Back to the Roots Nabs $2M in Quest to Become The “New Kraft Foods”

Oakland-based food company Back to the Roots announced this morning that it has closed its first funding round to the tune of $2 million. Fund Good Jobs, an Oakland-based organization designed to increase employment opportunities in the region, led the round. Other participants in the deal included a wide variety of high profile food, technology, and sustainability-focused leaders, like Annie’s CEO John Foraker, Clif Bar CEO Kevin Cleary, Jamba Juice CEO James White, and acclaimed food-author Michael Pollan. The brand intends to use the new funds to enhance its distribution, increase its online presence, and to continue its campaign to promote transparency in food products.

Back to the Roots has not only taken the market by storm with its unique and innovative products, it has a clear company ethos and goal as well. “We are passionate about undoing food,” says co-founder Nikhil Arora. “We want to share how, when, and where the food you are eating is grown versus this notion of ‘inventing’ new foods. Let’s take it back to how it used to be done and make it really relevant, thoughtful, and purposeful.”

Together with Alex Velez, Arora founded Back to the Roots in 2011 when the pair developed their grow-your-own mushroom kit, which uses recycled coffee grounds to accelerate growth. The company’s other flagship product is its water garden, a fish tank that uses hydroponics to grow herbs and micro greens. Velez and Arora branded these products as their ready-to-grow line, which has been expanded to include herbs that can be grown easily right out of their container. “We want to connect families back to food and undo the current system,” says Arora. The pair see themselves as pioneering a new wave of food-thought for the next generation, and hope to establish their brand as “the new Kraft foods” for millennials. “The next wave of food brands for the millennial generation is not just about natural and organic, it’s about radical transparency and simple ingredients.”

The brand has cultivated strong relationships with a number of key retailers, including Target, Whole Foods, and Costco. Arora and Velez recently launched the company’s new line of ready-to-eat products, including an organic breakfast cereal with only three ingredients. Best of all, the company prints the recipe right on the box. According to Arora, “Food should not be proprietary. The technology should be available to everyone.”

After gaining shelf space in the produce world, the pair set their sites on launching this ready-to-eat line to provide families with convenient access to healthy and transparent foods. So far, the line also includes a variety of Breakfast Toppers, which consist of grains, nuts, and dried fruits. They can be added to yogurt, oatmeal, or eaten by the handful. “We really feel like we have the retail partners and the experience to accelerate this line more than in the past,” says Arora.

Now, Velez and Arora have set their sites on getting their products into the very place that Back to the Roots was born: the classroom. “We came across this idea in a business ethics class, to grow gourmet mushrooms on entirely recycled coffee grounds.” In 2011, Velez and Arora were seniors in a UC Berkeley business ethics class when a professor’s comment sparked their intrigue. Both Velez and Arora, who did not know each other at the time, approached the professor for more information on his seemingly impossible proposition about gourmet mushrooms and old coffee grounds.

“We started doing research and doing test buckets in Alex’s fraternity kitchen,” says Arora. Once they had the product nailed, the duo walked to various Berkeley grocery stores to pitch their idea. Impressed with their entrepreneurship, the then-acting UC Berkeley chancellor gave the soon-t0-be grads a $5,000 grant. The company scored more grants in its early years and won a number of business plan competitions that offered cash prizes. Eventually, they raised $250,000 through Kickstarter. “Our goal was to raise $100,000, but the Kickstarter community definitely exceeded our expectations,” says Arora.

Having reached their current level of success, Velez and Arora want to champion their “new Kraft foods” mission at the school level. “We want to go deeper into schools. We want to develop custom sets of school lesson plans that have our concepts embedded into them.” Back to the Roots already has its foot in the classroom door. The company provides monetary donations to schools for every photograph of a fully-grown mushroom kit posted on Facebook.

In terms of the future, Arora sees one very critical area where food and technology can do a better job. “Technology for food packaging is huge. The cereal box industry hasn’t involved at all since its first inception with Kellogg’s. It’s the same cardboard box with the really ineffective plastic bag inside.”

For its new cereal product, Back to the Roots has tackled the lack of innovation in the packaging world by developing a milk-carton like container that uses 25% less packaging and has an impressive 90% fill-rate, which reflects the amount of space that the product actually occupies inside the package. “There is so much we can be doing to save through innovation and technology on packaging. The packaging must be sustainable, too. We have to innovate on all different levels.”

Back to the Roots new cereal packaging has allowed the brand to gain traction with online retailer Amazon. “Amazon performed shipping tests on our product. Cereal is one of the highest volumes sold in physical stores, and one of the least performing online,” says Arora. As a result, Amazon typically only offers cereal in packages of eight in order to compensate for the inefficiencies of shipping. “Because of the density of our cereal packaging, Amazon can offer a two-pack through Amazon Prime for only $9.99 with free shipping—just based on how we package it.”

“I think it is a really exciting time being here in the Bay Area, the heart of the local food movement in so many ways, and so close to Silicon Valley technology,” says Arora. “That is the big question we are going to grapple with: how do tech and food actually come together?”

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