Eat Well Group Acquires Majority Stake in Baby Food Brand Amara

Canadian publicly traded investment company Eat Well Investment Group has secured a majority stake in PataFoods, maker of baby food brand Amara Organic Foods, as part of the brand’s $12 million Series A funding round.

The deal, announced in October and closed last week, includes an option for Eat Well to acquire an additional 29% of shares for $29 million at a $100 million valuation. Eat Well was issued 2,047,299 preferred shares for $11.6 million, taking a 51% equity stake.

Eat Well president Marc Aneed said Amara is “an integral component” of its strategic business plan, bolstering its vertical integration strategy. Eat Well, which officially launched in mid-September, also acquired pulse processor Belle Pulses and protein snack brand Sapientia in July, part of its goal to grow its “seed-to-market operation” across ingredients, processing and CPG products. In Amara, Aneed said Eat Well saw an opportunity to enter a category that, while still dominated by “legacy dairy and highly-processed players,” is at an “inflection point” as millennial parents become more cognizant of early childhood nutrition.

“Our seed to market model was looking for just the right consumer brand to build out our ‘downstream’ leg,” Aneed told NOSH. “Bringing Amara into the group completes the model with an outstanding brand and product portfolio, which reflects our mission of feeding families globally and transformationally with plant-based innovation.”

Amara launched in 2017 in Whole Foods Markets. Its line of dehydrated, shelf-stable baby food is made with plant-based ingredients and is designed to be mixed with breast milk, formula or water to aid in the transition to a solid diet. The brand has since expanded to Sprouts, Costco and Walmart Canada, as well as Amazon and Thrive Market. Earlier this year, Amara grew its reach beyond baby food with a line of plant-based Organic Smoothie Melts for toddlers. The profitable company has tripled its sales year-over-year, according to Sturzenegger.

The Series A round also included Hayden Fulstone, co-founder of powdered drink brand Liquid I.V., along with other previous investors, and will be used to support Amara’s marketing, new product pipeline and new hires. The round follows the brand’s $2 million seed round closed in early 2020 with investors including Moses Ventures, health and beauty commerce distributor Pharmapacks and the former chairman of Hershey’s CPG unit. Sturzenegger said Amara first connected with Eat Well two years ago when raising its seed round, though Eat Well did not participate in that round. As Amara set out to raise its Series A round, Eat Well’s mission aligned for a major selling point.

“Looking at the growth that we had projected, we realized that we really wanted to bring in capital for our Series A just to be able to grow faster,” she said. “Initially we were thinking about doing a smaller round, but we just got some really great terms with Eat Well. [Eat Well is] also really focused on bringing better food to the world, and that’s our main goal, so I think it just made sense.”

Eat Well will work with Amara to “streamline costs and drive margins” through supply chain partnerships which will offer the brand “enhanced scalability” in ecommerce and retail. Aneed said the brand will specifically target convenience and club channels in 2022. The brand’s current team will continue to lead operations and day-to-day management, and its production and product portfolio will remain the same, Sturzenegger said.

The deal follows growing investor interest in the baby food space, especially after larger players in the category have come under fire for high levels of heavy metal content in their products. This summer, direct-to-consumer frozen baby food maker Tiny Organics closed a $11 million funding round, while low-sugar baby and toddler food brand Serenity Kids raised $7 million and Once Upon a Farm acquired baby and toddler meal provider Raised Real.

Because Amara’s products are shelf-stable, they’re offered at less than $3 per meal, a more accessible price than most refrigerated or frozen baby food start-ups, according to Strurzenegger. This gives the brand a “unique foothold” in the growing baby food market, Eat Well noted in a press release.

“A lot of newer competitors that are out there are higher in price point,” Strurzenegger said. “But for us, I really believe that the way you eat really affects how you think, feel and perform later on in life. [Amara is] really bringing all those benefits of fresh, but for every family.”