Bizzy Coffee announced last week it raised $7.1 million as it launches a national expansion that will triple its retail footprint.
The Brooklyn Center-based manufacturer of cold-brew coffee has already shown 400% year-over-year growth in retail and is now partnering with Target Corp., Publix Supermarkets and Kroger Co.
The funding round was led by Dallas-based Sidekick Partners, a previous investor in brands such as Halo Top ice cream. Other investors included New York-based Gaingels, Chicago-based Bluestein Ventures and existing investors including Minneapolis-based Bread & Butter Ventures.
Alex French, Bizzy co-founder and CEO, said the funding was largely debt-based and will be used to finance manufacturing equipment used in the labor-intensive production process. The company’s expansion will also be supported by a new state-of-the-art manufacturing facility capable of producing 25 million units per year.
French said the location hasn’t been finalized, but it will be somewhere in the Twin Cities and occupy at least 50,000 square feet.
Bizzy got off the ground in 2015 and found early success selling on Amazon. Then, the pandemic tripled the company’s retail sales as coffee drinkers found themselves brewing from home.
The company is also riding a wave that has younger consumers favoring refrigerated coffee. (Starbucks Coffee Co. CEO Kevin Johnson told investors last year 74% of the chain’s sales came from cold drinks.)
French said the refrigerated category grew 42% between 2020 and 2021 and is on the path to becoming a $5 billion industry.
“I think it's the future of coffee,” French said, comparing the current market to the yogurt land grab in the early-2000s or current trends towards plant-based meat.
“The difference is that it seems really easy to make cold brew, but it’s also very hard to make cold brew at scale,” he said.
The brand has differentiated itself in a crowded field by putting quality ahead of cutting corners.
“It’s like having fresh sushi,” French said. “It’s just better. And better costs more.”
Because Bizzy steeps its cold brew for 18 hours, its manufacturing process is more like distilling spirits or brewing beer than to normal coffee. French added that another challenge the company faces is the sheer act of moving its raw materials around.
“It’s like sand. You’re moving tens of thousands of pounds of sand in and out of small holes, making sure it doesn’t get into the product,” he said. “It’s very easy to do in your kitchen, but extremely difficult to do when you’re trying to make millions of units.”
