CircleUp has also backed other upstart food and nutrition companies, including snack brands The Good Crisp Company and Barnana. Both CircleUp and Encore are based in San Francisco, California (home to 4505) and focus on CPG companies.
4505’s owner Ryan Farr, a chef who also runs a whole animal butchery and restaurant in the city, told BakeryandSnacks the firms’ proximity definitely played into the investor pursuit.
“That’s kind of what we wanted for our second phase of growth – to help us think outside of our current box,” he said, describing Encore as ‘really hands-on.’
“It’s very important to give a lot of focus and attention to the folks that have supported us up until this point, as much as we’d like to grow our door count.”
The funding, precise terms of which were not disclosed, will also provide a backbone for new flavors, Farr said.
Buzzwords and good taste
CircleUp invested in 4505 two years ago after meeting Farr at Natural Products Expo West.
Ben Lee, CircleUp’s managing director, said his partners immediately noticed the ‘superior nutrition profile’ of Farr’s better-for-you chicharrones.
With 9g of protein, 4505 chicharrones are keto-friendly, sugar-free and made with humanely sourced pork produced without antibiotics or hormones. Though the snack came first, having a butchery and restaurant allows Farr to upcycle parts of the animal that might otherwise go to waste.
Lee agreed the sustainability factor was a major reason for CircleUp’s investment.
“Consumers are paying more attention than ever not only to the nutrition labels and ingredient decks, but also how their products came to be,” he told this site.
“No one took a refreshing look at the pork rind category to bring new consumers into the category. 4505 did just that through all natural ingredients and a premium brand.”
Farr’s background as a chef was ‘perfect’ for this extension, Lee added.
“He created a product people actually wanted [and] had proof points of that by selling them through restaurants. Being a chef also helps the consumer understand that this is a premium, all natural product produced in the right way.”
Farr, a native of Kansas City, started selling chicharrones a decade ago at farmers markets, then expanded to boutique markets and bars. He opened 4505 Burgers & BBQ in 2014, which led to him authoring two books on whole animal butchery.
The snack brand took off in 2017, thanks in part to strong support from Whole Foods, he told us, and the honing of the product’s recipe and the brand’s message to differentiate it from other brands or the bodega variety often found in Hispanic markets.
“[Chicharrones] had a bad rap and folks think it’s not healthy or it doesn’t taste good, but ours actually does,” he said.
“We’ve been around for a while, but it’s just now – for diet and lifestyle changes, and folks just really wanting to have a delicious snack that’s not going to weigh them down – that the beautiful pork rind is having its day.”
He attributes the shift in consumer perception to influential restaurant trends.
In taking the product from farmers market to CPG, 4505 explored flavors that consumers crave.
“We try to make all major decisions with our belly first,” said Farr.
The portfolio started with the classic flavor of chili and salt, and now includes cheddar jalapeno and a barbeque based on the restaurant’s rub for smoked ribs.
‘Just the beginning’
CircleUp’s Lee sees the chicharrones category as one poised for growth, as consumers continue to seek snacks with less sugar, fewer carbs and short ingredient lists.
According to Nielsen, sales of meat snacks jumped 7% in 2017, and the category has reached nearly $3bn in annual sales. Potato chips, by comparison, are a $7bn category.
A 2.5oz bag of 4505 chicharrones sell for an RRP of $3.99 at more than 1,000 retail locations across the US, including Safeway, Albertson’s, Kroger, Sprouts and Costco.