- Startup 4th & Heart, which features a line of products with grass-fed ghee, or clarified butter, closed a $7.6 million funding round led by Harbinger Ventures. It also included funding from Cambridge Companies SPG, Blueberry Ventures and Boulder Food Group, according to a release.
- The funding is intended to expand the brand's distribution channels and increase its innovation in its ghee-centric product line. The brand is also using the money to launch a new product line in its portfolio called Woke, which features grass-fed collagen ghee protein and energy bars.
- In September, the brand plans to expand with shelf-stable items in Target's SuperTarget and PFresh stores. It also will increase the available SKUs of ghee butter spreads, oils and chocolate spreads at retailers where they are currently stocked, including Amazon, Whole Foods, Kroger, Sprouts and Gelson's.
In the last several years, ghee has been getting extremely popular, becoming a favorite ingredient of recipe bloggers and fitting into the trendy keto and Whole30 diets. Produced by heating butter, skimming off milk solids and leaving the water to evaporate, the end product is a shelf-stable cooking fat with a high smoke point, ideal for searing and sautéeing. Ghee sits right at the crossroads of Americans' interest in healthy fats and better-for-you food.
Research from the Cleveland Clinic has also shown that unlike butter, ghee aids in digestion and colon health. Others have lauded the product for its concentration of nutrients and benefits for daily energy.
The $7.6 million investment in 4th & Heart focuses on its products. Founder and CEO Raquel Travers told Food Navigator ghee is a category ripe for investment. She said only one in five consumers is aware of ghee, which creates an opportunity for the company's expansion. The brand is already growing 100% year-over-year, she told the trade publication.
This growth is likely why Harbinger Ventures selected 4th & Heart for investment. The amount of funding is well beyond what the company has previously received. Since its founding in 2015, the startup has received $3 million total, according to Crunchbase. This investment has nearly tripled the funds 4th & Heart can access, and could help raise consumer awareness of the ingredient.
While expansion is clearly a key consideration for 4th & Heart, it helps that the competition in the ghee category is limited. The company's main competition is from Organic Valley and Bulletproof. Organic Valley is a big name in the whole dairy industry and Bulletproof has continued to raise funds for its butter-infused coffee.
But since both of those companies have other main products, the playing field is open if 4th & Heart can continue to drum up consumer demand. With this funding, the company is also looking to differentiate its portfolio and not rely entirely on the niche category.
The company is choosing to venture into the hyper-competitive bar category, which has been increasingly popular. Although the Woke protein bar features ghee, it also focuses on whole eggs as a source of protein, which is what the brand is using to differentiate itself in this crowded category. This differentiation could be a new way to position ghee to bring more unfamiliar customers into the fold.
If 4th & Heart is successful, the move could open up a new market for pure ghee and allow the company to continue growing its market share. If consumers don't latch on, the company may have to figure out how to craft ghee into a mainstream replacement for butter in order to continue its growth.