Encore Consumer Capital, a leading private equity firm specializing in investments in leading consumer product companies, has made an undisclosed investment in premium bacon and pork company Tender Belly. Although financial details of the deal were not disclosed, Encore typically makes investments in companies with annual revenues of between $10 million and $100 million.
Founded in Denver, Colorado, in 2010 by brothers Shannon and Erik Duffy, Tender Belly conducts its business adhering to guidelines that it calls “Certified Awesome”. With a passion to become the “purveyors of the finest pork products around”, Tender Belly sources only the best pedigreed pigs in order to ensure confidence in their food supply, their products, and their processes. All of Tender Belly’s pigs are fed a vegetarian diet that is antibiotic-free, and are raised in a crate-free environment to produce meat that has superior marbling. The company’s Signature Dry-Cured bacon is made from the tender bellies of Heritage Breed hogs, and is cherrywood-smoked over a two-week-long process.
“We started Tender Belly to do things the right way, not the easy way, and we’re excited to partner with Encore to continue along that path,” said Shannon Duffy, founder and CEO of Tender Belly. “With Encore’s support, resources and industry expertise, we’ll be able to continue to grow Tender Belly into the leading brand of bacon and pork, while making sure everyone has access to our products.”
The company also announced the addition of two new members to its Board of Directors that bring a wealth of experience from their years as executives in the food industry. Jim Skidmore who formerly led acquisitions and integration for multiple brands to create Coleman Natural Foods, the largest organic and antibiotic-free protein company in the U.S.; and Jeff Swain, the former CEO of both Coleman Natural Foods and Niman Ranch before its sale to Perdue Farms in September 2015.
Protein Plays
Global protein consumption is expected to climb at a compounded annual growth rate (CAGR) of 1.7 percent, reaching 943 million tons by 2054, according to Lux Research.
The deepening of the connection between consumers and their food supply chains, along with a rising popularity of veganism, concerns over animal rights, and awareness around the hormones, antibiotic usage, and unsustainability inherent in the global livestock industry have pushed many people in Western markets to look toward alternative ways to get protein into their diet.
Not to be marginalized, the animal protein sector has seen startups pushing back by seizing market share through premiumization, high levels of traceability, and sustainable animal husbandry practices.
In the final days of May of this year, Seattle-based craft beef startup Crowd Cow announced a successful $8 million Series A led by Madrona Venture Group, with the inclusion of new investors Ashton Kutcher, and Guy Oseary’s Sound Ventures, and the return of existing investor Joe Montana’s Liquid 2 Ventures.
Launched in 2015 by Joe Heitzeberg and Ethan Lowry, Crowd Cow offers a curated ranch-to-table experience and unprecedented traceability and transparency for beef buyers. Through partnering with family farms and ranches, the business allows buyers to select their specific cow and cuts of meat to be delivered to their home along with the story of the farm where the cow was raised.
“By combining transparency with a great consumer experience, they are building a company and brand that has the power to transform not only the lives of their consumers, but of their suppliers,” said Scott Jacobson, managing director, Madrona Venture Group.
Another is Porter Road. Founded in Tennessee by chefs and butchers Chris Carter and James Peisker, and backed by some of the top venture firms in the food space, including Slow Ventures, BoxGroup, Tribeca Venture Partners, and Max Ventures, Tech Crunch reports that the company closed on a funding round of $3.7 million in early May in support of its similar business model. Working with local farmers, Port Road sources meat that meets the highest standards from livestock that is raised outside, are fed vegetarian diets of non-GMO feed, and are attentively raised. Its meat is hand-cut in its Kentucky facility, and is dry aged for 14 days to improve flavor.
In light of shifting consumer demands, this business model is catching the attention of consumer product investors, such as Encore. Based in San Francisco, Encore is currently investing from its $260 million third fund, after raising a total $600 million in equity capital and having invested in more than 25 companies in the sector, including Ancient Harvest, Brownie Brittle, Isopure, and Navitas Organics.
“We are thrilled to have the opportunity to partner with Shannon and Erik to grow Tender Belly,” said Robert Brown, managing director, Encore Consumer Capital. “We have great confidence that the entire team will grow Tender Belly to become the leading premium bacon offering in grocery stores and restaurants across the country.”
-Lynda Kiernan