BALTIMORE — Kite Hill, a Hayward, Calif.-based maker of premium nut milk cheeses and yogurts, is growing at “a very aggressive rate that is rare in the food industry,” said Matthew Sade, chief executive officer. This fact was not lost on 301 Inc., the business development and venturing unit of General Mills, which along with CAVU Venture Partners led an $18 million funding round for Kite Hill in May.
|Matthew Sade, c.e.o. of Kite Hill|
“There were areas where we believed both CAVU and 301 could bring operational expertise to the table, and I think that was instrumental in our deciding to partner with them as a part of this most recent round,” Mr. Sade told Food Business News. “There were multiple financial options, but they had something that very few other investors offered, which was 150 years of building very well-run food businesses under the General Mills umbrella. We needed some of that expertise as we undergo this period of tremendous growth.”
Combining traditional cheese making techniques with a proprietary almond milk formulation, Kite Hill produces a range of products, including four artisanal nut cheeses, two cultured cream cheese-style spreads, two varieties of frozen ravioli and five cultured yogurts. At Natural Products Expo East, held Sept. 21-24 in Baltimore, Kite Hill launched two new flavors of yogurt, key lime and pineapple, as well as two multi-serve varieties, which are vanilla and plain.
“One of the things we like to say about the products we make, whether it’s our ricotta or the new plain unsweetened yogurt, is that we are giving people who don’t or can’t consume traditional cow’s milk dairy products that are really versatile and can be used as ingredients in the same way you would use their traditional dairy counterparts,” Mr. Sade said. “I think as an audience that historically has been constrained by the lack of offerings that’s available to them, it’s refreshing to have food that you’re not just being told this is how you use it, but you’re being given something as an ingredient that you can take creative latitude with and make anything you want out of it. Now you’re broadening different types of food people can eat and allowing them to have fun in the kitchen.”
In an interview with Food Business News, Mr. Sade discussed the company’s plans for maintaining its strong growth as well as the challenges of innovating with plant-based ingredients.
Food Business News: How do you identify whitespace opportunities in the marketplace for plant-based products?
Matthew Sade: It’s not very difficult if you’re crossing non-dairy with great-tasting. That intersection leaves a tremendous amount of whitespace in the category, regardless of whether there have been analogs and alternative dairy products in that category for many years. There are just very few products that meet that standard.
Historically there have been way too many products that have disappointed consumers of all sorts, and those products are not helping build the category. In fact, to the contrary, they’re really setting expectations on the part of consumers that there’s a really good chance that if it’s a non-dairy product then it’s going to taste bad, and that only makes it harder for us down the road to convert them to plant-based.
We look at the category and see where there is an opportunity to bring what is uniquely ours, and that specifically means where we can bring our ability and proprietary knowhow around culturing nut milks to create products that are exponentially better in the market than consumers have seen today.
What are the challenges or limitations in creating dairy alternatives with plant-based ingredients?
Mr. Sade: The protein in plants is very different than the protein in milk. I don’t think there are limitations, just challenges. We need to be creative in overcoming those challenges to develop new and exciting products.
We have a new product line that we’re working on that I think is going to continue to wow people, and I’m super excited about bringing that to market. There’s nothing that’s going to prevent us from entering any category that we believe is ripe for innovation.
Is there a place in mainstream grocery for Kite Hill?
Mr. Sade: If you used the plant-based milk category as a proxy for plant-based dairy, almost 10% of fluid milk sold in the United States is plant-based. Starbucks just announced it’s bringing almond milk and is rolling that out nationally. We’re well past mainstream consumption of plant-based.
We know there is evidence in the marketplace that it has been accepted by mainstream consumers. The question now is, can we offer products in adjacent categories that consumers would vote with their dollars that they’d be willing to consume?
In the past, what’s been on shelves has been the choice of lesser evils. None of them, whether it was yogurt or cheese, offered products that really approximated the taste and texture of their dairy counterparts. We feel Kite Hill is the first and only brand to offer almond milk dairy products that really do approximate the taste and texture of the products people are used to consuming. And because we know there is significant mainstream adoption of plant-based milk, then, yes, I would tell you these are appropriate for mainstream consumers.
What’s your advice for entrepreneurs in the food industry?
Mr. Sade: The challenge is not getting your product on shelf; it’s getting your product off of the shelves. The easy part is getting it into the stores. You know you’ve got a winner and you know you’ve done the hard work when it’s selling briskly, and that involves a lot of work to make sure that it doesn’t just get onto the shelf, but it gets off the shelf and out of the store. It’s usually a bit of a wake-up that, just because you received that first (purchase order) from Whole Foods, that it’s going to be smooth sailing.
What’s next for Kite Hill?
Mr. Sade: We’ve got a lot of really great product that we’re really excited about, and the challenge immediately in front of us is bringing these products to more people, and we need to bring them into more stores to make that possible. That’s the immediate objective.Longer term, I would tell you it is to continue to develop and broaden our platform of products and continue to innovate in categories where we know we have every right to believe we can compete and win.