drinks, coffee and ice cream featuring the oat beverage, including Nesquik, Chobani and Danone. New innovations and investments are making the space even more crowded. ChickP, a food tech startup based in Israel, recently launched a line of chickpea isolates designed for plant-based dairy alternatives and Mooala, a Dallas-based banana milk maker, raised $8.3 million in November.
Overall, the plant-based segment has seen a surge of funding in recent years that has been driving industry M&A, according to a report from Deloitte. Califia raised $115 million total funding before this latest round, according to Crunchbase.
The investor push into plant-based dairy comes as traditional cow milk consumption is declining. Two of the biggest dairy producers in the U.S., Dean Foods and Borden Dairy, have filed for bankruptcy in the last two months. Cow milk sales dropped to about $12 billion in 2019 from $15 billion in 2015, and at the same time, almond milk sales have jumped roughly 6% to $1.35 billion and oat milk a massive 662% to $59.8 million in 2019, according to Nielsen data cited by Reuters.
"The total change in dietary habits of the U.S. consumer is what is driving the decline in dairy," Steltenpohl told Reuters. As traditional dairy struggles, this funding could give Califia the capital and global resources to bring more disruption and take a bigger share of the market.