KOS Closes $12M Round, Clayton Christopher Joins Board

Plant-based products brand KOS announced today it has closed a $12 million Series A financing round led by food and beverage industry veterans Clayton Christopher and Brian Goldberg.

The two investors are now playing active roles in guiding the brand’s strategy, KOS co-CEO Allan Stevens said in a phone call. Christopher, a co-founder of CAVU Venture Partners and founder of brands Deep Eddy Vodka and Sweet Leaf Tea, and Goldberg, founder and managing director of Redbud Brands, are regular collaborators with a record for successful exits.

“We’ve been fans of the KOS brand since it first launched and have watched it develop into something quite special in a very short period,” Christopher said in a press release. “I have been a heavy user of plant-based proteins, tried them all and KOS wins on both taste and nutritional profile. Over time as an investor, you see certain patterns repeat that are clues to a brand’s long-term success and KOS has exhibited many of them. We’re excited to be involved and to support the KOS team in their next chapter of growth.”

Founded in 2017 by co-CEOs Allan Stevens and Tony Stahl, KOS produces a variety of plant-based powdered beverages, supplements and peanut butters which are sold online and in roughly 38,500 retail stores nationwide. According to Stevens, the brand’s expansion in brick-and-mortar channels has been rapid; the brand began its retail rollout with Whole Foods in Q1 2020 and has since added nationwide chains like Walmart, CVS and Vitamin Shoppe. KOS’ retail footprint grew 470% year-over-year between 2020 and 2021 with additional accounts expected to open this year.

According to Stevens, Christopher has joined KOS’s board of directors, but Goldberg also regularly sits in on meetings as the duo have become pivotal to helping the brand scale its operations.

“These guys come from our world, being operators, but they have that experience that’s paid dividends for us,” Stevens said.

KOS’s development into a national brand was an unexpected journey for Stevens, he said. He and Stahl primarily worked as online marketers and did not have much interest in the nutrition space prior to founding the brand, he said. However, the early death of an employee at a previous business, named Tucker Heinz, inspired the co-founders to begin focusing more on their personal health and wellness.

“I was the guy that he called when he got the [cancer] prognosis, because he had left work to go see the doctor,” Stevens said. “And it just made me realize that we are mortal living creatures after all, and it rattled me to the core. He had just turned 40, and I was about to turn 40 at the time.”

In late 2017, the founders launched KOS online with a line of protein powders available in Chocolate and Vanilla flavors, but quickly began introducing new innovations like blue spirulina powder and mushroom-infused blends. Faced with both a crowded powdered supplements category and their own lack of experience with brick-and-mortar operations, Stevens said the company initially struggled to make the leap into retail. But doors began to open in 2020 following a successful rollout in Whole Foods and a seed round that brought in Springdale Ventures, which also participated in this most recent round. In particular, Stevens credits the company’s focus on functional innovations, colorful packaging and superior taste profile as helping drive trial and retention.

Since then, KOS has also brought on a number of experienced CPG personnel to support the business. In August 2020, former Nutrabolt EVP of digital Kevin Dalaeli joined as CMO, later taking the role of president and COO. Derek Dearwater, former president of nutraceutical brand Naturade, joined as chief revenue officer in February 2020.

The new financing also comes as the powdered supplements space continues to see significant growth and M&A activity. Earlier this month, plant-based protein brand Orgain was acquired by Nestlé Health Sciences. However, the pandemic and supply chain issues have also put strains on parts of the category; last year Danone sold plant-based nutrition brand Vega to a private equity firm for an undisclosed sum after the conglomerate struggled to transition the brand to organic formulations.

For KOS, Stevens said its goal is to double down on retail expansion while using the financing to help to fill additional roles, including a new national sales director position and regional sales managers. The company is also looking to fill marketing and ecommerce positions.

“We’ve pretty much been going at it with our broker network and Derek and a little bit of admin support,” he said. “But now we’re really going to make an effort to go deeper and spend more time working with category managers, building relationships, and taking advantage of opportunities with merchandising.”

While innovation has slowed down in recent months, KOS is preparing to introduce a new line of keto-friendly gummies this year, he added.

The company is also looking to increase consumer engagement via a new “habit-based wellness program” designed in partnership with a private health coach. The program is currently “in beta,” Steven said, but will aim to help consumers adopt plant-based diets and live healthier lifestyles.

“There needs to be an education,” he said. “We need to give ‘the why,’ we need to build on the foundation of why eating this way is actually better, and then show people how to do it.”