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Once Upon a Farm Acquires Baby Food Delivery Startup Raised Real

Once Upon a Farm has acquired Raised Real, a frozen baby food subscription by mail startup. With this purchase, Once Upon a Farm will add a frozen direct-to-consumer product line to its lineup. Deal terms were not disclosed.

From the release:

The purchase of Raised Real will expand Once Upon a Farm’s growing organic, refrigerated pouch portfolio to now include frozen meal options, making it even easier for parents to choose and prepare nutritious meals and snacks for babies and toddlers.

Once Upon a Farm, founded in 2017, has so far reached $30 million in revenue and is one of the leading brands in the organic and better-for-you baby food space. Earlier this year, company CEO John Foraker said the company was exploring direct-to-consumer because it’s where “much of the growth is coming from.”

Those explorations apparently led them to Raised Real.

In the same interview, Foraker said the company wasn’t looking at the frozen food aisle. Apparently that didn’t exclude frozen food delivered by mail, which is exactly what they are getting in Raised Real. Raised Real’s main products are flash-frozen plant-forward baby meals, which they sell in 12 or 24 allotments for an average price of about $5-6.

Longtime readers of The Spoon may recall Raised Real’s CEO and cofounder Santiago Merea was the founder of Orange Chef, a company that was sold in parts to Yummly (later itself bought by Whirlpool) and the Perfect Company. Merea’s shift to baby food was in large part driven by his interest in the category after he himself became a parent.

“I couldn’t wait for them to start eating,” Merea told me in in 2017. “But when I went to the grocery store all of the food was processed. I realized that all of these companies are speaking to the previous generations of parents. The current generation of parents doesn’t want processed food. They want fresh and organic.”

Merea’s background in kitchen hardware probably had a lot to do with the Raised Real’s initial product offering, which paired the company’s frozen food with a customized food blender that subscribers would get with a subscription commitment. The hardware eventually went away, probably to simplify the business model and because most parents already know how to use their own blenders.

Merea, who will be staying with Once Upon a Farm, sees the deal as helping bring Raised Real to a wider audience.

“John Foraker and his team at Once Upon a Farm are perfect to accelerate our aspirations at retail and help us bring to life our ambitious vision,” said Merea in this week’s release. “Our products, combined, create a leading plant-rich portfolio platform for kids of all ages across fresh and frozen, online and offline. This is a big day in our journey in which we can all celebrate.”

Baby Food Delivery Startup Raised Real Gets $5 Million Injection

When Santiago Merea spoke at last year’s Smart Kitchen Summit, he was Chief Revenue Officer of Yummly. Less than a year later, he’s heading up his own baby food startup called Raised Real and just raised $5 million from frozen food and food delivery giant Schwan’s Company.

The Spoon was the first to cover Merea’s transition to his new startup, which delivers flash frozen raw ingredients for baby food. Before Raised Real, Merea was an early entrant into the smart kitchen market with Orange Chef, a company that created a connected scale and app called the Prep Pad. The company eventually got acquired by Yummly, but Merea retained the rights to the Prep Pad, which he eventually sold to Perfect Company.

When parents sign up for a Raised Real subscription, they get a mixing machine that steams and blends the ingredients into fresh baby food. A subscription, which Raised Real calls a ‘Membership,’ costs $95 and ships every two weeks. Each box includes ingredients for 20 meals, translating to $4.75 per meal.

Raised Real ingredients and food mixer

The interest from Schwan’s came after Raised Real’s early success. According to Merea, the retention rate for customers is 80% after the initial box is shipped, and 90% after the second box is shipped, which translates to about a 72% retention rate after the first month. That is an impressively low churn compared with meal kit services such as Blue Apron, which retain only about half of their customers after the first month. That number drops to about a third of customers by month three.

Merea told The Spoon the company plans on using the $5 million to expand nationally. Today the company ships in five states in the western United States: California, Arizona, Oregon, Washington, and Nevada.

Schwan’s is an interesting investor. The company, founded in 1952, is the $3 billion frozen food and delivery conglomerate behind such brands as Red Baron pizza and Mrs. Smith’s frozen pies. The company has its own food delivery business, which dates back to the company’s beginning when founder Marvin Schwan started delivering ice cream to homes in rural Minnesota. Schwan’s eventually expanded into other food types like frozen fish and pizza, launching their own brands like Red Baron along the way.

According to Merea, Raised Real has two days to get its food packs into a customer’s hands once it packs the flash frozen ingredients with dry ice. While this gives them access to most of the continental United States, access to Schwan’s vast delivery infrastructure could still be critical in a national rollout. Access to Schwan’s cold chain delivery expertise could be important as well, since cold food delivery is, generally, one the trickiest and most expensive types of food distribution.

