- Alpha Foods, a California-based producer of frozen plant-based meals such as vegan pot pies and meatless burritos and tamales, just raised $7 million in a funding round led by New Crop Capital and AccelFoods, according to Food Navigator.
- The company plans to significantly expand its retail reach beyond Walmart, Kroger and Publix, where it is already well-established, and move into refrigerated food products later this year and into early 2020.
- CEO Loren Wallis said current trends in the industry have helped business. "It feels like we've reached a tipping point, that this is the perfect moment in time for our brand, when millennials in particular are looking for foods that are healthier, kinder to animals and kinder to the environment. They also love grab and go products," he told Food Navigator.
This is the first funding round for Alpha Foods since an initial venture round in 2016, a year after the company was established. It brings the total raised to date to $9.5 million, according to Forbes.
Alpha Foods' combination of executive skills has likely helped attract additional funding and put its products into the marketplace. CEO Loren Wallis has food industry experience from founding Good Karma Foods in the 1990s. Cole Orobetz, the co-founder, CFO and COO, brought accounting and capital finance skills to the table.
Wallis told Food Navigator Alpha Foods decided to start at the top when it came to retailers, and found Walmart, Kroger and Publix receptive to its frozen plant-based offerings. Now, more retailers are making room for meatless entrées by adding freezer space. As a result, Alpha Foods products are now in 6,000 to 7,000 stores and could double or even triple that in the next year, Wallis said.
While this level of growth is impressive for a new brand, meatless meals are increasingly popular with busy consumers who want to mix it up with flexitarian options. Plant-based is a booming sector. A study from DuPont Nutrition & Health found that 52% of U.S. consumers are eating more plant-based foods, and they believe it makes them feel healthier. Additionally, refrigerated plant-based meats and plant-based dairy products were named the fastest-growing categories with a 25% and 20% jump in sales, respectively, according to Nielsen data from the Good Food Institute.
Frozen meals are also seeing a resurgence lately as consumers shop for more convenient and less-expensive options. Sales of frozen foods have continued to increase and last year, volume was up for the first time since 2013. A study by sales and marketing agency Acosta found 26% of U.S. consumers are shopping the frozen foods department more frequently than they did the year before. All generations reported buying more frozen food, but the increase was driven in large part by millennials, 43% of whom said they bought more compared with the previous year.
Because of these trends, competition in the frozen plant-based space is significant, with Nestlé-owned Sweet Earth offering almost 50 products in more than 10,000 stores. They include frozen meals, burritos and breakfast sandwiches and chilled plant-based burgers and proteins and contain seitan, tofu, lentils, chickpeas and beans. Store brands have also gotten in on the action. Aldi's frozen vegan line, Earth Grown, makes quinoa and kale veggie burgers, and Trader Joe's sells a frozen cauliflower crust pizza.
Alpha Foods appears well-positioned — and perhaps even a year or two ahead of the game — to take advantage of all these developments. As long as the growth in plant-based products, meatless entrées and frozen foods lasts, more companies are likely to explore launching similar items.