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The Spoon

Daily news and analysis about the food tech revolution

Magic Spoon

Weekly Food Tech News Show: Wither Magic Spoon?

On this week’s Food Tech News Show, Mike and Carlos welcome Rachel Konrad, former head of communications for The Production Board, Impossible Foods and Tesla.

The stories we catch up on include:

You can find the video version of this Weekly Food Tech News Show below, and you can find the audio-only podcast on Apple Podcasts.  

Keto Cereal Craze Over? - FTNS

A reminder: It’s the last two days to get early bird pricing for the Smart Kitchen Summit. Use discount code PODCAST at checkout for 15% off of tickets. 

Is The Keto Cereal Craze Over?

I have a soft spot for sugar cereals.

Having grown up in the 80s eating big boxes of Captain Crunch, Lucky Charms, and Life (my friends called me Mikey!), I still salivate when I see big, colorful boxes with leprechauns and monsters in the grocery store cereal aisle.

So when keto-friendly, processed sugar-free sugar cereal substitutes started appearing in 2018 and 2019, I was excited. Like any self-respecting adult, I’d moved on to more responsible breakfast offerings, but saw these new keto-free cereals as a guilt-free time travel machine back to the land of the magically delicious.

I wasn’t the only one. The product’s early success accelerated during the pandemic, a time when people were bored at home and ordering lots of food via delivery. This led to an impressive series B in 2022, where the company scooped up $85 million. That funding fueled the company’s expansion into retail, and now you can find Magic Spoon in places like Costco, Target, and Walmart.

With widespread availability, the company should now be beating the old-school, better-for-you cereals like Grape Nuts and granola, right?

Maybe not. According to a tweet by Andrea Hernández of Snaxshot, Magic Spoon cereal has hit the clearance bin at Sprouts, a chain specializing in premium brands. The pic, which Andrea also posted on Linkedin, led to much discussion about whether the better-for-you keto cereal trend is over.

While it may not be over, you have to wonder about the long-term prospects of Magic Spoon and competitors like Schoolyard Snacks (formerly Cereal School). The first problem is they are just very expensive. Unfortunately for these brands, breakfast cereal is a commodified item, something most normal adults aren’t willing to pay a 3x premium for.

The other problem is addressable market size. I like Magic Spoon (or actual sugar cereal) as a once-in-a-while nostalgic escape, but realistically, I’m not going to make it a part of my everyday routine (and, as I said, I really like sugar cereal). I imagine this is pretty typical of their addressable target market.

Finally, there’s the question of taste. I’m fine with it, as are many others, but some think the sugar-free taste is a poor synthetic representation of the real thing. In a way, this criticism echoes some of those who have heard about Impossible and other plant-based meats (though I would argue both the purchase motivation and rationale for plant-based meat are much stronger, and the addressable market much bigger).

So is the keto, better-for-you sugar cereal trend over? Probably not yet, but I have to wonder if the VCs who wrote large checks for fund companies making tiny boxes of cereal for adults had rigorously worked through all their assumptions about how big these markets would be.

Impossible, Brave Robot, Magic Spoon. Are We Near a Tipping Point for New Foods?

To borrow from Phil Collins, there is definitely something in the air when it comes to the food in our kitchens. While I don’t think we are fully there yet, it feels like we are the cusp of major changes to what we eat at home.

I got to thinking about this last week when I noticed my day started eating a bowl of Magic Spoon‘s “healthy” sugary cereal and ended with a few bites of Brave Robot’s non-animal flora-based ice cream.

Neither of these products existed little more than a year ago. Both sell direct to consumer. And both are new formulations of old standbys angling to replace existing products we currently stock in our cupboards.

Oh, and both are delicious.

They are also expensive. It’s $40 for four boxes of Magic Spoon and $58 for four pints of Brave Robot. That’s WAY too expensive to be mainstream right now. So even though my kitchen carries these items, I recognize that I am a very off to the side as an edge case.

It would be cliché to say that we’re in the first inning of this food tech game and that prices will come down as those companies scale up. Of course they will. The point of this post is that we aren’t in first inning any more.

In addition to new cereals and ice cream, my freezer is full of Impossible and Beyond plant-based meat, I drink oatmilk, I enjoy JUST egg products, I’ve become addicted to Pig Out plant-based pork rinds, and I’m anxiously awaiting the day Loca will sell its plant-based cheese online.

