Why Tofurky accepted $7M of private funding
- Tofurky recently accepted $7 million in private funding, which is the first debt position investment the private, family-owned business has ever taken on. The plant-based protein maker said it plans to use the money for new equipment, innovations in the pipeline and to scale production capacity for its core portfolio, according to a release sent to Food Dive.
- The company said sales are outpacing the plant-based food category's double-digit growth by about 4%, and its global retail footprint had increased by 30%, including 5,000 new locations in the U.S. While Tofurky built a 44,000-square-foot production plant in 2016, the company sees "compelling reason in the booming marketplace to take in capital investment and bolster production further," the release states.
- "We have been cautious about investment previously, not wanting to compromise our purpose driven culture, but are thankful to have found an entity that is aligned with our values and recognizes what we can achieve by pushing the plant-based category forward with affordable, delicious foods that are accessible to all," Jaime Athos, Tofurky's CEO, said in the release.
Overall growth in plant-based food and beverage products seems to have finally urged Tofurky toward more production investment and additional innovation. Tofurky isn't saying who provided the $7 million investment, but Athos told Forbes the loan was "led by a philanthropic type who believes in the company's mission to bring more plant-based foods to more consumers."
Plant-based foods have become the go-to option for many consumers looking for alternatives to animal-based products. A recent study from DuPont Nutrition & Health found 52% of U.S. consumers are eating more plant-based foods because it makes them feel healthier. Also, roughly 60% of respondents said switching to plant-based food was permanent — or they hoped it was.
Plant-based foods are no longer just for vegans and vegetarians since flexitarians, curious carnivores and environmentally conscious consumers see them as alternatives to meat, milk, yogurt and cheese. The company has sold 5 million holiday vegan roasts — no doubt boosted by the number of hosts with vegetarian or vegan guests at the table.
Tofurky has maintained itself as an independent, family-owned company since it was founded on a shoestring budget by Seth Tibbott in 1980. The firm's culture continues to value that independence, which is why the company hasn't accepted outside funding before now. CEO Jaime Athos previously told Food Navigator this attitude could give it a competitive edge over companies acquired by parent corporations who are not necessarily attuned to the founders' vegan or vegetarian values.
"We get offers on a weekly basis and, you know, it is maybe fun to think about," he said in 2018. "Sort of like when you buy a lottery ticket and you imagine what you could do with all that money, but I think for me I would miss the positive acts that I think our company is able to make in the world and on behalf of our consumers, who on some level, I think I would be letting down."
But now it sounds like the company has changed its tune and accepted funding to branch out. Some of that innovation is already evident. The company debuted a line of plant-based, dairy-free frozen cheesecakes last month at National Products Expo West under the Moocho brand. It is also relaunching several flavors of frozen, plant-based Tofurky Pockets, which were discontinued in early 2018. The plant-based dessert and plant-based meal solution may appeal to consumers looking for indulgence and convenience, especially coming from a well-established brand they're familiar with. These products are also non-GMO and use organic, locally sourced ingredients whenever possible, the company said, which are other on-trend assets.
The company got into the dessert business after including a vegan chocolate cheesecake made with decaf coffee from Oregon's Nossa Familia Roasters with its holiday feast last fall. Athos said there was "overwhelming feedback" from consumers and retailers wanting to see it in chilled bakery and frozen dessert cases the rest of the year. Three flavors of the new Moocho cheesecake product will be available in select natural and conventional retailers starting next month, the company said.
As for the frozen Tofurky Pockets, they will be coming back in Ham & Cheddar, Turk’y, Broccoli & Cheddar and Pepp’roni Pizza varieties. The company said it reformulated the recipe and packaging and had "great success" in a regional distribution test, so they will be available nationwide this spring in select natural and conventional retailers.
If Torfurky can use this first-ever outside cash infusion to accomplish its goals of increased production and more innovation, it could enhance its position as a pioneer and leader in the segment and potentially take additional market share from its main plant-based competitors — Beyond Meat, Sweet Earth Foods and Gardein.