A 20-year-old fitness enthusiast with a sensitivity to dairy has caught the eye, and cash, of General Mills for his plant-based, non-GMO protein bar marketed to athletes.
301 Inc., the investment arm of General Mills, and 2x Consumer Products Growth Partners (2x Partners) announced Tuesday a "significant" investment in D's Naturals, a Denver-based performance bar and nut butter company.
Daniel Katz started D's Naturals two years ago and has grown the company to nearly $10 million in revenue and wide distribution. He's now looking to some bigger players in the food business to help scale up his business.
Terms of the investment were not disclosed.
Golden Valley-based General Mills relies on 301 Inc. to sniff out food start-ups that are looking for expertise, money or both. General Mills — facing unrelenting challenges to its business with the stagnant sales numbers to prove it — hopes some of these investments will result in acquisitions earlier in the brand's life, before they become to expensive for General Mills to buy and still turn a quick profit.
"It's obviously our aspiration that we can be that indispensable partner," said John Haugen, vice president and general manager of 301 Inc. "And, hopefully, to have the opportunity to see some of these partners become a part of the General Mills portfolio."
For now, 301 — and its investment partner 2x — will focus on helping Katz grow and improve his business.
D's Naturals products hit several food trend high points: low in sugar, dense in protein, plant-based, non-GMO, soy-free, gluten-free, dairy-free and vegan.
When he was 18, Katz started tinkering with recipes at his home in Cincinnati. Once perfected, he moved to Denver and quickly gained distribution for his No Cow bars, which can be found in more than 10,000 retail locations across the United States.
Fluffbutter is the company's plant-based nut butter spread infused with brown rice and pea proteins.
With flavors like vanilla maple frosting almond butter and creamy chocolate s'mores, it may come as a surprise that there is less than 1 gram of sugar per serving, just like the bars.
Still, the company has a long runway left before reaching full speed and is looking to those with experience to help get there.
"I'm proud of what we've been able to accomplish in the last two years, but I'm even more excited for what's to come," Katz said in a statement.
301 fields a plethora of pitches from food start-ups across the globe.
The three things Haugen's team looks for are that it is a remarkable product, is on-trend with room to grow and is a company run by people willing to learn.
"What D has accomplished up to this point is impressive at any age. I know how difficult it is to get brands and businesses to this stage," Haugen said. "But what is special about this young man is he is both very accomplished, but also very humble and realizes there is additional expertise he can tap into."
Through 301 Inc., General Mills has invested millions of dollars in six different young food companies in the last two years.
Haugen said the investment in D's Naturals is in line with its previous co-investments, which have ranged from $1 million to $18 million.
General Mills last year acquired Epic Provisions, an Austin, Texas-based meat bar company.
In 2008, General Mills bough Larabar, a snack bar made entirely out of fruits and nuts. General Mills also makes Nature Valley granola bars.