- Goldman Sachs is part of a $65 million investment in Ripple Foods, a producer of pea-based milk products, according to Bloomberg. This is the largest investment Ripple has seen to date, and brings the company’s funding to $110 million.
- The two-year old company uses it’s Ripptein pea protein to produce dairy-free milk, half-and-half and a Greek Yogurt alternative. Ripple’s founders told Bloomberg they’re also working on pea-based ice creams.
- "We are proud to invest in a company that has one of the fastest-growing plant-based product lines," Kathy Elsesser, the investment bank’s global chair of consumer retail and health-care groups, told the publication.
It's unknown how Ripple Foods plans to use its newly acquired $65 million, but the maker of yellow pea protein-based milk products may use some of that capital to grow production and distribution, hopefully bringing down its hefty price tags. Currently, a 48-ounce bottle of Ripple original "milk" is almost $5, which could keep some consumers from sampling their product or becoming frequent repeat customers.
Goldman Sachs could also be an invaluable partner for the young company moving forward. Just this past year, Goldman was tapped by Amazon for advice when the online giant decided to reach out to Whole Foods to begin acquisition talks. Ripple may be able to get similar assistance, but without the hefty $30 million advisory fees. If Ripple is looking to sell itself or partner with a bigger food company, Goldman Sachs could get the call because of its industry connections.
Pea-based milk alternatives are a relative newcomer to the plant-based milk category. Almond, soy, and even cashew and coconut are more commonplace, but that doesn’t mean they’re not vulnerable. Just as some consumers abandoned dairy milk for these beverages, they’re just as likely to move along to the next drink that offers better taste, nutrition and less of an ecological impact.
Ripple’s original (sweetened) milk could be just the beverage to warrant some sampling from almond or cashew milk devotees. It has 8 grams of protein per cup, 45% of the recommended daily calcium, and 6 grams of sugar. One cup of 2% dairy milk has the same 8 grams of protein, but twice as much sugar (12 grams) and roughly half the calcium (25%). Almond milk (sweetened), by comparison, has just 1 gram of protein, but roughly the same amount of sugar (7 grams) and calcium (45%).
Essentially, this comes down to protein. Even as consumers explore plant-based milk and meat alternatives, they still find value in protein. According to Business Wire, the global protein ingredients market is projected to reach $48.77 billion by 2025. If consumers can get a few extra grams of protein by swapping out their almond milk for pea-based milk, it may be an easy sell — assuming the new alternative tastes good.
This is a prudent time for Ripple to put this new capital to use and expand operations. Non-dairy milk sales in the U.S. have increased 61% during the past five years with sales reaching an estimated $2.11 billion in 2017. Consumers are already highly interested in plant-based milks, and the allure of protein as a value add could get them to sample pea-based milk.
Goldman Sachs' investment in Ripple is another sign that the plant-based milk trend isn’t going anywhere. That's bad news for dairy farmers, but good news for Ripple and its competitors.