Portland cocoa bar maker Honey Mama’s raised $4.5 million from a San Francisco investor to help the company boost distribution, sales and marketing.
The capital is from Amberstone Ventures, a firm that specializes in food and consumer product companies. The capital is part of a Series A round that totals $5.8 million. The round also includes $1.1 million in convertible notes and other investments the company has raised over the last 16 months.
Honey Mama’s started in 2013 by entrepreneur Christy Goldsby. The company makes honey-cocoa bars that are designed to taste good while also being nutritious. It grew out of Goldsby’s desire to have a sweet treat that was also compatible with her food-allergy restricted diet.
The company’s bars have four core ingredients: raw honey, unrefined coconut oil, cocoa powder, Himalayan pink salt. Also included among the bar's nine flavors are sprouted almonds, shredded coconut or sesame seeds. Products, which are refrigerated, are sold in 2,200 stores nationwide and locally at Market of Choice, New Seasons and Whole Foods. The company manufactured 2.5 million bars last year.
Securing this funding is the next step for the growth plan that Goldsby initial set when she started the company. She has closely followed those plans, which included handing over the CEO role in 2018 Jared Schwartz.
“I saw him as the business partner I needed,” she said. “The growth of the business was feeling more out of my skillset. That is so much how we built this company. It’s so much about people in the right position and doing the right thing.”
Goldsby, who previously co-founded and ran the bakery Blue Gardenia, now handles brand, marketing and innovation at Honey Mama’s. Schwartz previously ran business development for Bitterman Salt Co.
Goldsby and Schwartz have been building relationships with investors for the last 18 months. That work grew in importance this year when the Covid-19 pandemic upended the economy. Schwartz started having meetings in January with 18 different investors ranging from private equity to venture to family offices, he said. He intended to pick a partner and start due diligence at the large food industry conference Expo West, which was slated for March 2-6.
The event was canceled as Covid-19 took hold in the U.S.
“For us, (that change of plans) provided an opportunity to test relationships,” he said, and ultimately Amberstone was selected.
What set the investor apart was the commitment they showed in understanding that in the short term there would be dislocation and consumer changes due to the pandemic, but in the long term they saw the opportunity in the Honey Mama’s brand, Schwartz said.
“That speaks volumes,” he added.
According to Amberstone's website this is the second Portland investment for the firm. It has also backed outdoor blanket maker Rumpl.
The investor was drawn to Honey Mama's based on the team that Goldsby and Schwartz built and the strength of the product.
"We were also blown away by the reach and consumer resonance of the brand, and how it performs on shelf relative to the category," said Amberstone Managing Partner Alex Bernstein in a written statement. "It is drawing people to the refrigerated bar set and is driving sales not just in natural, but in conventional grocery as well."
This capital will be used by Honey Mama's to hire in sales and marketing and for manufacturing investment. The company makes its own products and does not use a contract manufacturer. Production happens in a 12,000-square-foot facility on North Williams Avenue near the Moda Center. Operations offices are located across the street. The company has 35 total employees.
Goldsby and Schwartz want to expand distribution as well. The company is in mostly regional chains or natural food stores. They want it to be on more mass market shelves and build a brand that is a national consumer packaged goods player.
“We want to be part of the mainstream consideration for confectionary,” Schwartz said. “We have the opportunity to empower and change the food conversation around sweets and indulgence.”