Two coffee-forward brands are getting a jolt after receiving investments.
Eat Your Coffee, an energy bar company using coffee as an ingredient and as its caffeine source, and Alpine Start, a maker of instant coffee, both announced last week that they raised funds. The investments come as the global coffee market, especially specialty coffee, continues to grow thanks to a rise in disposable income, rapid urbanization and the emergence of cafe culture.
Here’s everything you need to know about both deals.
Eat Your Coffee Reenergizes With $2.5 M Investment & Rebrand
Energy bar maker Eat Your Coffee is hoping to give its sales a boost after recent reformulations, rebranding and a $2.5 million investment.
The Boston-based brand, which was born in a Northeastern University dorm room in 2014, announced this month that it raised a $2.5 million round led by an unnamed convenience-focused distributor. Other investors included Stray Dog Capital, Axle Capital and prior angel investors. The round far surpassed the company’s original expectation of $1 million. The announcement also comes as Eat Your Coffee closes its second Kickstarter campaign, where it raised over $21,000, bringing its total raised funds since its launch to over $3 million. The Kickstarter was started before it was known the investments were going to surpass expectations.
CEO and cofounder Johnny Fayad told NOSH he met the distribution company through the Masschallenge Startup incubator. The funds will be used to deepen velocities in its current stores in the grocery channel by increasing marketing spend and presence in grab-and-go, trial-inspiring settings like convenience.
“We are really focusing in with marketing support, make sure people know the brand especially with the rebrand,” he said. “The one way we think it’s going to be helpful with this is in convenience and grab-and-go settings. That is where our strategic is definitely going to be helpful in … expanding our presence there.”
Fayad added that by increasing velocities, he hopes the company can eventually lower the SRP of the bar, which is currently $2.99.
One of the reasons Fayad said he thinks investing in marketing efforts is important to the brand’s future success is because the company will be sporting a new look and reformulated recipes come January. The new packaging, designed by Minneapolis-based Ultra Creative, better highlights the product’s caffeine content.
“Most bars have a niche, right? With ours — and what we realized wasn’t really coming across and what we wanted to come across — is energy,” Fayad said. “That was kind of noticeable on our old packaging but not entirely. We would often get questions if there was actually caffeine in this. So that is with this new packaging — having Eat Your Coffee really clear and emblazoned on the front, with a cup of coffee in every bar just above that in bigger letters and then a caffeinated energy bar below — having those major callouts was very important in terms of communicating that to a consumer that this is an energy bar, not just another natural bar that tastes good, but something that is going to deliver them real energy.”
As for the reformulations, Fayad said customers will notice the new products are less bitter and more palatable to non-coffee drinkers. The brand’s flavor names have also been tweaked to be reminiscent of sweeter, Starbucks-like specialty drinks. Flavors in the pipeline will embrace more traditional bar flavors, the first being peanut butter mocha.
Alpine Start Adds to Former Facebook Employees to Star-Studded Investors
Boulder-based instant coffee maker Alpine Start Foods announced today that is has recieved an investment from venture capital firm Slow Ventures. Terms of the deal were not disclosed, but the company noted that the raised funds bring the total of all investments in the brand to to seven figures.
With the investment, Slow Ventures will also join the company’s team of advisors, along with its stacked team of prior investors, including Steve Hughes of Sunrise Strategic Partners, Hass Hassan of Greenmont Capital, and Jane Miller, the CEO of Cookie Chips. The company is still in its early years. It was founded in 2016 by professional climber, Matt Segal, and natural food guru, Alex Hanifin.
Hanifin said she thinks Slow Ventures, a fund founded by former Facebook employees, will especially help the brand navigate the changing retail environment.
“[Slow Ventures executives] are rock stars when it comes to everything tech and e-commerce,” Hanifin told NOSH. “We can’t wait to join our networks and see how we can grow and provide more consumers with the ultimate convenience of premium coffee on the go.”
Alpine Start, which specializes in single serve sachets that dissolve in both cold and hot liquids, will use the money for product innovation. The company said new products that cater toward convenience will be launched in Q1.
Some of the cash will also be used to increase the brand’s store count and distribution presence beyond outdoor recreation retail stores. Currently, Alpine Start can be found in over 500 stores, including a national relationship with REI, as well as grocer HEB.
“Instant Coffee has a legacy of tasting terrible, so our number one charge — and challenge — is to inspire coffee lovers to give us a try,” Hanifin said. “Our premium taste has won the hearts of some of the greatest climbers and outdoorsmen and women who truly embrace and live for the ‘Alpine Start,’ but we know premium instant coffee isn’t just for those who love the outdoors, it’s for all coffee lovers who are on the go daily.”
While instant coffee may seem contradictory to the slow food and craft movements, the category’s convenience is still resonating with consumers. According to a report from market research firm IMARC Group, the global instant coffee market grew at a CAGR of 3.6 percent from 2009 to 2016, reaching a total value of $9.9 billion last year.