Cocoa bar maker Honey Mama’s raised $8.7 million from new and existing investors that the team intends to use to further expand the Portland company’s grocery reach.
Honey Mama’s makes sweet bars that are compatible with a range of food allergies or other dietary restrictions. It was founded by Christy Goldsby, who is chairman and president of the company. The products don’t have preservatives or shelf stabilizers so they are found on refrigerated shelves.
This newest funding round was led by Southern California-based Irresistible Food Group, said CEO Jared Schwartz. Existing investors Amberstone Ventures and Oregon Venture Fund also came back for this round.
“It was a pretty positive process,” said Schwartz, about fundraising amid the current challenging environment. “We engaged Irresistible Food about two years ago and started building a relationship.”
Initially IFG participated in a small convertible note that Honey Mama’s completed previously. That led to IFG watching the company more closely, and by the time talk of a Series B round started they wanted to lead it, Schwartz said.
“They believe in our product and what we are trying to do and our management team,” he said.
With this funding, the company plans to push further into the conventional grocery store market. Right now, the brand has a strong position in the natural food space, said Schwartz. He noted the brand is the No. 2 ready-to-eat “indulgence” product nationally at Whole Foods. Products are available at 6,500 stores across the country including locally at New Seasons, Market of Choice, Barbur World Foods and Zupan’s Market.
Part of this store expansion strategy includes two new product launches. Both were unveiled last week at the Natural Products Expo West trade show in Anaheim, California. One is a smaller version of their bars called Treats. Treats are a 1-ounce bar sold for $2.49 versus regular bars that are 2.5 ounces at a $5.99.
The other product is a new flavor profile of chocolate and peanut butter. All the products continue to be on refrigerated shelves.
“As we expand we realized the product is unique and a category creator in the refrigerated chocolate space. We want to bring forward flavors people are used to,” he said. “We want (to be) new in the known.”
The round’s lead investor, IFG, is the investing arm of the company behind King’s Hawaiian Bakery, which is still a family-owned company. Schwartz and the team see the IFG crew as an important strategic investor.
“I think they are really unique in the space where they aren’t traditional VC or private equity,” said Schwartz. “They spent a couple decades building one of the country’s more beloved brands. They have a tremendous level of expertise to bring to Honey Mama’s. As we grow and set our sights on broader expansion we value that expertise.”
The company, which has 45 employees, has a production facility on North Williams Avenue. Schwartz expects the facility, along with administration offices in the Leftbank Annex, to sustain the company at least for the next couple years.
The team, he said, is committed to staying in Central Portland.
“We’ve had struggles in the neighborhood with safety but it says on our packaging “Made in Portland, Oregon,” and we are proud of that and want to be a part of the fabric moving forward,” he said.
