2x Partners and General Mills Invest in No Cow Bar Maker D’s Naturals

Carol Ortenberg

Today 2x Consumer Products Growth Partners (2x Partners) and General Mills’ new business and venture arm 301 INC announced an investment in D’s Naturals, creators of the “No Cow” plant-based protein bars and Fluffbutter, a protein-infused nut butter.

D’s was started in 2015 by Daniel “D” Katz in Cincinnati, Ohio. The line focuses on offering protein rich products that are also low in sugar. Currently the No Cow bars are sold in over 10,000 retailers including 6,000 CVS stores and 4,000 GNC and Vitamin Shoppe locations.

Terms of the deal were not disclosed. Previously D’s funded the company through $3 million available to Katz’s business in a combination of family investment and a credit line.

Katz started the company at age 18 after leaving college just three months into his freshman year. In trying to live a healthier life, Katz began consuming protein bars and realized he could not tolerate milk products. He told NOSH that after learning that 60 percent of consumers are dairy sensitive and 33 percent can’t digest milk, he was inspired to start the plant based line. Katz pitched Vitamin Shoppe with samples of the bars in ziplock bags and was offered placement in 300 stores, if he could deliver the product in a month and a half. Six weeks later, working with a copacker and actual packaging, D’s was on shelf.

The company has largely focused on the nutrition channel to date, but has room to grow, Katz notes.

“The whole goal, in my mind, was to launch exclusively in the health and fitness channel because I saw it as being a product that was well differentiated on the shelf,” he said. “If you find a natural product in a GNC, that stands out on its own.”

The company is now on track for revenues in the ballpark of $10 million, after just two full years on the shelf.

John Haugen, VP and General Manager of 301, said the group was drawn to the company for its unique position in the category.

“It’s really a brand that combines all the trends we’re seeing in the marketplace today,” Haugen said to NOSH. “The combination of plant based, protein and low sugar we think is a really interesting formula.”

By focusing on the health and fitness channel, Katz has thus far been able to keep the company lean with a team of himself and two others. The bars currently are the bulk of the company’s sales. Despite being sold in health retailers, Katz told NOSH that the brand sells largely to women, and is less focused on the “meathead” consumer.

The capital will first be deployed to build a cast of executives around Katz.

“He’s unbelievably smart, dynamic, and has great ideas,” noted 2X founder Andy Whitman. “We’re very excited to build a team around him.”

Haugen says the capital will also go towards sharpening the brand positioning and branding, working to expand access to the brand through more channels and then promotion support for these new markets, helping scale the supply chain, and finally building an innovation pipeline including the buildout of the fluffbutter line.

“When you look at where this brand will continue to grow, and you look at where people are looking to buy these types of products, I think that there’s a number of channels beyond those early stage nutrition channels and that’s where a partnership with 301 Inc and General Mills can be really powerful,” Haugen said. “It’s kind of that old saying, ‘What got you here isn’t necessarily going to get you to that next stage and I think D really recognizes that.”

While General Mills does own Larabar, which also plays in the nutrition bar space, Haugen said that the two brands appeal to different consumers and approach protein and fuel in different ways. That said, the learnings from Larabar about the bar category will certainly go towards helping D’s advance in the marketplace.

For Katz, the choice to go with 301 and 2x Partners was easy. “if you [look at] a VMG or somebody large, I felt as though our company was not yet there yet. We have a lot more growth to be done where I want people who are going to roll up their sleeves and get their hands dirty,” Katz noted. “[This is] not me selling out, it’s about a large company buying in.”

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