- Kite Hill, the plant-based dairy brand, received a $40 million investment primarily from General Mills’ venture arm 301 INC., as well as some money from CAVU Venture Partners and Whole Foods, according to NOSH.
- Although the brand received $18 million in investments in 2016, the company is looking to expand its factory capacity and focus on getting a larger quantity of its core products into thousands of stores nationwide — including Sprouts, Whole Foods, Target, Publix and Kroger.
- CEO Rob Leibowitz told Food Navigator this investment will help expedite brand growth and expand production. "The company has roughly doubled (revenue) each year and expects to continue on this path in the coming year," Leibowitz said. "We expect capacity to expand 2x to 3x in the near term."
For the third time since its founding in 2011, Kite Hill has received a pretty penny from General Mills’ 301 INC., indicating that the plant-based dairy manufacturer — and the CPG giant — may have struck gold.
This on-trend, plant-based dairy company has positioned itself in an interesting way within the category. Instead of focusing on liquid almond milk — which represents roughly 64% of the U.S. plant-based milk category, according to research firm Mintel — Kite Hill boldly decided to take on other sectors of the dairy industry.
With its focus on plant-based cheese, yogurt and yogurt drinks, Kite Hill is targeting less-developed categories that are attractive to vegan and mainstream consumers. If it is successful, it could gain a first-mover advantage in this category and further bolster its in-store presence, which has grown so quickly that it has already outpaced its production operations.
"Kite Hill is up this year over 50%, but it just broke through the 2% market share barrier. If you look at plant-based within fluid milk, it’s north of 10%. So you can see there where the real growth opportunity is," Leibowitz told Nosh.
If Leibowitz is right, Kite Hill stands to be the first company that will be able to provide on that customer demand, which is growing because consumers are generally more interested in and willing to try plant-based foods. That could be why the company plans to use this new round of funding to invest substantially in factory capacity.
Secondary to production, Kite Hill will continue to drive product innovation, but this time without overextending itself. Already, the company's portfolio includes cream cheese items and ravioli pasta. Leibowitz has said in the past that nothing is off the table when it comes to launching into new product categories.
"Kite Hill continues to set itself apart in what is now a mainstream demand for plant-based nutrition," John Haugen, the founder and managing director of 301 INC, said in a statement. "As more people are making changes in their diet, we see incredible untapped potential in the market for the brand to expand its consumer base and grow."
This third round of funding comes after Haugen stepped down from the position as interim CEO at Kite Hill in February. Perhaps his tenure there gave him insight into what ideas and innovation Kite Hill has in the pipeline. In a September conversation with Food Dive, Haugen pointed out that more than half of the investments 301 INC has made are in the plant-based space. Kite Hill, he said, has done "phenomenally well" because the products are high quality and taste great.
With continued investment in this brand, General Mills might consider acquiring Kite Hill entirely to give them access to their supply chain and marketing. After all, that is the idea behind these corporate venture capital arms in the first place.
"Frankly, I wish [the companies 301 INC works with] would all become General Mills brands," Haugen told Food Dive last month.