Seth Goldman’s healthy snack startup has raised a chunk of equity funding, in part to support a new snack line for kids to join its plant-based product lineup and, potentially, help triple its revenue.
Eat the Change, which the Honest Tea founder introduced in March 2020 with celebrity chef Spike Mendelsohn, has raised $4.5 million to continue expanding its organic mushroom jerky line and to roll out its new child-tailored Cosmic Carrot Chews across hundreds of retailers, including Whole Foods Mid-Atlantic, MOM’s Organic Market, Erewhon and Hy-Vee, Goldman said in an interview.
The capital builds upon about the $4.9 million the young company has raised thus far, most of it from a round closed one year ago. It also follows another $3.2 million that PLNT Burger — Mendelsohn’s vegan fast-casual restaurant concept under the Eat the Change umbrella — raised in the fourth quarter of 2021, said Goldman, an investor in PLNT Burger.
Eat the Change secured its latest investment from “a very close-knit group” of backers, he said, with the aim of growing more methodically.
“We had turned away more people than we took in,” Goldman said. “My theory on these is you really need to prove the concept, and by that I mean demonstrate that it has traction, demonstrate that it can create positive gross margins and resonate with consumers — and then we can raise more money.
“There are larger opportunities out there that are available, but just because they’re there doesn’t mean you should take them,” he added regarding the raise.
Eat the Change spent 2021 trying to do just that and prove the business case for its mushroom jerky. After some supply chain challenges and a weather issue that affected mushroom growth, “we’re now seeing all of that expansion really accelerate,” Goldman said. That includes landing Publix, and its 1,500 stores, as a new retailer for the product, which now sells in more than 3,000 stores, including Giant Food, Glen’s Garden Market and Dawson’s Market locally.
Still, the jerky product resides in a small market. For the carrot product, Goldman said, “we’re seeing this category having even broader appeal.”
The Cosmic Carrot Chews were inspired by Honest Kids, a kid-friendly line of beverages under the Honest Tea brand that Goldman had founded years ago in an effort to blend nutrition and mass appeal. But it took a few iterations to arrive at the final product. Mendelsohn had conceived a ruffled carrot chip, but the carrots they received weren’t the right shape or size, Mendelsohn told us. “We really didn’t know what to do with them,” he said.
In the spirit of not contributing to food waste, he soaked them in an apple concentrate, threw them in the dehydrator used for the mushroom jerky, and returned the following morning to the test kitchen to find what looked like “carrot raisins,” he said.
“At first glance, I thought it was a failed experiment, but Seth walked into the R&D kitchen. He said, ‘What happened?’ I said, ‘Nothing too great’ and we started popping them in our mouths,” Mendelsohn said. “Sure enough, they were kind of chewy, they had some flavor — they didn’t have the right type of marinade — but it put a lightbulb in our heads.”
They ran with it from there, creating three varieties: Sour Cherry Berry Blast Off, Orange Mango Moonbeam and Apple Cinnamon Asteroid. The cooked carrots are marinated in organic fruit juice before they’re dehydrated. And that process heightens the nutritional value relative to a raw carrot, according to the company.
“This is something that doesn’t exist,” Goldman said, joking that he gets similar reactions to the carrot that he did in the early days of both Honest Tea and Beyond Meat, for which he's also an investor. It’s a new category, he said, competing in the aisles with fruit snacks, “but when you look at the nutritional panel it’s just a totally different comparison.”
This year, the company is focusing on scaling production for both the jerky and carrots and reaching positive gross margins on both, while marketing the product — which was hindered through the pandemic. Mendelsohn also hopes to devise a new product to roll out by year’s end, Goldman said.
PLNT Burger, now with 10 locations, including seven in Greater Washington, expects to open several more stand-alone locations this year. And the organization’s philanthropic arm, Eat the Change Impact, is preparing to award another wave of grants.
It’s all with an eye toward tripling revenue, after hitting its $1 million goal in 2021 and, now, shooting to go beyond $3 million, Goldman said.
“We’ll see what happens,” he said. “But we’re off to a good start. So far, we’re right on track with where we wanted to be.”
