With New Investments, KEEN Growth Capital Establishes ‘Food as Medicine’ Platform

With the creation of a new growth platform called Advanced Micronutrient Food as Medicine, investment fund KEEN Growth Capital is aiming to bridge the gap between “average feel-good supplements” and pharmaceutical grade medications, the company announced this week.

In addition to Healright, which it owns outright, KEEN will place four new minority investments in the food and supplement space within the platform. Those include Eatwell, which produces meal kits reimbursed by health insurance providers; FYXX, producer of low carb and low sugar cookies, sweets and beverages; and medicinal powder brand MEND. The size of those investments was not disclosed. The fourth brand, functional gel maker Healthycell disclosed it had raised $1.62 million in a round led by KEEN.

Founded in 2017, KEEN Growth Capital invests in early-stage companies with revenues from $200,000 to $2 million in the food and beverage, health and wellness spaces. Its portfolio includes two other platforms: Functional Foods, which includes Indian-inspired yogurt brand Dahlicious, infant nutrition brand Medolac and condiment maker O’Dang; and Healthy Snacking, which includes Snax-sational Brands, The Jersey Tomato Co, sprouted seed and granola brand Go Raw and dried fruit maker Nosh Mates.

According to Smiga, the impetus to reappropriate the Advanced Micronutrition Food as Medicine company, launched in 2018 with Smiga and KEEN managing partner and CEO Jerry Bello as co-founders, as a new platform came after its acquisition of Healright that year, which makes bars that are said to mitigate chronic effects of obesity, diabetes and high cholesterol.

“As we were bringing [Healright] to market, we started to realize that there was a more emergent macro trend stimulus for things like food as medicine more broadly,” Smiga said. “So it was always on our radar as one of our three buckets. Today, as we look forward, it will be an increasingly large part of our portfolio.”

All brands under the platform will be “evidence-based products,” Smiga said, adding that while many brands make claims about improving consumers’ lives through benefits such as boosted immunity or improved gut health, KEEN has taken several steps to demonstrate the efficacy of the products in the platform. Beyond anecdotal feedback from consumers, he said, these brands all will use the results from consumer blood tests before and after using the products, as well as double blind studies and clinical trials conducted by institutes like University of California, New York University and University of Pennsylvania.

“That’s a lot better than ‘eight out of 10 jellyfish think this is a good product,’ or something like that, or ‘I take all these as an insurance policy, because I don’t know,’” Smiga said. “That’s unfortunate for consumers, right? To say, ‘I’m taking a bunch of stuff, I hope it’s good, but I really wish I knew more.’”

The companies under this new platform share a booth at next week’s Natural Products Expo East 2021 in Philadelphia, with the hope that retailers will take in multiple brands for a dedicated set, Smiga said. Advanced Micronutrition will also help these brands with their go-to market and channel strategies and support the brands’ manufacturing and R&D, with the platform having a dedicated team at KEEN. For example, Smiga said KEEN has helped both Healthycell and Healright partner with Panaceutics, a customized nutrition product manufacturer.

“The communication is this is your one stop shopping for evidence based food as medicine solutions for you and your family, regardless of your life stage,” he said. “We want to become known as a place people can come to and trust all the brands in the group.”

EatWell’s prescription meal kits are currently reimbursed through insurance benefits, and going forward, a major priority for KEEN is establishing insurance reimbursement across all five of its Food as Medicine brands to make them more accessible to consumers, Smiga said.

“It’s going to start with FSA, HSA from employers embracing it broadly, as a part of the benefits program that says ‘This is going to not only be good for our people, it’s going to reduce our long term care costs,’” Smiga said. “That migrates systemically, then the healthcare providers themselves will come around and ‘We need to open the door here.’”

While the firm has focused its investments mainly on traditional CPG food products, Smiga said that KEEN’s leadership team also has expertise in the nutrition and healthcare space. Bello — co-founder of Hain Celestial-owned snack brand Sensible Portions — graduated from Rutgers University’s College of Pharmaceutical Sciences, and also founded home health care provider IntraCare. Still, Smiga noted marketing these Food as Medicine products is “not as different as one might think,” from marketing traditional snack brands.

“It doesn’t do anyone any good if [the brands] stay as a small secret,” Smiga said. “Our role is to provide capital and guidance to help them scale effectively, and communicate as best and as appropriately as possible to consumers. The consumers understand the value that’s above the line of the deep science research, which then obviously is provided as well, but you have to be able to talk to consumers about simple life benefits as well.”