Farmhouse Culture raises $6.5m in financing round led by Gen Mills 301 INC, unveils new sparkling probiotic line

Farmhouse Culture raises $6.5m in round led by 301 INC

A $6.5m funding round led by General Mills’ 301 INC arm will help Farmhouse Culture - which specializes in fresh organic sauerkraut, sauerkraut chips and fermented 'gut shots' – expand its distribution and support new launches, including a new sparkling probiotic beverage.

The series D round, which was supported by White Road Investments and Renewal Funds, will help Watsonville-CA-based Farmhouse Culture (founded by chef Kathryn Lukas in 2008) establish itself as "the leading brand in the probiotic-rich category," said CEO John Tucker, who took the helm in February 2016.

The new 'Gut Punch' sparkling probiotic beverages, which will hit stores in the spring, are distinct from kombucha (they don't contain tea), but are also quite different to leading sparkling probiotic brand KeVita (which also features Ganeden's high-profile probiotic strain Bacillus coagulans GBI-30, 6086), because they start with Farmhouse Culture's signature fermented vegetable base (water, cabbage, salt, caraway).

Sweetened with erythritol and stevia extract and flavored with beets and fruit flavors, they contain 20 calories per 8oz serving (or 30 cals per 12oz bottle/SRP $3.79) and come in six flavors: cola, cherry cacao, ginger lemon, orange cream, mango guava, and strawberry hibiscus.

“Yes, you could say it’s a risk to spread ourselves across all these different categories [Farmhouse Culture's portfolio now spans fresh sauerkraut, fermented veg, fermented beverages (‘gut shots’ and the new sparkling probiotic beverages), and sauerkraut-based Kraut Krisps],” Tucker told FoodNavigator-USA. 

“But there’s an enormous amount of white space in this burgeoning category and we want to seize the opportunities as soon as we can.

“Speed to market is a critical element of my vision for the business because I want Farmhouse Culture to be the brand that consumers see as the leader in the probiotic-rich category. And the beauty of teaming up with General Mills 301 INC is that it gives us access to world class resources, R&D capabilities, and supply chain expertise.”

Retailers are putting fermented foods in different places in the store

Right now, Farmhouse Culture products are in around 2,500 stores including Sprouts, Whole Foods, Earth Fare, The Fresh Market and Hy Vee, with a strong presence on the west coast. However, the cash injection will help the brand extend into the conventional channel, said Tucker.

“Retailers are all putting fermented foods in different places, so sometimes our kraut will be in a fermented foods section with our gut shots and other products, sometimes it’s in the produce section, sometimes it’s in the deli section and sometimes it’s by refrigerated condiments, and all of these work well for us.

“The gut shots are also doing tremendously well, and the Kraut Krisps – which contain 50% sauerkraut – were only launched in February but they are definitely picking up traction and we’ll expect to see a broader rollout very soon as many of the snack resets haven’t occurred yet.”  

Farmhouse Culture is best known for its organic sauerkraut, which is fresh, refrigerated and non-pasteurized (whereas most sauerkraut sold in grocery stores is pasteurized and shelf-stable).

It is made by shredding cabbage and other veggies, adding salt, and packing them in barrels. After a period of time, the process of lacto-fermentation begins as the veggies start to pickle, creating complex and nuanced flavors, says founder Kathryn Lukas, who argues that “Good kraut should be crunchy, slightly effervescent, and pleasingly sour.”

It is then packaged in BPA-free pouches featuring ‘ferment-o-vents’ that allow the microorganisms to breathe, and works as a standalone snack or as an addition to salads, dogs, sausages, sandwiches and numerous culinary dishes.

The fresh kraut contains vitamin C and Lactobacillus bacteria that would typically be killed during pasteurization, and is safe to eat as long as it is refrigerated.

Fresh kraut, which is also high in vitamin K, fiber, folate and a good source of zinc and other minerals, also has a superior taste and texture to cooked products, claims Lukas: “Cooked kraut loses its snap and vibrancy when cooked… Raw kraut delivers a crisp, tooth-satisfying crunch that you’ll never you find in a can.”

“We’ve been watching the functional foods space grow exponentially over the past few years, with Farmhouse Culture emerging as a leader. The recipe for success is there: probiotic-rich products that taste great, led by a team with strong experience in the natural foods industry.”

John Haugen, general manager, 301 INC

Probiotic claims

While we have been eating fermented foods (beer, yogurt, sourdough bread) for years, products that are actively marketed as such kimchi (pickled vegetables), kombucha (fermented tea), kefir (cultured dairy drink) are still new to many Americans.

However, they have huge potential as consumers seek bolder tasting, ‘ancient-yet-modern’ products associated with digestive health benefits, claimed Tucker, who said that the brand now tends to talk more about ‘probiotic-rich’ foods as “some consumers associate the word ‘fermented’ with sour, spoiled or alcoholic foods.”

Not all fermented foods are necessarily packed with probiotics (click HERE), he acknowledged.

However, Farmhouse Culture is confident that the lactic acid bacteria in its kraut, fermented veggies, and gut shots meet the WHO definition of probiotics (live microorganisms that, when administered in adequate amounts, confer a health benefit on the host), although its product labels only refer to the genus and species of the cultures, and not specific strains, with the exception of its Kraut Krisps, which include the well-characterized probiotic BC30 (Bacillus coagulans GBI-30, 6086).

Get a sneak peak at the new sparkling probiotic beverages at booth #5366 at Expo West this week.

What are probotics? According to the World Health Organization, probiotics are “live microorganisms that, when administered in adequate amounts, confer a health benefit on the host.” 

What are fermented foods? According to 'wild fermentation' guru Sandor Ellix Katz, fermentation describes the transformative action of micro-organisms and the enzymes they produce: “Mostly this is a process of anaerobic digestion - where no oxygen is present - eg. yogurt, kefir, sauerkraut, kimchi, beer, wine, and bread. However, vinegar, kombucha, tempeh, molded cheeses, and other fermented foods do require oxygen.”

Examples of fermented foods: Kombucha (fermented tea), sauerkraut (fermented cabbage), natto (fermented soybeans), yogurt, cheese (fermented milk), beer, wine, sourdough bread, miso, soy sauce, and kefir. 

According Katz, fermentation can make food...

  • More digestible: It can break down lactose and gluten to make them easier to digest, make minerals more bioavailable);
  • More nutritious: It can increase B vitamin content and produce new metabolites and anti-carcinogenic compounds;
  • More stable: eg. Sauerkraut has a longer shelf-life than fresh red cabbage;
  • More tasty: From kombucha and soy sauce to pickled cabbage, fermentation creates strong flavors;
  • More safe: Fermentation can preserve foods and break down some toxic compounds such as cyanide compounds, oxalic acid, phytic acid, and even residues of organophosphate chemicals used as pesticides and herbicides.

According to Dr Kayellen Umeakunne from the Morehouse School of Medicine, Atlanta, GA, a combination of changing diets and lifestyles, hospital births (more caesarians), less breastfeeding, antibiotic use, and our ‘war on germs’ has wreaked havoc with our gut bacteria.

To improve the ratio of good to bad bacteria in our guts, we should all be eating more fermented foods, probiotics (live ‘good’ bacteria) and prebiotics (stuff that the good bacteria can feed on - resistant starch, non-starch polysaccharides, dietary fiber, oligosaccharides), she says. 

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