There’s no doubt that going from Yummly to starting his own baby food company with a partner like Schwan’s is a big shift in just a year, but Merea explains that the idea for Raised Real came to him not long after his twins were born almost three years ago.

“I couldn’t wait for them to start eating,” said Merea, “but when I went to the grocery store all of the food was processed. I realized that all of these companies are speaking to the previous generations of parents. The current generation of parents doesn’t want processed food. They want fresh and organic.”

Merea soon started experimenting with raw ingredients, mixing his own baby food at home. He wasn’t satisfied.

“The whole supply chain behind these ingredients still needed to be solved,” he explained.

He eventually started talking about the idea for a fresh baby food startup with his eventual cofounders, Michelle Davenport (a PhD in Nutrition and registered dietician), and Steve Kontz (whom Merea worked with at Orange Chef and Yummly) and, before long, Raised Real was born.

You can listen to an adapted version of this article below, or add the Daily Spoon Alexa Skill to get Spoon articles on your Echo device. 

Whirlpool Buys Yummly In Effort To Bolster Smart Kitchen Strategy

This week Whirlpool announced their intention to acquire Yummly, one of the Internet’s biggest food and recipe sites.

The acquisition comes as part of Whirlpool’s effort to accelerate its development for the smart kitchen of the future. At CES this year, the company announced new cooking automation features for its lineup of smart appliances, including new Alexa skills, scan to cook and guided cooking. This just a year after the company showed off a number of connected kitchen efforts at CES 2016, including Amazon Dash integration.

The guided cooking feature announced in January is particularly interesting in light of the Yummly deal.  The new feature enables users of the Whirlpool Smart Kitchen Suite app to send a recipe directly to a Wi-Fi powered appliance such as an oven, which will then follow the cooking instructions. It’s easy to envision how this cooking automation capability could be coupled with Yummly’s massive database of recipes.

This Is About Smart Kitchen Self-Sufficiency

Making the deal more interesting is the fact that Whirlpool recently parted ways with Innit, a smart kitchen platform company that had started working with the company’s Jenn-Air division in 2016. As I wrote in March, the breakup was in part due to Whirlpool’s decision to start forging its own technology path as it saw the smart kitchen becoming a reality over the past year:

With 2017 rolling around and the company viewing the market for connected kitchen products as more viable, it decided to more actively develop and expand their own connected product technology.  As one source told me, “if a startup can do with a few million dollars, why can’t the world’s biggest kitchen brand do it?” 

In other words, Whirlpool had decided it wanted to determine its own technology destiny rather than relying too heavily on external partners to forge a path forward. What the Yummly deal shows is that the company will not hesitate to acquire others as part of its effort to realize smart kitchen self-sufficiency.

And this deal does just that by bringing Yummly’s smart kitchen technology platform in-house. As Brett Dibkey, Whirlpool’s vice president of Integrated Business Units, said: “Yummly brings an outstanding platform on which to begin building our digital product offering.”

A Year Of Change For Yummly

For Yummly, the acquisition by Whirlpool comes after a year of management change. In October of last year, the company’s Chief Revenue Officer Santiago Merea left to start a baby food startup, and then in November the company’s head of product, Ankit Brahmbhatt, left to become Innit’s head of product (yes, Innit, the company who parted ways with Whirlpool this year).  Yummly also saw its CEO David Feller step back and hand the reigns to Brian Witlin, who in a previous life was the cofounder of Shopwell, a company recently acquired by…you guessed it…Innit.

Both Merea and Brahmbhatt came to Yummly through Yummly’s acquisition of Orange Chef, a smart kitchen company who had built it’s own connected scale, and had started to build  smart kitchen operating system and platform for appliance companies. For whatever reason, Yummly never partnered with any appliance companies, which could in part explain the departure of Merea and Brahmbhatt last year. It looks as though the Yummly-powered connected kitchen will finally be built, only now as part of the world’s biggest appliance company.

Whirlpool Becomes A Content and Community Company With Yummly Deal

Lastly, one important aspect of this deal is that it gives Whirlpool a massive infusion of cooking content and community. As newer companies in the connected kitchen like ChefSteps have shown, having strong recipe content and an associated community can create fertile soil upon which to launch new hardware products. With Yummly, Whirlpool now has a built-in community to tap into as it expands is smart kitchen product lineup in the coming years.

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Yummly Gets A New CEO

Yummly, the food and recipe discovery site and app with over 20 million visitors a month, has promoted its COO Brian Witlin to CEO while the company’s former CEO and co-founder, David Feller, has stepped back from day-to-day management while remaining an advisor and board member.

The transition, which was not formally announced, took place in November of last year. When I reached out to David to ask about the change, he indicated the move was for personal reasons and “had nothing to do with Yummly.”  Witlin, who has been with Yummly since 2012, previously was CEO at personal nutrition app company ShopWell.

