This story is part of a three-part series on Black-owned businesses who have filled holes created by an industry criticized for its lack of diversity. Check out these startups' stories.
Around Denise Woodard’s daughter Vivienne's first birthday she realized her child had several food allergies. When she started to look around grocery stores for snacks that Vivienne safely could eat, Woodard grew frustrated with the lack of options.
"I felt like they didn't meet our family's needs from a taste perspective, from a nutritional perspective and from a brand appeal perspective," she said.
Woodard, a former executive at Coca-Cola, wanted to change that.
"I wanted to create a brand that made products that had ingredients I felt good about, that tasted good and was, for lack of a better word, cool enough that people without food allergies would choose to also eat it," she said.
About four years ago, Woodard created Partake Foods. The company makes cookies that are free of the eight main allergens at a time when food allergies impact one in four consumers. Partake, which has seen big funding rounds recently, is seeing a surge in sales and has grown its presence in retail from 350 stores to almost 3,000 in less than a year, but it hasn't been easy getting to that point.
Struggles to get funding as a female POC
Even with her experience in the industry, it was difficult raising the funds to get started. Woodard started out by bootstrapping with a Kickstarter campaign and raising some capital from friends and family. She and her husband put in their savings, emptied her 401K and even sold her engagement ring to keep the company afloat in the beginning.
After struggling as a startup to have the money to stay afloat and facing rejection from 86 investors, the company was finally able to gain enough traction and metrics to raise a seed round of $1 million last year from some established investors, including Marcy Venture Partners, co-founded by Jay Z, and some of her mentors in the food space from her experience at Coca-Cola.
But it was a struggle getting there. When they closed that round they had less than $10,000 in the bank, Woodard said.
"It always feels like we're just scraping by, like you're almost at the end of the rope and thankfully the rope gets a bit longer," she said. "I think that we were able to raise the money though because I felt like the partners we brought on saw the need for our product. They liked our product in terms of taste and nutritional value, and really believed in me and the story of Partake. It's so personal to me. As much hardship as we've had along the way, I've never thought about quitting."
This year, the company raised another round of funding, with a new investment by singer H.E.R. and follow-on financing from Marcy Venture Partners.
Fundraising for businesses owned by women of color can be difficult. In 2017, according to Entrepreneur, only 2.2% of the total $85 billion in venture capital funding went to female founders. For women of color, that number is even smaller at less than 1%.
"The statistics are dismal. It's been one of the bittersweet parts of what's going on in this new racial reckoning in the country. We've gotten so much attention, but it makes me so sad because it's the same three or four food brands because there's not that many scaled Black-owned food brands in the country, which is so frustrating," she said.
Since Woodard was able to find success raising the money to keep the company going, she has a "Mentoring Monday," where she mentors a different woman of color founder every week. She said this fall she plans to start building a more diverse pipeline of Black talent in CPG.
"The statistics are dismal. It's been one of the bittersweet parts of what's going on in this new racial recognition in the country. We've gotten so much attention, but it makes me so sad because it's the same three or four food brands because there's not that many scaled Black-owned food brands in the country, which is so frustrating."
Denise Woodard
CEO and founder, Partake Foods
It was a long journey for Woodard to get to a place where larger investments were coming in. Her advice for other POC women founders: "I tell them to do what I did, which was try to get as far as possible without taking outside capital because it's going to be most likely, not to be a Negative Nancy, really hard for you to raise money. And so the closer you can get to profitability, the stronger the metrics you can show, the more likely you are to be able to get an investment. It's just this work twice as hard mentality or try to prove yourself twice as much."
Woodard said that her bigger goal is to expand store presence and grow into other product offerings that are free of the top eight allergens.
"When I started, it was around people with food allergies being able to partake, but I think there's an opportunity to create this bigger feeling of inclusivity for everyone, for women, for people of color, for people with food allergies, all just being able to come around the table and Partake, pun intended, together," she said.
Bittersweet success as industry begins to evolve
As protests against systemic racism have popped up across the nation, movements to buy from Black-owned brands spread too. Woodard said that Partake’s e-commerce took off, with sales on the website in June higher than all of 2019.
"It’s really bittersweet. It's brought a lot of awareness to our brand. I think we've received support from influencers that I would have never had," she said.
Before George Floyd's death, the company had already planned to donate 10% of its sales in June to the Food Equality Initiative, which is a nonprofit that supports food insecure families that have food allergies, with advocacy, education and food products.
"We've been able to support over 2,000 families so I was so happy that our biggest month ever has been the month that we committed to support a group that needs it so desperately," Woodard said.
As the Black Lives Matter movement grew, larger food and drink companies' are making pledges to create more opportunities for the Black community. PepsiCo, for example, committed to investing $50 million in Black-owned businesses and expanding the number of Black managers in its ranks by 30%.
Woodard said that, overall, her experience at Coke was positive, but there were many times where she was nearly the only person of color in the room, which can be "really frustrating and isolating."
Critics have said that companies have committed to diversity before without it making a real impact. Will this time be any different?
"Gosh, I hope so. I feel like the optimistic part of me believes that there will be some permanent change," Woodard said. "The pragmatic part of me feels like while we won't see a total 180, [but] I see investors and some retailers making commitments around supporting Black-owned brands that are multi-year commitments."
Looking at Uncle Ben’s changing its name and PepsiCo’s tangible commitment, Woodard said that when a big company like that puts a stake in the ground others could follow and hopefully creates "a ripple effect."
"I believe it's the right thing to do, socially, but if you look at how the world is going to change over the next few years with minorities becoming the new majority, it just makes business sense," she said. "There's case study after case study about how diversity creates a positive impact on business. So combined with the increased social pressure and the current climate and the fact that it's good business, I'm hoping that investors and large CPG do take note and take action."
