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Daily news and analysis about the food tech revolution

Raised Real

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. 

Newcomers Try to Innovate and Deliver on the Lucrative Baby-Food Market

Baby food is big business. While it might not be an industry ripe for innovation, several startups feel they have the magic formula to grab marketshare and mindshare.

One of the latest to enter the fray is Little Spoon, a San Francisco baby food manufacturer and delivery company in its early “invite” stage.  The company believes it can provide our little ones with healthier meals offered with great convenience. According to Statista, the baby food market in the United States has more than seven billion in annual sales. To date, a few newcomers such as Caer (now Yumi) and Gather have tried and failed, or been forced to rebrand.

The biggest challenge to break into the baby food market is competing with giants, such as Gerber, as well as a growing number of organic brands. Many new baby food meal kit ventures, even with offering delivery, have yet to successfully crack the baby food market.

Little Spoon co-founder Michelle Muller does have a new angle which she believes will give her company a real shot at success. Little Spoon uses a technology known as HPP (High Pressure Processing) which is a cold pasteurization process that improves shelf life, while allowing the food to retain its natural nutritional value.

“Modern parents have been forced to choose between two options when it came to feeding their children: Either they can spend hours a day cooking fresh baby food themselves or they can buy highly processed, in-store options that are filled with sugar, low in nutrition, and in many cases are older than the baby eating it,” Muller told tech publication Snapmunk.

She continued, “It is crazy to us that parents have to make the tradeoff between their baby’s nutrition and their own time and sanity. Using the latest in HPP technology, we change all this by making fresh and homemade baby food available anywhere in the nation, direct to your door, and at an affordable cost.”

Little Spoon - Organic baby food, delivered.

In most ways, the Little Spoon service is similar to other subscription meal delivery providers. Choices range from one meal per day at $4.99 per meal through a three-a-day plan at $3.99 per. Customization includes selecting a child’s preferences such as flavor and texture. The company currently is accepting customer invites, with no start date set for delivery.

Even though the landscape is riddled with failures, Little Spoon is not alone in sensing opportunity in the baby food space. Thistle already is in market with traditional meal kits but has expanded to include Thistle Baby--prepackaged baby food meal kits. The difference for this San Francisco Company is that the meals are plant based and come flash frozen to customers in California and Nevada. Also a subscription service, the meals currently cost $2.15/each or $45 per box, including free local or overnight delivery. Each box includes enough food for 21 meals or one week’s worth of food.

Similar to Little Spoon, Chicago’s Nurture Life uses a process called MAP (modified atmospheric packaging) which allows food to stay cold and fresh without freezing.  The company says it sources locally whenever possible and also emphasizes organic ingredients. Nurture Life states that it uses a team of chefs skilled in appealing and customizing meals to meet a wide variety of young diets. The subscription plans offer food for babies up through 18-year-olds. An eight-meal-a-week plan for a baby is $45, while a 14-week plan clocks in at $75.

Then there is Raised Real, a startup by Orange Chef cofounder Santiago Merea (see our interview with Merea here). Raised Real, which offers subscription meal kits with raw ingredients, has its own baby food machine called the Meal Maker that steams, blends and purees the raw ingredients into finished baby food. The Meal Maker comes complimentary with a biweekly or monthly subscription plan or can be purchased for $99. A monthly plan runs $180, or $4.50 per meal.

The Year in Food Delivery

Despite a distinct cooling off of investment in the food delivery space this year, some big names like Uber, Google, and David Chang threw their hats in the ring.

That’s because the online food delivery market is estimated around $210 billion, with companies like FreshDirect raising $189 million in the past 12 months. It’s become such a pervasive part of our way of life that Google even added a food-delivery shortcut to Maps. And there are plenty of food-delivery crowdfunding projects to go around.

But enough with the numbers. Here are the highlights in this space over the past 12 months.

