This week, Back to the Roots (BTTR), the maker of grow-your-own herb kits and now cereal, raised $5 million in seed capital to support the expansion of its growing product line.
Debut with the Mushroom Kit in 2011, a box that allows buyers to grow organic oyster mushrooms in 10 days with only a mist of water, the company soon moved into the herb kits and cereal and now has plans to launch nine new grocery products.
Return backers Black Mycoskie, founder of shoe company TOMS, John Foraker, founder of natural and organic food company Annie’s, and Nicolas Jammet, co-founder of salad chain Sweetgreen, all contributed to this latest seed round as well as $3 million raised through crowdfunding platform CircleUp. BTTR raised an earlier $2 million seed round in June 2015.
The funding will be used to support retail launches throughout the country, foster product development through R&D, and support new partnerships with key industry members.
Despite the seemingly sporadic array of product offerings, BTTR has seen rapid expansion since it started, especially during 2015. Its cereal product is now offered in Kroeger, Whole Foods, and Sprouts across the country, and other offerings are now available in 2,000 Home Depot locations.
“This time last year the cereal was just an idea,” BTTR co-founder Nik Arora tells AgFunderNews. “To see it now is great; we have so much gratitude for the people in this space. Our goal is to be the number one organic cereal in all three of those stores by summer.”
At a time when natural, organic, and health-driven consumer packaged goods are exploding on store shelves, it can be difficult for a brand to differentiate itself.
When the company began, Arora and his co-founder Alex Velez asked themselves where they fit in among the endless number of food companies.
“We started breaking it down into waves. First, you have the General Mills and Kraft companies where food safety trust is key,” explains Arora. “The second wave is the big brand food companies like Stonyfield and Nature’s Path focusing on the natural and organic side.”
According to Arora, BTTR is surfing the third wave, a rapidly rising group of companies going beyond natural and organic products to offer consumers radical transparency. He sees a clear mission for the brand: “the undoing and new doing of food.” The brand has trademarked the slogan “Undo Food.”
The company’s dedication to this ethos is clear, and so is its unwillingness to follow trends for trends’ sake. After all, BTTR launched a gluten-containing cereal product in the midst of a global war against gluten. The product contains three ingredients: organic stone ground corn flakes, organic sugar cane, and salt from the San Francisco Bay.
“It’s not wheat that is the problem. We stripped all the good stuff out of it, making it this refined, pure starch, sugary food. We’ve been eating it for 10,000 years—let’s not run away from that because the last 30 years of modern food science damaged it so much,” says Arora.
Major food companies create “heroes and villains” in the market to help leverage new products, says Arora. He cites the pervasive trend against fat that characterized many packaged good trends during the 1980s and 1990s. “Fads like fat-free, sugar-free, paleo, and gluten-free come and go, but you cannot argue with just three ingredients. No mom is going to question that.”
This undoing food doesn’t necessarily need to rely on the hundreds of millions of dollars going into tech fundings, says Arora. Although he recognizes that companies like Beyond Meat, Soylent, and Impossible Foods are working to solve problems in our current food system, he has some concerns about transparency.
“We believe in this idea that everything we create should not be patented. If you trust us to put it in your body, you should know how it was made,” explains Arora. “We already have 3.5 billion years of R&D—let’s use nature’s technology.”
Arora and Velez have also opted for a non-traditional approach to building a consumer base. BTTR has partnered with cafeteria food service provider Sodexo to deliver a Garden Toolkit containing the Mushroom Farm, Garden-in-a-Can, and Water Garden to 2,300 of schools across the country. They’ve also created a web-based curriculum to help students learn about food production as they work with the products throughout the school year.
Now, the duo is working on launching its cereal product in single serving cups in 400 schools throughout California. They’re also in talks with the New York Public School System. The K-12 space is where Arora and Velez see the greatest possibilities and potential impact for BTTR.
“We don’t have the budgets of these big CPG companies. If you line up 10 cereals, and ours is one of them, we have a long way to go before we can get over all the marketing from other cereal brands,” says Arora.
The road has not been without its challenges. Initially, the company completed the preparation, assembly, and packaging of its mushroom kits and water gardens in-house. Eventually, Arora and Velez realized the value of outsourcing and freeing up time to hone in on the company’s strengths.
Eventually, Arora and Velez realized that some of these steps were not in their core expertise. Soon, they found a company in Sebastopol that has been specializing in gourmet mushroom production for 35 years.
So how did BTTR go from mushroom kits to cereal?
“It’s crazy how produce and grocery are separate worlds with different nutrition standard and different buyers. We had this idea that if we could take the trust, transparency, and confidence, you feel when you walk into the produce aisle and bring it to the grocery aisle it would be huge,” says Arora.
Heading into 2016, BTTR has nine new products ready to launch, each one designed to further the brand’s undoing of food. Asked whether he’s considered competition and copycats, he says: “I hope we see other big brands simplifying their ingredients. We are going to keep raising the bar. In some ways, I feel like we just got started.”
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