This Startup Has A Plan to Take on Big Food

November 15, 2016, 10:00 PM UTC
Courtesy of Revolution Foods

Healthy school lunch provider Revolution Foods is continuing its march down the supermarket aisle.

Earlier this month the Oakland, Calif., company rolled out a line of what’s known in the food industry as “prepared dinner mixes” or “speed scratch” kits (think Hamburger Helper). In this case, customers take the whole grain, spice blend, and sauce that are provided as part of the “Dinner Hero” kit, and add a pound of protein that they buy separately. The company also rolled out a “Breakfast Hero” line of pre-mixed pancake batters at the same time.

The new products join a growing list of goods from Revolution Foods that are intended to compete with traditional packaged foods categories—those staples that tend to sit in the middle of the grocery store—that have not seen much innovation. The company already has a line of packaged lunch meals called Lunch Bundles, which competes with Kraft Heinz’s (KHC) Lunchables, as well as an “In a Cup” product, which are noodle-based meals.

“A lot of the brands that were popular when I was a kid are still popular today,” said Steve Case, whose investment fund Revolution Growth (no relation) has a stake in the startup. “There’s a new portfolio of brands and companies that are really taking on what some have called Big Food.” Big Food–the sector’s shorthand for classic consumer packaged food companies–have suffered as consumers have shifted their dollars toward products they believe are healthier and less processed.

Revolution is also targeting categories that have experienced stagnant growth. “We’re going into a category in the grocery store that’s been declining,” says Kirsten Saenz Tobey, Revolution Foods co-founder and chief impact officer. “The solutions that have been in that category for many, many years are kind of stale at this point.”

Tobey and her co-founder and company CEO Kristin Groos Richmond believe Revolution Food’s edge will comes from a focus on nutritious products made with “real ingredients” that are free of artificial ingredients that Big Food companies are scrambling to remove from their products. Its Breakfast Hero line, for example, is made with whole milk and real eggs.

The company started in 2006 as a provider of nutritious, affordable school lunches to kids and now serves 2 million schools meals every week in 14 states. “We saw a huge opportunity to dramatically transform the way we feed kids,” Richmond says.

But early on Revolution’s co-founders started getting questions from parents about how they could take the company’s meals home at the end of the school day. That, coupled with calls from retailers interested in getting “mission-driven brands in the grocery store,” led them to branch out. The company has built on its purpose-driven roots by putting 1% of all its sales from its consumer packaged food items into a grant fund that goes to schools in need.

The company uses the insights its garners from serving kids lunch every day to design the products that end up in consumers’ shopping bags. Its “In a Cup” noodle line, for example, came about after realizing that three of the top 10 foods the company was serving to kids were noodle based.

Currently the consumer packaged foods part of Revolution’s business makes up a small percentage of its revenue, which is set to hit $150 million this year. But its products are already in 4,500 grocery stores in 44 states.

Read More

LeadershipBroadsheetDiversity and InclusionCareersVenture Capital