Hooray aims to bring home the (alt) bacon
Plant-based protein maker Hooray Foods has inked distribution deals with three big grocery chains, bringing its plant-based bacon to the aisles of more than a thousand stores.
Why it matters: While VCs have dialed back funding in the food tech sector, founder Sri Artham is betting that Hooray’s presence on grocers’ shelves (and eventually on restaurant menus) will drive more demand for the alternative meat and more dollars.
What's happening: The alternative bacon will soon be found in more than 100 locations, under the Raley's, Bel Air and Nob Hill Foods banners in Northern California and Nevada.
- Consumers in the San Francisco Bay Area and Los Angeles will have access to the food through sustainability-focused delivery startup Good Eggs.
- A couple dozen Big Y stores in Massachusetts and Connecticut will also house the brand.
Catch up fast: Founded in 2019, Hooray began selling directly to restaurants à la the Impossible Foods path, Artham tells Axios. But when the pandemic hit, it pivoted to selling directly to consumers through groceries.
- The company’s bacon has been at Whole Foods locations nationwide since November 2020.
- With the new partnerships, it will add 30% to 40% to its retail footprint, Artham says.
- Hooray Foods netted $2.7 million in an extension seed round last fall. It has raised $7.1 million to date.
What they’re saying: Artham admits the company sits in a difficult fundraising environment due to the choppy markets and new investors are reluctant to sign on.
- Hooray looked at raising $10 million-$15 million in Series A funds earlier this year but pulled back those plans due to market timing, he says.
- The company subsequently turned to existing investors.
- “We're raising a smaller bridge that gets us a few more months of runway, ideally to the end of the year,” Artham says, and he’s cautiously optimistic the capital markets may improve by then.
- VC Evolution Partners, Gaingels, Sand Hill Angels and AirAngels sit at Hooray's cap table.
Of note: The first quarter saw venture funding in the food tech industry drop 41% from the fourth quarter of 2021, according to PitchBook data.
- “The slowdown in plant-based protein investments is not due to decreasing interest in the sector, but rather symptomatic of a wider drop in food tech-related deals,” PitchBook notes.
Context: Budget-conscious consumers have begun pulling back on purchasing alternative meats due in part to its higher price point compared with its animal-based counterparts. (See Beyond Meat’s dismal Q2 results.)
- But there’s a silver lining in today’s macroeconomic environment as pork prices have gone up in the past two years, Artham says.
- “As a result, we’re actually getting pretty close to price parity” with real bacon.
What we’re watching: The company said it's dipping its toe back into restaurants.
- Hooray will target smaller to midsized chains that already sell plant-based burgers in metros where eating healthy and vegan food is the trend (NYC, LA, the Bay Area).
What’s next: The faux bacon, which is made from allergy-friendly ingredients that emulate the texture and flavor of the real thing, is getting a makeover as well.
- Artham says the company has tweaked the formula for its “bacon 1.0” to have lower salt content, lower fat, and is “healthier, more delicious.”
- Hooray plans to phase out the prior bacon and get its existing customers to switch to the new one, which he says, has already gained some traction in its first few weeks.
- Hooray has new products in the pipeline as well. While he declined to get into specifics, Artham says the new items will deploy the same technology as its bacon, especially with that sizzle factor.
The bottom line: Artham says the company will continue to look for more ways to streamline its manufacturing so that it can keep prices low.
- He hopes to give consumers a healthier, cheaper [plant-based] bacon — “by the way, it saves the planet,” he adds.