Join the Newsletter

Stay up-to date with food+ag+climate tech and investment trends, and industry-leading news and analysis, globally.

Subscribe to receive the AFN & AgFunder
newsletter each week.

Kite Hill Raises $18m from General Mills’ VC for Plant-Based Dairy Products

June 8, 2016

Northern California-based Kite Hill, a plant-based dairy alternative startup, has raised $18 million in a round led by 301 INC, General Mills’ new business development and venturing unit, and CAVU Venture Partners, a consumer growth equity firm. The company will use the proceeds to expand its distribution while also increasing consumer outreach efforts.

The startup combines natural ingredients and patented biochemistry with traditional cheese- and dairy-making techniques to create alternative dairy products. Kite Hill places emphasis on sourcing high-quality, non-GMO almonds sourced locally from California’s San Joaquin Valley to make its proprietary almond milk fresh daily. The almond milk then becomes a base for a wide range of products marketed under the Kite Hill brand.

“We’ve received tremendous positive feedback from the trade and consumers in the short time that we’ve been in the market,” said Matthew Sade, CEO of Kite Hill, in a recent email to AgFunderNews. “If we are going to bring healthier, more environmentally friendly products to consumers, we need to make them available wherever people shop. This funding will help us do that.”

Currently, Kite Hill products can be found at Whole Foods Markets across the US, including four types of artisanal cheeses, five flavors of cultured yogurts, two cultured cream cheese spreads, and two varieties of ravioli.

“While plant-based milk has become easier to make, it is much more difficult to create cultured dairy alternatives. Kite Hill is the first and only company to crack the code on plant-based cultured dairy products that actually taste great. We have a proprietary understanding of cultured nut milk founded on a melding of deep culinary and scientific expertise,” explained Sade. “By combining patented biochemistry with traditional cheese- and dairy-making techniques, we have developed a range of offerings that are not only great tasting but healthier and more sustainable than their dairy counterparts.”

Kite Hill’s target consumer? Everyone, according to Sade.

“This means consumers with plant-based diets, as well as those who want to incorporate more plant-based foods into their diets, whether it’s once a day or once a month,” said Sade.

Sustainability is a big part of the brand’s platform. Kite Hill’s website contends that plant-based diets promote animal welfare by reducing reliance on industrial animal agriculture. It also states: “Plants like nut trees only require water, sunlight, and soil nutrients, and they give back to the planet by sequestering carbon.” When it comes to health, the company thinks nut milk products provide a healthy alternative to dairy.

“We certainly see trends toward increasing plant-based food consumption as consumers shift to entirely plant-based diets and others look to increase the portion of their diet that is plant-based. The global dairy category in undergoing change due to this shifting consumer behavior,” said Sade. “With the current global dairy and dairy-based meals market being a $350 billion market, we believe that there is a great opportunity for plant-based dairy alternatives.”

Competitors entering this rapidly growing plant-based dairy alternative segment include Ripple Foods, Daiya, Silk, SO Delicious, and Blue Diamond’s Almond Breeze. Some brands may feel a squeeze as the influx of options allows consumers to opt for the lowest priced product. Standing out amid the crowd will be key for companies who want to survive the tidal wave of dairy-alternative milk products flooding supermarket shelves.

What do you think about plant-based dairy or other plant-based products? Share your thoughts with Lauren at [email protected].

Join the Newsletter

Get the latest news & research from AFN and AgFunder in your inbox.

Join the Newsletter
Get the latest news and research from AFN & AgFunder in your inbox.

Follow us:

AgFunder Research
Join Newsletter