All of these products feel mature. They aren’t almost there, they’re here, and they have arrived at just the right time and they are at scale. Sales of plant-based foods were already growing before the pandemic, which added some rocket fuel to the mix. And now, these new foods don’t have to rely on traditional retail infrastructure to reach consumers. Brands can market on social media and sell directly through their own websites. Like Magic Spoon and Brave Robot, Impossible has its own sales channel, as does Pig Out and Beyond will soon be following suit.

This is good because consumers are getting used to buying their food online. The pandemic pushed people into record amounts of grocery e-commerce. And now that we’ve been doing it for months and formed new habits, the idea of buying food — especially non-produce items — online is almost second nature.

There is still a ways to go, I’d call this the end of the first quarter, and dominance perpetuates itself, so existing big CPG players will remain big (think: Oreos and Doritos and such). But looking at where we are now, the next generation of food products becoming our new normal is no longer against all odds (the superior Phil Collins song).

DouxMatok To Bring Its More-Efficient Sugar to North American Food Products

Israeli food tech company DouxMatok has entered into a deal with a North American sugar refiner to manufacture commercial quantities of its “more efficient” sugar, according to Food Navigator. The first products containing this sugar are expected to hit the market early in 2021. 

DouxMatok’s Sugar Reduction Solution uses the food additive silica to carry sugar molecules and make a food taste sweeter than it would using a comparable amount of plain sugar. Using this method, food companies could use less sugar in their products, since the sugar-infused silica diffuses the sweet taste more efficiently. DouxMatox says food companies can typically use about 40 percent less sugar in their products and still get the same sweet taste.

The company told Food Navigator this week that it is currently working on a second-generation version of its product that will use a more “clean label” fiber than silica (which passes through the body once the sugar is metabolized). While he couldn’t name specifics, DouxMatok founder Eran Baniel said this new carrier for the sugar molecules is definitely a fiber and that it is “slightly more effective than silica in certain applications.”

Nor did Baniel say which North American sugar refiner his company has teamed up with to get its first products in the market. The company struck a deal with Südzucker in Europe in 2018. The North American partner will be announced in October.

While it doesn’t exactly take science to understand the harmful effects of sugar on the human body, many companies are leveraging science to create alternatives. Joywell Foods uses protein found in the “miracle berry” to create an alternative sweetener. Alluose is another sugar alternative, and one Magic Spoon uses to sweeten its kids-cereal-for-adults product.

DouxMatok’s silica product currently works with baked goods, confections, chocolates, and a few other products. According to Food Navigator, the company hopes to find a similar sugar-reduction method and technology for “high-water activity products” like sodas and juices.

Sweet! Joywell Foods Raises $6.9M to Develop Plant-Based Protein That Can Replace Sugar

Joywell Foods announced today it has closed a $6.9 million Series A round to further develop its plant-based sweeteners derived from the proteins of “exotic fruits.” The round was led by Evolv Ventures with participation from Khosla Ventures, SOSV, Alumni Ventures Group, and other investors. It brings Joywell’s total funding to $13.2 million. 

Joywell says it will use the new funds to build out its proprietary platform, which uses both plants and fermentation technology to create healthier sweeteners derived from the protein of certain fruits. Right now, that includes the so-called miracle berry, otherwise known as synsepalum dulcificum. The berry contains a protein called miraculin, whose sweetness “is up to 5500x that of sugar,” according to today’s press release. Joywell has so far commercialized one product, a popsicle, using miraculin.  

Joywell told AgFunder News today that it is also working with another plant-based protein called brazzein, which is derived from the Oubli plant common to West Africa. Part of the new funds will be used to further develop products from this as well as other plant-based proteins, which the company says it will test through limited retail and direct-to-consumer channels.

Joywell’s work addresses a massive and well-documented problem in the U.S. food system: sugar consumption. The average American consumers roughly 17 teaspoons of sugar per day, which is 57 pounds of sugar every year, according to the University of California San Francisco. Excessive sugar consumption, as most of us know, can lead to health problems like type 2 diabetes, heart disease, and obesity. 

Tech startups are tackling this problem with a range of different ways. Magic Spoon uses an ingredient called Allulose in place of sugar in its line of cereals, for example. Other companies are bypassing alternative ingredients altogether and experimenting with ways to improve the existing sugar we’re all so addicted to. An Israeli company called DouxMatok, for instance, combines sugar with food-grade silica to make it more efficient. That in turn allows companies to use 40 percent less sugar in their products. 

