Buddha Brands Seeks Next Growth Stage With New Capital

Quebec, Canada-based plant-based food and beverage platform Buddha Brands aims to drive growth through its omni-channel distribution strategy with the support of a recent $5.25 million funding round led by the Quebec-based investment fund Fondaction. With the money, the company plans to revamp its branding and packaging next year, hire additional team members, expand production of its bar line as well as introduce new products to support this next stage of growth.

Previously self-funded by its three co-founders – Chris Magnone, Mark Cigos and Michael Magnone – Buddha Brands closed a $3 million round last year, led by BDC Capital and Investissement Quebec. The company’s new investment partner is focused on supporting the growth of the Quebec economy by investing in local businesses.

“​​Choosing a capital partner is probably one of the hardest things entrepreneurs are faced with, but we made sure to keep our values at the forefront of that decision,” said Magnone, who also serves as CEO. “We believe we are in an industry with significant upside, and we want to be able to keep a long-term focus and make decisions that reflect that perspective, which isn’t always easy given some capital partners’ expectations and exit strategies.”

Buddha Brands, which started off in 2009 with a canned coconut water called Thirsty Buddha, last year launched a four-SKU line of bars under the Hungry Buddha brand in the U.S. In Canada, the company has an established distribution network for both its bars and for Thirsty Buddha. The brand has chosen to focus its stateside strategy solely on building the Hungry Buddha brand and will launch new multi-packs as well as e-commerce specific items in the near future.

“We launched our bars at the start of the pandemic, and it caused a number of challenges for our go-to-market strategy, which of course forced us to adapt and be nimble in real-time,” said Magnone. “Fast forward two years, and in the U.S., we have significantly upgraded our broker network and are taking a thoughtful approach to distribution, ensuring we are available at key retailers in regions that are strong for the brand and nutrition bar category, while also focusing on delivering optimal flavor and pack assortments for our accounts.”

The bars are currently available at Sprouts, Sam’s Club and Publix in the U.S. and numerous retailers across Canada. In the new year, the previously keto-positioned bars will undergo a full packaging refresh to place greater emphasis on its low sugar, plant-based protein and high fiber attributes. Magnone noted that while Hungry Buddha bars will retain their Keto certification, the company has recognized that the callout does not resonate with a broad range of consumers.

“We recognized a good amount of our consumers are not necessarily following a keto diet,” he said. “In 2023, our Hungry Buddha bars will launch with a new look and enhanced positioning which we are super excited about. We’ll be leaning into the superior macros that consumers love, while broadening appeal beyond the Keto community through a focus on our key product benefits.”

Magnone said that Buddha Brands will focus on growing its U.S. distribution network and increase advertising and promotional spend in existing and new accounts over the next two years. The new capital will be used to support those goals as well as make new hires on its operations, sales and marketing teams and invest in forecasting and data reporting tools.

“It may come as no surprise that the last two years have been hard,” said Magnone. “Supply chains were devastated and the bar category was decimated. Despite these cosmic challenges, we saw 67% year-over-year growth in our first six months… As the cost of borrowing capital continues to rise, we knew it was vital to secure additional growth funding to ensure we are adequately funded for at least the next 24 months.”