Serenity Kids raises $7m to reach beyond the “elite, crunchy consumer” and expand into mainstream

By Elizabeth Crawford

- Last updated on GMT

Source: Serenity Kids
Source: Serenity Kids

Related tags Baby food

With an infusion of $7m in series A funds, baby food challenger Serenity Kids hopes to prove its high-fat, meat- and vegetable-based purees, grain-free puffs and bone broths “are not just for the elite, crunchy consumer,” by expanding distribution and promotions across the conventional channel, company president and co-founder Joe Carr said.

“We want to dominate conventional the way we have in the natural channel, where we are now the leading brand by velocity in almost all natural stores,”​ and have the second highest revenue in the category in natural behind competitor Happy Baby, Carr told FoodNavigator-USA.

“We have barely scratched the surface on the number of parents that we could be selling to, and so that’s the next step – getting in front of the average mom”​ in mainstream conventional stores, he said.

But to do that, Carr explained, the company needed additional funds beyond the $3m seed round it raised last year to cover increased costs for manufacturing to meet expanded distribution and promotions to drive initial trial – after which he said he is confident parents will not return to other brands.

“Once moms know about us they keep buying us because of the taste and quality of our products,”​ Carr said. “We have data that shows we have the highest customer loyalty on the aisle. And so if we can get them, we can keep them forever.”

To help the brand meet its ambitious goal, CirlceUp Growth Partners led the latest Series A financing round with additional funding from Wild Venture and existing notable investors including Nick Green and Gunnar Lovelace, co-founders of Thrive Market; Melissa Urban, founder and CEO of Whole30; and Ben Greenfield, author and co-founder of Kion. The round also includes new investors such as Jason and Colleen Wachob, married co-founders of mindbodygreen; Joe De Sena, founder of Spartan Race; and Max Lugavere, bestselling author of “Genius Foods.”

The company is already making strides in the conventional channel having recently launched in Kroger, and plans to launch in Target next month and expand distribution in Giant. It also expects to be placed in Publix and already has a strong relationship with Harris Teeter, Carr said.

Promotional strategy focuses on frequent, shallow discounts

As the company expands into the mainstream market, Carr said, it plans to promote its products heavily through more frequent, but shallow discounts.

“We’ve determined that frequent is better than deep because it helps draw attention. So, if we could, we would have a tag on at least one item at all times,”​ he said.

The company also has seen success with digital rebates, which has helped drive discovery online during the pandemic, he said, adding that as consumers return to in-store shopping the company hopes to leverage more in-store displays.

New product development

In addition to expanding distribution, Carr said the company is creating a strong new product pipeline, with a “new form factor beyond puffs and pouches”​ set to launch later this month.

Currently the company offers pureed baby and toddler food in pouches, bone broths in pouches and it recently launched a grain-free puff, which Carr said has done extremely well – especially in the wake of a Congressional report detailing heavy metals in some baby foods, including arsenic in products with rice, which it does not use in any of its products.

“There is so much space in the aisle for innovation and renovation. Basically, the whole aisle is crap! ... There is nothing we would want to feed our kid, except our products. Every form factor is up for reinvention, particularly the rice-based ones,”​ he said.

A path to profitability and exit

While the latest fundraise round was “super, unexpectedly easy,”​ especially after a difficult seed raise during the pandemic, Carr said he hopes it is the last one the company will need before it is profitable and an exit is secured.

He explained that while he and his wife and co-founder Serenity love the business and always dreamed of Serenity Kids becoming a billion-dollar brand with products in every segment of children’s food, they know they need help to make that come true.

“Our long term goal is to have products with strong nutritional profiles that are easy to prepare and shelf stable across the store,”​ but, he said, “we don’t want to be the top executives of a billion-dollar company.”

Rather, he said, long term he wants to educate parents about nutrition and caregiving and his wife Serenity wants to focus on new product development – which can be difficult when also overseeing a fast-growing company.

“So, the plan for now is to kill it in the baby aisle for next few years and then when we are ready be acquired by a company that is interested in building us beyond baby, but which would still keep our culture and our values,”​ Carr said.

“We assume that would be some kind of private equity group, but it could be a strategic, you never know how it is going to work out,”​ Carr said, adding that for now he isn’t too worried about it because they are still enjoying the path they are on and mission they are pursuing.

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