The transition to a new CEO came within the same three month span that saw the company’s Chief Revenue Officer, Santiago Merea, leave to start a baby-food delivery startup and the company’s head of product, Ankit Brahmbhatt, depart for smart kitchen platform company Innit. The departure of Merea came just a little over a year after Yummly acquired Merea’s startup, Orange Chef. At the time of the acquisition, the combined company signaled an increased focus on more data-centric, personalized food recommendations. Not included in the sale to Yummly were Orange Chef’s intellectual property, which Merea sold to Perfect Company in December.

With the departure of Merea and Brahmbhatt (who also came over from Orange Chef), it’s unclear if Yummly still has intentions of expanding their focus.

 

Perfect Company Buys Prep Pad IP From Orange Chef Founder

Perfect Company, a company specializing in smart devices for cooking and preparing food in the kitchen announced today that they have acquired the IP for the Orange Chef Prep Pad. Orange Chef, founded by Santiago Merea started out in 2011 as an iPad kitchen accessory brand. Merea recognized early on that consumers were bringing their phones and tablets into the kitchen to follow recipe videos and instructions and started by making a sleeve for iPads to help the device stay clean. Orange Chef demoed the Prep Pad at TechCrunch Disrupt in 2013, introducing the concept of a connected scale with a companion app to make cooking and following a recipe even easier.

The company has experienced a lot of change since that launch three years ago, including an acquisition by recipe discovery platform Yummly at the end of last year. After struggling to launch a line of new countertop products, 60% of Orange Chef staff joined Yummly including Merea himself, as chief revenue officer. Prior to the Yummly acquisition, Orange Chef had also faced challenges with the Prep Pad, dealing with many user complaints around app support.

Merea has since left Yummly to become a startup founder once again, this time to start a baby food company which The Spoon reported in October of this year. The company details are vague, but based on the website will likely “offer an ingredient delivery service and 10-minute prep time for fresh-from-scratch baby food at home.” Despite leaving Yummly, Merea retained the Prep Pad’s related IP including its patented technology and app. So how will Perfect Co use the acquired assets? Automated food tracking, for one.

Mike Wallace, CEO of Perfect Co responded in an email to The Spoon: “As you know we entered the health and nutrition space in 2016 with the launch of Perfect Blend™, which tracks nutrition as the user makes a blended recipe.  Food tracking is the most challenging part of using any diet solution, and we see a huge opportunity in automating this process. The Orange Chef’s patented IoT technology, which not only measures nutrition of the food you prepare, but also records the recipes you make for next time, fits in nicely.”

Perfect Company’s acquisition of the brand makes sense; the company currently offers several different versions of the connected scale and app solution, including one to prepare alcoholic beverages, one to help with blended drinks and another to assist with baking. In a market where several of the popular connected scale hardware brands have abandoned their plans, including Orange Chef and Drop Kitchen, Perfect Co seems to have figured out how to make products that thrive.

Wallace explained, “A lot of Perfect Company’s success can be attributed to the company’s DNA. Prior to entering the connected scale space, the Perfect team had successfully designed, developed and delivered to market multiple technology products in the toy industry (accounting for over $500MM in retail sales)….The ability to execute is also what is propelling Perfect’s next phase of growth.  Having successfully established a retail presence, the company is now aggressively extending its market footprint through partnerships with leading brands.”

We’ll keep an eye out in 2017 to see what becomes of the Prep Pad assets and how Perfect Company leverages them in new product offerings and partnerships.

Q&A With Raised Real’s Santiago Merea

When we broke the news this weekend that Santiago Merea had left Yummly to start a new baby food startup called Raised Real, details were a little scant, so we decided to ask the former Orange Chef CEO a few questions about his new company.

While he is still keeping some of the details of his new company under wraps, we got a few more details about his vision for the startup.

Wolf: What is the idea behind Raised Real?

Merea: We know that parents want to make their own baby food. As a matter of fact, a recent study shows that 1 in 3 parents want to make their own baby food (up from 1 in 10 only 5 years ago) and escape the processed, shelf stable alternatives. But most fail, because it takes so much time and work. We want to make a hard task, easy.

Wolf: Is it a delivery service? Does it have any connected tech?

Merea: Delivery service with a very particular supply chain. No connected tech, but there will be a baby food machine to make things easier. More details to come.

Wolf: Why baby food?

Merea: Baby food is a $55 billion global market with 3% annual growth. However, we are not planning to stop with baby food. For us, it is all about empowering parents and the relationship we build with them. On top of a baby food delivery service we are building a new digital channel that can be used to offer other products and/or services. But first things first, we are starting with the best baby food you can give your baby, the food that you make.