Joywell’s use of miraculin actually modifies the taste of food, so that even something sour can taste sweet if miraculin is added. The company says it has a range of potential applications, from baking to dairy to frozen desserts. In doing so, the company hopes to help reduce, if not outright eliminate, our overeliance on sugar in the foods we eat.

Magic Spoon, the Low-Carb, Gluten-Free Keto-Friendly Cereal, Now Available in Mini Boxes

When I was growing up in the ’70s, there were fewer victories greater than my mom agreeing to buy the variety pack of mini cereal boxes. Apple Jacks, Froot Loops, Frosted Flakes, some healthy option I ignored, all shrink wrapped together for glorious consumption while watching Saturday morning cartoons.

Being a modern, health-conscious parent, those sugar-packed treats of yesteryear are verboten in the Albrecht household. Which is why I’m excited that Magic Spoon announced today that it is now offering its low-carb, protein-packed kids-cereal-for-adults in mini-boxes.

Spoon devotees might remember that we went a little ga ga over Magic Spoon cereal last year. (We even did a whole podcast about it.) Instead of sugar, the company uses Allulose, a sweetener found in sources like figs and raisins, and as I wrote at the time:

I dug into a bowl of the Fruity cereal this morning and it tastes just like the sugary cereal of my youth, but has only 8g of carbohydrates 0g of sugar and 3 net carbs for keto counters (Froot Loops has 26g of carbs, 12 grams of sugar and 23 net carbs). It doesn’t really taste like any actual fruit, it tastes “pink” to my tastebuds (which is probably influenced by its shocking pink color), but Spoon Founder, Mike Wolf thinks it tastes exactly like Froot Loops. Regardless of any synesthesia, I ate a whole bowl and was ready to eat more.

The only catch to this enchanted cereal was the fact that it cost $40 for a four pack of 7 oz. boxes. And up until today, you had to buy it in a four pack.

Magic Spoon’s new mini boxes aren’t exactly cheap. A twelve-pack including a variety of fruity, frosted, cocoa and blueberry flavors will set you back $29. Each 1 oz. mini box of Magic Spoon contains 12g of protein, 3g of net carbs and 110 calories.

The company raised $5.5 million in September last year and said at the time it planned to use its new funds to expand its business. These mini-boxes actually seem like a pretty smart way to do that.

With its low-carb, high-protein formulation, the mini boxes could open up Magic Spoon into the snack category. Additionally, in the time of coronavirus and social distancing, having individual, single-serve boxes could make it easier for Magic Spoon to get into offices or cafeterias. Though, single-serving boxes also creates more packaging waste.

Magic Spoon’s mini-move also steps on rival The Cereal School, which offers its healthier cereal in single serve bags.

Regardless of the reasons, the arrival of Magic Spoon minis may just mean that have to clear my Saturday morning, fire up some classic cartoons and enjoy a few bowls of cereal.

Magic Spoon Raises $5.5M Seed Round for Its Healthy Take on Sweet Cereal

Magic Spoon, a company that makes a healthy sugary-tasting cereal, has raised $5.5 million in seed funding, according to an article on Food Dive. The round was led by Lightspeed Venture Partners with additional participation from Joseph Zwillinger (Allbirds), Jeff Raider (Harry’s), and David Gilboa and Neil Blumenthal (Warby Parker).

The company plans to use the new funds to expand its business, make new hires, increase marketing efforts, and create new cereal flavors.

Magic Spoon is a non-GMO, gluten-free, grain-free, soy-free, and wheat-free cereal that’s keto-friendly and still tastes like a sweet cereal you’d find in a grocery store aisle. It also contains more protein and fewer calories than your typical box of Froot Loops. The company uses a natural substance called Allulose, which is found in some fruits, to get its sweetness. My colleague Chris Albrecht got his hands on some not long ago and gave all the cereals a rave review. The cereal also has to be ordered online and isn’t available in grocery stores yet, though Magic Spoon keeps selling out of inventory so clearly it doesn’t need to be widely available at big-box stores just yet.

Company founders Gabi Lewis and Greg Sewitz are no strangers to alternative ingredients. Prior to the Magic Spoon, the duo made cricket-based protein bars under company Exo, which they sold to Aspire Food Group in 2018.

