A Louisville-area hemp company has raised about $4.5 million in capital to expand its production capacity — and no, it's not making CBD.
Victory Hemp Foods, a business-to-business food ingredient processing company, is using this fundraising round to grow capacity at its production facility in Carrollton, Kentucky, and expand contracts with the farmers that supply its raw material needs. The company, which has labs and offices at the One Innovation Center in Louisville, produces hemp seed oil and hemp protein, in addition to roasted and shelled hemp seeds, used in plant-based protein offerings.
Chad Rosen, founder and CEO of Victory Hemp Foods, told me he came to the Bluegrass State to launch his company after the passing of the 2014 Farm Bill, which authorized state departments of agriculture in states that have legalized hemp, including Kentucky, to develop pilot programs for industrial hemp research.
"I was fully aware of what the hemp legislation meant for agriculture. Setting aside all the hype and hubbub around the cannabinoids from the medicinal part of the plant, the food and the fiber aspect of the of the hemp plant have enormous implications," Rosen said. "I was sitting in California, going through the SWOT analysis [Strengths, Weaknesses, Opportunities and Threats] of where to build a business, and there were basically four states where it was legal: Colorado, Oregon, Kentucky and Vermont."
Rosen, whose background is in manufacturing and sustainable materials, ultimately chose Kentucky because he knew there's be a great appetite from a supply chain standpoint, in addition to the commonwealth being a historical leader in growing hemp.
Through months of research and analysis, Rosen and his colleague Dr. Jagannadh Satyavolu were able to develop a concentrated hemp protein, up to 75% concentrate, and a clarified oil.
"I sent those samples out to some of the major meat-analogue companies that are making the burgers that don't bleed from plants instead of animals," Rosen said. "I realized the future of the business was to supply these food brands that are changing the way we eat with a sustainable, scalable, good-tasting, highly-nutritious substrate for all their foods in the form of protein powder."
Rosen said they have spent 30 months in a lab developing a scalable process funded primarily through friends and family to get to this point. Victory Hemp Foods has file patents on its process and is currently engaged in trials with some of the largest plant-based food manufacturers in the world, from El Segundo to Switzerland.
The company has received $230,000 from the Governor's office of Agricultural Policy in low interest loans, two equity investments from the Kentucky Enterprise Fund, and has 45 angel investors, 10 of which are local. Rosen said he seeks out mission-aligned capital in an effort to keep the company growing in the right direction.
"What we're doing really relates to regenerative agriculture, building soil, the health and wellness of our customers, and so all those things and just the vast impact of what we're trying to do — it's going to be a long window for development," he said. "As our planet gets hotter and animal agriculture becomes more and more challenged, we're going to need new and better sources of plant proteins to attract more flexitarians to diversify their diets away from animal proteins. It's really about figuring out how to feed 10 billion people on the planet by 2050."
Rosen has already identified the need for additional capital. There's about $700,000 left in this current fundraising round, and Victory Hemp Foods plans to launch a Series B sometime in September.
