Positive Foods Company, which makes fresh packaged salads, heat-prepared meals and vegan overnight oats, has raised $7 million in funding as it goes after the $34 billion fresh prepared foods market.
In the year In 2018, co-founders Schuyler Derman and James Chan began selling healthy meals out of giant Yeti refrigerators at WeWork offices around Los Angeles, standing around the kitchens at lunchtime.
“At that point we were at 15 places, lots of places where you can’t walk to lunch, so you either have to order food or you have to go off campus,” Derman told TechCrunch. “The days we did ‘Positive Pops’ people loved it. We had a cult following because we had healthy meals at affordable prices.
The pair eventually motr made more than 100 pop-ups before setting up wholesale accounts with local coffee shops where they were selling food, which includes the Vegan Kale Hemp Caesar; Roasted beets, chicken and goat cheese salad; And vegan peanut butter overnight oats. Then the covid pandemic hit.
At the time, Positive Food was served in 70 coffee shops around Los Angeles. Derman has looked at other catering companies like Munchery and Sprig in recent years and has found innovation in the company’s business model as a result. Now Positive Food was seeing its own orders drop to zero in two days.
He added: “It was horrible, and we stood there helpless.
He and Chan had to make some tough decisions, including streamlining many businesses and expenses and letting casual employees go.
However, there was a silver lining to the positive feed. In January 2020, the company was in talks with Whole Foods about launching a pilot of the meals in a few stores. He was also moving to a new, larger facility to manage the new business.
In March, Positive Food was just weeks shy of launching that pilot before the entire world went into lockdown. The pilot didn’t happen, and although the company had to wait another nine months, it finally got into Whole Foods.
“What a rescue we were when we were talking to Whole Foods,” Derman said. “Our business went to zero, and then we were moving to a huge new facility. I remember thinking it was the smartest decision ever, or the decision that would end us. It turned out to be the right one.”
In fact, the lack of business has allowed Derman and Chan to get down to business and improve their business, including updating the menu and packaging and gaining approval from the US Department of Agriculture. If these early operations were still fully functional, Derman believes they would not be possible quickly.
During all that remodeling, they decided not to go back into the coffee shop business and instead focus on Whole Foods. Since then, he has expanded his location with them and now has 86 locations throughout California, including Bristol Farms.
Today, the company raised $7 million in new funding, including Blueyard Capital, Western Tech, Y Combinator, Gaingels, and a team of entrepreneurs including Thrive Market CEO Nick Greene, Instacart co-founder Max Mullen, Fitbit CEO James Park, Docker. – Founder Solomon Hicks, Faire CTO Marcelo Cortes, current CEO Josh Hicks, Xxtals CEO Mike Hurst, Foursquare co-founder Naveen Selvadurai, WordPress co-founder Matt Mullenweg, Timehop founder Jonathan Wegen and Behance founder Scott Belsky.
Much of the demand, like canned, freshly prepared foods, is driven by consumers’ shift to healthier lifestyles, which has prompted grocery stores to offer more ready-to-eat foods, prompting shoppers to come in and grab a meal.
Positive food vertical integration technology is mainly done in-house, including production and cold chain logistics network. This allows the company to deliver products directly from its kitchens to stores, Derman said, unlike other consumer goods companies that rely on third parties for production and distribution.
The company has a proprietary “Monte Carlo simulation” to input point-of-sale data to monitor inventory levels in stores and reduce food waste.
The new funding will be used to expand logistics and new channels beyond Whole Foods, which Derman could not disclose at this time. The company reported double-digit growth month over month, had zero starts and produced five times more food this year compared to the same period in 2021.
“We will expand into more channels and start in new stores, get more participation, develop more products and pursue new opportunities,” Derman said.