Ingredient producer and bar brand ReGrained announced the close of a $2.5 million round of funding to help propel the brand into its next phase of growth. Family-owned product development firm Griffith Foods led the round with Barilla Group’s venture fund BLU1877 and Telluric Foods also taking part. Roughly $700,000 of the round was also raised from 700 contributors via an equity crowdfunding round on Indiegogo.
Founder and CEO Daniel Kurzrock told NOSH that the goal was to find investors that could contribute both financially and strategically to the business.
“We’re not following the typical CPG playbook and felt strongly about bringing in patient capital that could actively help us,” Kurzrock said. “The concept of democratizing ownership of our mission (and success) [also] really resonated… These roughly 700 investors are “strategic” in a different way. We now have a small army of champions with a vested interest in seeing us be successful.”
ReGrained has already seen much growth with its line of bars produced from the spent grain left over at the end of the beer brewing. Typically seen as a waste product, ReGrained has a patent-pending process developed in partnership with the USDA that converts the grain into what the company has dubbed SuperGrain+ — a functional, nutrient-dense “superfood.” In the past year alone, the bars have grown from being sold in 100 retail locations to over 1,000, Kurzrock said.
The capital will initially go towards commercializing the ReGrained technology and setting up a new, state-of-the-art “regrainery” in Berkley, Calif. that will allow the company upcycle tons of spent grain per day — rather than the few tons per month it can currently handle. More importantly, the new facility will help the brand diversify its offering beyond consumer products and become an ingredient provider for other food brands.
Assisting them with this transition will be Griffith, which will offer its large client base products made with SuperGrain+. Kurzrock told NOSH that with easy access to SuperGrain+ he believes that demand from food producers will drastically increase.
“[One of the] reasons this isn’t already a staple in our food system is no proven demand,” Kurzrock said. “Part of this [lack of demand] is because there hasn’t been a readily available supply chain due to a lack of processing. But, it’s a chicken and egg issue that economists would call a ‘missing market’ because that supply chain would emerge with sufficient demand.”
The focus on the ingredient side of the business doesn’t mean ReGrained is abandoning its own line of products however. In fact, the company will release a new savory Supergrain+ snack at Expo West 2019.
Launching and selling the bars has been a learning experience for ReGrained, Kurzrock said. Originally sold with the tagline “eat beer,” the ReGrained team realized that there needed to be a slight repositioning away from the product’s boozy roots and more focused on developing consumer awareness of SuperGrain+’s health benefits. Kurzrock told NOSH that the bars allowed the company to test the marketplace for Supergrain+ as well as establish that this was an ingredient consumers would gravitate towards.
“The vision was never to build a huge CPG company.. [but] we figured no one could bring a product to market faster than we could,” Kurzrock said. “That was what we saw as phase one of ReGrained, bring the first upcycled spent brewers grain product to market and use that to create the momentum to create a brand extension — which we’re doing — but also create inbound demand from food manufacturing partners that could then become our early adopters and use our ingredient to bring it to market.”