Hershey-Backed Blue Stripes Raises $20 Million to Advance Its Technologies, Develop New Products

Blue Stripes, a purveyor of sustainable cacao fruit-based food and beverage products, announced today it has raised $20 million in a Series B funding round intended to help the startup advance its whole cacao process technologies, develop new products and expand distribution.

The round was led by Zintinus, a Berlin-based food tech venture capital fund, and also included financing from The Hershey Company, Whole Foods Market, DMG Ventures, Hamilton Lane and Praesidium.

Founded in 2018 by Israeli restaurateur Oded Brenner – who also created global chocolate retail and restaurant chain Max Brenner – Blue Stripes produces a portfolio of Cacao Water, Whole Cacao Chocolate Bars, Whole Cacao Granola, Whole Cacao Trail Mix, Chocolate Covered Cacao Beans and Dried Cacao Fruit. The New York-based company began as an independent retail concept before pivoting into CPG during the pandemic.

Blue Stripes’ products are currently available nationally through its website and retailers nationwide, including Whole Foods Market, Fresh Market and Sprouts, in addition to small premium grocers like Happier Grocer in New York City. As of May, Cacao Water was the brand’s best-selling product and is available in approximately 2,000 stores.

According to Circana, retail dollar sales in MULO and c-store accounts for Blue Stripes’ cacao waters was only around $45,600 in the 52-week period ending December 31, 2023, but sales were up 481.2% as the startup doubled down on driving consumer trial.

The brand’s unique production approach reduces cacao fruit waste by utilizing 70% of the fruit often discarded in the traditional chocolate-making process. With its products, the brand hopes to create an entirely new category by tapping the “unlocked potential” of the cacao superfruit, which is rich in antioxidants, minerals and fiber.

“For the last two decades of my career, I focused on showing people the whimsical and romantic side of chocolate. In this next chapter, I am on a mission to change what happens behind the scenes of the cacao industry – reducing the negative cacao industry impact on the environment, improving the economic value cacao farmers receive for their work and sharing the incredible functional benefits that the cacao superfruit has with the world,” said Brenner in a press release.

The Series B round comes amid the ongoing cocoa crisis that has resulted in multiple price surges. According to a report by The New York Times, a mix of low rainfall, plant disease and aging trees in 2023 led to a “disappointing crop” in the Ivory Coast and Ghana, which produce roughly two-thirds of the world’s cocoa. What’s more, cocoa production is a major driver of deforestation in tropical regions, releasing carbon dioxide into the atmosphere and destroying biodiversity.

Brenner and co-founder Aviv Schwietzer are hopeful they can revolutionize the chocolate industry with Blue Stripes’ sustainable whole cacao approach.

To garner further brand awareness, Blue Stripes has recruited celebrity chef Nick DiGiovanni as its latest brand ambassador. In his new role, DiGiovanni will leverage his collective audience of 33 million followers across YouTube, TikTok and Instagram to educate consumers about the cacao fruit, including its various use cases.

“I’ve known Oded for many years and have always described him as the modern day Willy Wonka,” said Giovanni in a statement. “Over the years, I’ve learned so much about the cacao industry, so I’m excited to be a part of the Blue Stripes team to show the world that the cacao industry is so much more than just chocolate.”