Dive Brief:
- Partake Foods closed a $4.8 million Series A funding round with participation from CircleUp Growth Partners, Jay-Z’s Marcy Venture Partners (MVP), Lotus Bakeries’ corporate venture fund FF2032, Black Capital, Black Star Fund, Once Upon a Farm CEO John Foraker, Seattle Seahawks’ Bobby Wagner and recording artist Rihanna. CircleUp partner Aditi Dash and Beyond Meat Chief Growth Officer Chuck Muth, a current investor, will join the board.
- In a blog post on the funding announcement, Dash cited Partake’s omnichannel appeal, including its online traffic growth and social following. The cookie company also expanded from 200 to 2,700 stores in 2020, and plans to grow to 5,500 outlets by the end of the first quarter of 2021. Retail partners include Target, Whole Foods Market, Sprouts and The Fresh Market.
- With food allergies affecting one in four consumers, allergy-friendly food options have been on the rise. Partake, which offers 10 flavors of cookies as well as a baking mix, appeals to these shoppers as well as those seeking brands that are plant-based, gluten-free, low-sugar and dairy-free. The company produces vegan cookies that are free from the top eight allergens, as well as containing no mustard, sulfite, sesame, artificial flavors, preservatives or GMOs.
Dive Insight:
The increasing severity of allergic reactions to foods containing the most common eight allergens — dairy, soy, eggs, gluten, peanuts, tree nuts, fish and shellfish — and growing consumer awareness of the issue has led to a proliferation of allergy-friendly foods to hit shelves, often with the support of Big Food.
Partake Foods was started in 2016 after Denise Woodard had problems finding snacks for her daughter, who has several food allergies. The company that the former Coca-Cola executive started took a lot of work to get off the ground. Woodard told Food Dive this summer that for years in the beginning, she was just barely scraping by. But interest in the brand and a push by consumers to support Black-owned businesses last year helped Partake get over the hill. The newest round of investors includes both prominent Black funders and celebrities, but also big names in natural and organic food.
Allergy-friendly food, which was once seen as niche, is getting to be big business. A 2019 study found that about 11% of American adults actually have a food allergy. Research last year from Food Allergy Research and Education found that one in four people in the United States — more than 85 million consumers — avoids buying food with one of the top eight allergens or sesame. Spending in this area is $19 billion annually, with an annual growth rate of 27%.
In a blog post describing why CircleUp decided to invest in Partake, Dash said that while allergy-friendly food is becoming more important to consumers, the brand is growing for other reasons. Data gathered by CircleUp’s Helio system, which the group uses to analyze brands, showed only 23% of Partake’s product reviews mention food allergies. Reviewers are also talking about how the products are vegan, healthy and low in sugar — all trendy areas in food today.
Startups like Partake aren’t the only ones seeing the growth potential in allergy-friendly food. Mondelez acquired the Enjoy Life brand in 2015, a maker of snacks free from 14 common allergens. In 2018, Nestlé developed its Toll House Simply Delicious Morsels, which are free of eight allergens. In 2019, Nestlé Health Science took a minority stake in Before Brands, the company behind SpoonfulOne, a product for infants and small children intended to reduce the risk of developing allergies to 16 foods. And last year, Nestlé purchased Aimmune Therapeutics, a biopharmaceutical company that aims to reduce children’s allergic reactions to peanuts.
According to Mordor Intelligence, the global free-from food market is projected to have a compound annual growth rate of 9.5% from 2020 through 2025, driven by interest in dairy-free and gluten-free segments. The popularity of products free from these two major ingredients has encouraged big brands like Mondelez-owned Oreo to dip its toes into the space, and benefit from its allergy-friendly association.
That said, the allergy-friendly space is still new, making up only about 0.5% of the cookie and cracker category, but growing at a rate of 9%, according to Nielsen data from 2018. Partake is an early trailblazer and remains one of a handful of companies dedicated to producing allergy-free cookies. With snacking continuing to serve as a lifeline for consumers during the pandemic, Partake is positioned as a brand that anyone can enjoy, giving it plenty of runway for growth.
