- Better-for-you oat bar Bobo’s raised $5.5 million in funding, Food Navigator reported. The investment was led by Boulder Food Group. Ridgeline Ventures and VIGR Ventures also participated in the latest offering.
- The company projects 40% sales growth in 2019, after a 45% increase last year, as the bar maker further streamlines production.
- Bobo’s CEO TJ McIntyre told the food website the capital will allow the company to double its capacity. He said Bobo’s does not expect to be profitable until 2020.
The $5.5 million cash infusion for Bobo’s is a big step for a company that started in the kitchen of a mother and daughter more than 15 years ago. The baked oat bars, which are advertised as being gluten-free, vegan, non-GMO, Kosher and soy-free, are now found in more than 16,000 stores across the U.S., including Whole Foods, Albertsons and Kroger.
Even though Bobo’s has significantly lower sales than market leaders such as Clif Bar or Kind, the company appears to be doing well financially. With the company aiming to turn a profit as early as 2020, funding rounds like this one will be invaluable to increasing capacity and distribution — key to boosting sales and improving its long-term financial health. Bobo's will use the funding to help expand its new bakery in Loveland, Colorado.
In recent months, other smaller-named brands also have raised money to help fuel their expansion.
Startup 4th & Heart raised $7.6 million to expand distribution for ghee, a form of highly-clarified butter. Alpha Foods raised $7 million to expand its retail reach beyond Walmart, Kroger and Publix, where it is already well-established, and move into refrigerated food products starting this year. Stryve Biltong, a producer of beef snacks, raised $16.5 million that will be used to build awareness of the brand. Hart Dairy, a free-range, grass-fed milk manufacturer, closed a $10 million funding round to help it widen its product offerings and production capabilities.
Bobo’s makes its bars with only four ingredients: organic whole grain oats, organic coconut oil, organic whole cane sugar and brown rice syrup.
These simple and recognizable ingredients, along with its other product attributes such as non-GMO, place the company's bars squarely in the sweet spot of what consumers are looking for in the foods they eat. The bar shape also caters to people who are eating more of their food, especially breakfast, away from home while on the go. Bobo's is clearly focusing on shoppers who are participating in these trends, which will give it an advantage as it looks to ramp up sales and marketing of its product. It's likely these characteristics were prominently pitched by Bobo's as it raised money to fund its expansion.
Bobo's CEO told Food Navigator the cereal bar category could serve as a springboard to branch out into other breakfast occasions. For now, the company is wisely focused on increasing production and expanding its retailer partnerships before moving on to other product offerings. If Bobo's ever does decide to expand its product lineup in breakfast, it will already have collected deep insight of the category and a keen understanding of what consumers want in the foods they eat.