Califia Farms announced it raised more than $50 million in a funding round led by Ambrosia Investments, along with existing investors Sun Pacific and Stripes Group. The Los Angeles-based maker of plant-based beverages said it would use the money to bolster manufacturing capacity at its plant in Bakersfield, California. It also plans to continue commercializing innovations, such as non-dairy creamers, cold-brew coffees and its recent lineup of probiotic dairy-free yogurt drinks.
The investor group includes Academy Award-winning actors Jared Leto and Leonardo DiCaprio, model Karlie Kloss, Olympic athlete Shaun White and musicians Tyler Hubbard and Brian Kelley of the band Florida Georgia Line. Leto has also invested in Blue Bottle Coffee, and DiCaprio has bought stakes in Beyond Meat, natural energy drink maker Runa and chickpea snack brand Hippeas, according to BevNET. Both have also invested in organic beverage maker Suja Juice.
Califia also announced that it appointed Sandeep Patel as chief financial officer. Patel has worked in investment banking for 20 years as a managing director of Barclays and also Goldman Sachs. He will be in charge of the company's finances, as well as some operational, legal, technological and strategic areas, Greg Steltenpohl, CEO and co-founder of Califia Farms, said in a release.
This latest investment should help solidify Califia's market leadership position in non-dairy coffee drinks, creamers, plant-based beverages and, most recently, probiotic yogurt drinks. The more than $50 million in new funding comes after previous rounds, which brought in $15 million last fall from CapX Partners and $50 million in October 2015 led by Stripes Group.
The company hopes to pull ahead of the pack with probiotic yogurt drinks in the same way it managed to win over customers with its popular lineup of almond milks. CEO and cofounder Greg Steltenpohl told Food Navigator there were only two notable players in that category when Califia's products came out, and those were in the shelf-stable aisle — not in the refrigerated case where Califia's plant-based beverages can be found.
Things are a bit more challenging when it comes to probiotic beverages. Established competitors — such as Danone, Lifeway, KeVita, Siggi's and Good Karma — are already producing kefir, kombucha, and dairy- and plant-based yogurt drinks. Califia hopes to stand out from the crowd by offering high-quality products in attractive and innovative packaging. The products are also made with a special BB-12 strain of Califia Culture Blend the company said is well-known for bolstering digestive health.
The celebrity investors in this latest round bring a star-studded focus on Califia's on-trend products, especially since some of them have previously bought into innovative food and beverage companies. Their participation is additional proof that plant-based beverages and dairy alternatives are getting more popular.
Califia is also sponsoring Jared Leto's rock band, 30 Seconds to Mars, for its summer tour. It will introduce each show with a 90-second video about the company's mythical namesake, Queen Califia. The tour sponsorship and marketing outreach could help build buzz for the brand and its portfolio of products.
Newly appointed CFO Sandeep Patel's background in investment banking should also inform the company's strategic long-term growth trajectory. CEO Greg Steltenpohl said that Patel has deep expertise in helping high-growth companies "develop strong financial frameworks and access to capital compatible with a long-term vision."
With talent and connections on board, plus the additional financial resources, Califia could be organizing toward either a sale or a takeover, although the company hasn't dropped any related hints so far. It will be interesting to see Califia's next product innovations and what direction it takes as it aims to be "the leading plant-powered food and beverage company of the future."