The Checkout: Outstanding Foods, Thistle Close Funding Rounds; KarpReilly Invests in CBD Brand Peels

Welcome to The Checkout: an express lane for the weekly news you need to know, always 10 items or less.

Outstanding Foods Raises $10M, Launches Seasonings

Plant-based snack brand Outstanding Foods announced today the closing of a $10 million series A funding round as it seeks to grow its retail footprint along with its direct-to-consumer marketing efforts.

The round included investment by former Enjoy Life chairman Kenneth Harris as well as former Mission Foods CEO Javier Valéz-Bautista, who is now chief executive at El Dorado Foods. The new financing follows the close of a $5 million convertible note in June, and brings its total financing to date to approximately $23 million.

Funding will also support new product development. Outstanding Foods’ first product offering, launched in 2018, was PigOut Bacon Chips, which have since been discontinued due to complications from scaling and with supply chain, Glaser told NOSH in July. However, the brand plans to eventually relaunch the offering with fewer mushrooms and added protein. The brand launched PigOut Pigless Pork Rinds last February, followed up by the launch of TakeOut Meal-In-A-Bag Puffs in October. Earlier this week, the brand released an ad spot in support of the TakeOut Puffs launch, positioning the product as a better-for-you alternative to Cheetos.

The brand is now expanding its portfolio with the release of PigOut Pigless Bacon Seasoning, a plant-based bacon-flavored seasoning offered in Original, Hella Hot, White Chedda and KC BBQ flavors, sold on the brand’s website for $7.99 per shaker.

Outstanding Foods products are sold in retailers including Walmart, Kroger and Whole Foods as well as 7-11 stores in the Southwest, and the brand plans to expand its presence both nationally and globally, according to a press release.

“We’ve experienced explosive growth in 2020 in both our DTC and retailer channels, and feedback on our Addictively Delicious and nutritious products has been outstandingly positive,” said Bill Glaser, CEO and co-founder of Outstanding Foods. “This Series A financing will enable us to accelerate our mission of making it easier for anyone to eat healthier plant-based foods.”

Thistle Closes $10.3M Round to Push Into East Coast

San Francisco-based meal delivery company Thistle raised $10.3 million in a series B financing round to grow its reach across the U.S., a move which includes expanding into a new East Coast-based production facility.

The round was led by PowerPlant Ventures, who also led the company’s $5.65 million series A round in January 2020. Siddhi Capital, Alumni Ventures Group and the venture arm of Rich Products Corporation also participated in the round. The new funding brings Thistle’s total capital raised to approximately $26 million.

Thistle offers a variety of prepared meals including salads and grain bowls, as well as its own branded juices and shots. The company said it has served over five million ready-to-eat plant-based meals since its launch in 2013 and grew its customer base by 50% in 2019.

According to Thistle co-founder and CEO Ashwin Cheryian, the COVID-19 pandemic has “revealed many challenges within the food system,” including the importance of a healthy diet. Though eating healthy can be difficult for consumers, Thistle, he added, hopes to simplify the process and the geographic expansion will allow the company to help even more shoppers.

“We’re dedicated to making our products accessible to customers, empowering them to take their personal health by the reins and enjoy the ride, one bite at a time,” he said in a press release. “With this funding, we’ll be able to support even more people through scientific, evidence-based principles of nutrition that lead to optimal wellness, enjoyable eating, and a healthier planet.”

Last year, Thistle expanded into new markets including Seattle-Tacoma, Portland and Las Vegas, and opened a new solar and wind-powered facility in Vacaville, California. The company also made several additions to its executive team, including adding former Brandless CMO Aaron Magness as its new CMO and former Strava general manager Kyusik Chung as chief product officer.

The new funding will also be used to launch a complimentary virtual consultation service with its in-house dietitian this month, a program the company tested last fall.

KarpReilly Invests in Peels CBD

Los Angeles-based CBD startup Peels CBD secured a $4 million investment from private investment firm KarpReilly, whose portfolio also includes Spindrift, Hungryroot, Spudsy and Wilde Chips. The startup, founded by former NFL pro Chris Hetherington, offers CBD products made from the terpenes found in citrus peels, rather than hemp plants.

Drew Skolnik, principal at KarpReilly, has joined Peels’ board of directors as part of the deal.

“Peels has an incredibly unique set of products and approachable brand that can help them stand out in a crowded CBD space and navigate the complex regulatory environment,” said Skolnik in a press release. “We are excited to partner with impressive, passionate, and mission-driven founders like Chris and his team.”

According to Hetherington, Peels was launched to “to meet the growing consumer demand for CBD without the risks associated with hemp and cannabis CBD products.” Peels’ citrus-derived CBD is “nature-identical” to and offers the “same holistic effects” as hemp-derived CBD, as stated on the company’s website.

Peels’ tincture will be available for purchase online starting January 11 for $94.95 per 30-serving 1mL bottle.

While citrus-derived CBD is currently less widely used compared to hemp-derived CBD, several products featuring orange peel terpenes have recently emerged. Osaka, Japan-based company Hiro International launched a CBD oil containing orange peel-derived CBD last year, while U.S. based brands Citrus CBD and Nectar Botanicals also sell oils and tinctures featuring citrus terpenes, according to their websites.

Benford Capital Partners Recapitalizes Brothers International Food Corporation

Benford Capital Partners (BCP) announced last week the recapitalization of Rochester, NY-based food company Brothers International Food Corporation. Brothers founder Travis Betters will remain in his role as CEO as part of the deal. Financial terms of the deal were not disclosed.

Brothers, founded in 2001, consists of two divisions: an ingredients division, supplying exotic fruit ingredients to food and beverage brands, and an All-Natural division, marketing branded, co-branded and private label freeze-dried fruit snacks sold in retailers and through ecommerce.

The partnership will be focused on expanding sales and marketing efforts and new product development across both divisions, as well as pursuing add-on acquisitions of similar snack and supplier companies.

“Brothers is a differentiated, niche-market leading food company with an exceptional reputation as an innovative, value added partner to a diverse and blue-chip customer base,” BCP managing director Ben Riefe said in a press release. “The entire Benford team is looking forward to working with the Brothers management team in the years ahead.”

Betters said in a press release that the partnership with Benford Capital will “build upon Brothers’ legacy in our next stage of growth and success.”

“Our team looks forward to capitalizing on the opportunity for growth and consolidation in the fruit ingredients and healthy snacks space as we collaboratively develop and execute on our long-term growth plan,” Betters said.

Other food companies in BCP’s portfolio include Saco Foods and California Sun Dry. Whipstitch Capital served as the financial advisor for the deal.