Magic Spoon’s one catch is its price: it costs about $40 for four seven-ounce boxes. Lewis told Food Dive he “hasn’t heard much pushback on the price” as of yet. Part of that’s likely due to who Magic Spoon is currently targeting: health-conscious millennials who are used to buying groceries online and paying higher prices for trendy foods.

The company’s main competition comes from The Cereal School, who makes another version of “healthy” sweet cereal and sells it online. Unlike Magic Spoon, however, The Cereal School has made a conscious decision to remain bootstrapped as long as possible, a decision that’s led to some manufacturing issues in the past. The Cereal School’s product isn’t cheap either, at $50 for 24 single-serving bags.

Those price points may work now while the concept of cereal innovation is hot and early adopters are willing to pay. However, either company wants to expand and cater to the everyman at some point, they’ll need to find a way to bring that price point down without sacrificing the quality of the ingredients.

Podcast: The Sometimes You Just Want to Talk About Breakfast Cereal Episode

I love a good conversation about changing the world as much as the next person, but not every podcast has to be a TED talk, ok?

In fact, sometimes you just want to talk about cereal, and that’s what Chris Albrecht and I did in this episode as we break down the taste, ingredients and business model of Magic Spoon, a new “kid’s cereal for adults” we (mainly me) have been raving about the around the Spoon’s virtual (read Slack) water cooler.

So grab a bowl, a big spoon, and some milk and hit play below, on Spotify or download directly to your device.

Review: Magic Spoon is the (Expensive) Kids’ Cereal for Adults, and is Magically Delicious

I have an 8 year old, but we don’t ever buy him sugar cereals, in part because I know I would gobble up most of the box. At my age/metabolic rate, the effects of Lucky Charms tends to linger a lot longer than I’d like them to.

Which is why I was excited to learn about Magic Spoon, which brands itself as “Childlike Cereal for Grown-Ups.” The cereal comes in four varieties: Fruity, Chocolate, Cinnamon, and Frosted, and boasts that it is high in protein, keto-friendly, non-GMO, gluten-free, grain-free, soy-free, wheat-free and has nothing artificial.

Magic Spoon is able to get all the sweetness without all the junk through Allulose, which can be found in certain fruits like figs and raisins.

It all sounds too good to be true and there must be some catch. There is, and it’s the price. You can only buy Magic Spoon in four-packs for a whopping $40. That’s ten bucks for a 7 oz. box of cereal. You can pick up two, 40 oz. boxes of Cheerios for less than $8 on Amazon.

OK, so it’s expensive, and you have to order it online, and thus wait for your breakfast. I actually bought mine about a month ago and had to wait for delivery because the backorder wait time was so long.

So, how does it taste?

Awesome. Magic Spoon tastes awesome.

I dug into a bowl of the Fruity cereal this morning and it tastes just like the sugary cereal of my youth, but has only 8g of carbohydrates 0g of sugar and 3 net carbs for keto counters (Froot Loops has 26g of carbs, 12 grams of sugar and 23 net carbs). It doesn’t really taste like any actual fruit, it tastes “pink” to my tastebuds (which is probably influenced by its shocking pink color), but Spoon Founder, Mike Wolf thinks it tastes exactly like Froot Loops. Regardless of any synesthesia, I ate a whole bowl and was ready to eat more.

If I’m honest, I preferred the Cocoa flavor, which was more in-line with what was advertised on the box and had a mellow chocolate flavor. I’ll update this post when I try the Cinnamon and Frosted (there’s only so much cereal I can eat in one sitting).

My one complaint is that there is a slight aftertaste, it’s not bad, it’s just more like a slightly metallic and, ironically, artificial feeling reminiscent of pre-packaged protein shakes (which is probably because of the whey protein isolate in the cereal). But that’s a minor quibble.

If Magic Spoon catches on, I suspect bigger CPG companies will have to look at jumping in with similar cereals, though they will have to figure out how to appeal to nutrition-conscious customers without cannibalizing their existing sales.

Will I plunk down another $40 for more? I’m not sure yet. That probably depends on how long these 28 oz. of Magic Spoon in my pantry lasts.

The bigger point is, I went from zero boxes of cereal in my house to four, which I will happily eat and share with my 8 year old.

Maybe.