Serenity Kids raises $3 million to become a leading baby food company
Texas-based baby food company Serenity Kids has raised a $3 million investment led by Birch Benders co-founders Lizzi Ackerman and Matt LaCasse after seeing revenue triple in 2020 to $9 million.
Other investors participating in this round include KetoConnect founders Megha Barot and Matt Gaedke, wellness influencer Rachel Mansfield and a number of existing Serenity Kids investors, who contributed to the previous launch round of $1.5 million from the company in 2019.
Serenity and Joe Carr, the couple who started the business the same day their daughter Della was born, expect the funding to fuel Serenity Kids’ rapid expansion into more major retailers across the United States. United, is helping it hire more employees and develop new products beyond its current three lines – toddler purees with bone broth, ethically sourced meats and tasty vegetables – all of which come in sachets.
In particular, two new “form factors” that are already in the works to target children over 16 months will be launched in the market in the first quarter of 2021, with two additional products expected to be rolled out over the following year, according to Serenity Kids.
The duo recently told me it’s been the “longest investment cycle ever” since the fundraising process began over a year ago, in part because the confidence of many CPG investors was deflated by COVID-19 at the start of the pandemic.
“I closed our first investment round in three months, so I was a little spoiled by how easy it was to raise funds,” said Joe Carr, noting that Serenity Kids had to cut back considerably. its operating costs and obtain government loans this year before meeting. investments gradually.
He said, “We kept fundraising all year, so $100,000 here, $50,000 there, like a net just enough to float us around,” until a big sum money became available when Ackerman and LaCasse, who feed their children Serenity Kids products, sold their baking mix business to Sovos Brands in October.
Organic vegetables and ethical meat
The success of Serenity Kids was surprising in many ways as the couple initially only wanted to create a niche product in a category that has seen stagnant sales in recent years.
Market analysts previously noted that sales of baby food pouches in particular fell 0.8% last year due to falling birth rates in the United States, a few brands, such as Once Upon a Farm and Cerebelly, leading growth.
Yet the duo quickly realized that most products on the shelves, even those labeled organic, still contain nine grams of sugar on average with very little fat or meat, essential for the development of the spine. and babies’ brains.
“We looked at the baby food department and used a virtual assistant to put 265 products into a spreadsheet, and [it was] almost impossible to find anything that isn’t sweetened with fruit,” Serenity Carr told me. “It was weird because the USDA suggests 30 grams of fat and 12 grams of protein meat. [for babies], and sugar should be avoided.
As well as using organic ingredients, Serenity Kids manufactures all of its products in large pressure cookers before pumping them into pouches which will then be steamed on an autoclave machine to ensure pathogens and bacteria are removed. killed, and that their products are stable.
The company has also onboarded several CPG experts as advisers, including Taylor Collins, who founded protein snack company EPIC Provisions which was acquired by General Mills.
Joe Carr notes that Collins not only provided brand and supply chain management expertise to Serenity Kids Meat Packets, but also believed in their company’s mission from the start.
“Taylor was like ‘this is huge, and may be way bigger than anyone imagines,'” Carr said, adding that Serenity Kids had tripled its revenue as Collins had originally anticipated, and is on the right track. on track to reach $21 million next year.
Manage growing pains
However, the meteoric growth of Serenity Kids has brought several challenges, especially when it comes to managing their employees and creating a culture that can help the company scale in the long term.
The couple said they hired seven people in just a few weeks to bring the total number of employees to 25, with “a few new hires on the horizon”, including some management positions.
“These are significant costs and investments, like formalizing our recruiting process, using some headhunting services, and just trying to find the right people and get them to move to Austin,” said Serenity Carr. “We know our 2021 plan is aggressive, so we want to prepare for success now.”
The company has also centralized its management by integrating all its activities into the Trello system.
Carr added that while Serenity Kids’ retail business has fallen since April, its e-commerce business has “exploded” and the company plans to continue investing in improving online content and upgrading its website in the future.
“One of the things I’m really grateful for is that we have a product that’s easy to sell online. It’s quite light so it’s easy to ship. Some of the choices we made early on were tough and [they] cost us money and time, but they are good investments,” Carr said. “Moving forward, we want to be a billion-dollar kids’ food brand when we launch nationwide in Whole Foods.”