More Big Players Joined the Party

This year everyone wanted a piece of the pie. Google started to ship fresh food to customers in California through Google Express. Instacart and the Food Network launched a meal-kit delivery service, and Square acquired startup Maine Line Delivery in Philadelphia to boost Caviar. Meanwhile Facebook and Foursquare made it easier to order food from within their apps through Delivery.com.

NYC darling chef David Chang decided to blow up the entire idea of a nice restaurant by launching Ando, a restaurant that only does deliveries, and he raised the bar on delivery food everywhere by launching Maple, his own delivery service that promises a daily delicious menu.

Plus, where would the year be without a few gimmicks? Taco Bell and Whole Foods both came up with ChatBots that help you order food or suggest recipes, respectively, solely through the power of emojis. And Domino’s will now let you order pizza with one tap on your Apple Watch.

The Year of UberEats

So far I haven’t mentioned the biggest player, though: Uber. The company has had quite the year in food delivery. It shut down Instant Delivery in New York City, then launched UberEats in both the U.S. and London. Next UberEats drivers staged protests over the way the pay structure has been changed, and in November a courier filed a lawsuit against the company for missing food delivery tips. Yikes.

All of this commotion from big names and turmoil within UberEats suggest that the food delivery space is still young enough that no one has solved some of the primary problems within it. Companies are grabbing on to any stronghold they see (emojis! self-driving trucks! drones! more drones!), without regard to the longevity of the solution. Uber has faced the brunt of this fast-paced growth, but we expect to see more struggles in the coming years for other players as well.

Eat Local

This year the quest to eat healthily expanded even more into food delivery. Whole Foods hinted at a “meal solution spectrum” with some sort of delivery component in the future. Good Eggs, which many thought was defunct by this point, rose from the ashes with a $15 million round of funding to help it deliver local, quality food.

And Amazon, never one to be shown up, expanded its Amazon Fresh program to Boston, among other major cities. The difference here is that Boston customers can shop from local markets, a feature that we imagine will be implemented elsewhere if it’s successful in Beantown.

You Say Potato, I Say Share Economy

In such a young and moneyed space, different business models are flying around faster than those drones I mentioned earlier.

Some want to deliver fresh ingredients to customers to help simplify cooking at home. Juicero, for example, delivers prepackaged ingredients for green juice, made in its blender that doesn’t even require cleaning. Similarly, Raised Real wants to deliver ingredients for homemade baby food, thereby making it that much easier to make your baby’s food from scratch (sounds ambitious to me).

Speaking of raising babies and tapping new markets, Drizly raised $15 million for its liquor delivery service, among other parts of its ecommerce model. And DoorDash added alcohol to its food delivery options in California (what about the rest of us?!).

Meanwhile Foodhini calls itself a “for profit social enterprise” and delivers ethnic food made by immigrant chefs: Foodhini and the chefs each receive $2.50 from each meal, after costs.

And BringMe wants to out-Uber Uber by combining delivery with the share economy in Fairfax, VA, enlisting regular folks to deliver food as “bringers.” There are already a few models out there like this, such as Favor in Texas and Tennessee, and we expect to see more too.

Of course, while all of these business models are innovative and interesting, none of them beat the ultimate and original delivery food: pizza.

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.

Yummly CRO Merea Leaves To Launch Baby Food Startup

At last year’s Smart Kitchen Summit, Santiago Merea found a suitor for his struggling startup Orange Chef. A week after this year’s Summit, he’s left to start a new startup focused on reinventing baby food.

According to Merea’s Linkedin profile, he’s left Yummly, the company where he was Chief Revenue Officer and which had acquired his former startup. His new job? The founder of Raised Real, a company which, according to its Linkedin description, aims to re-invent “the process of making baby food at home.”

What does that mean? It’s too soon to tell, but what I can glean from the company’s website is that it will offer an ingredient delivery service and 10-minute prep time for fresh-from-scratch baby food at home.

What’s unclear is if the at-home food assembly it will involve any home or kitchen technology. Given that Merea retained the rights to his Prep Pad, I’m intrigued to see if he applies any of the Orange Chef intellectual property towards baby food.

I’ve reached out to Merea and will update this post with info once I have it.