To feed an appetite to double customers, Denver-based co-packing startup Natural Food Works has raised $2 million.
Natural Food Works, which specializes in foods marketed as natural or organic, aims to double its customers over the next two years.
“It’s really all about accelerating our business and that means, as you bring in new customers, it requires working capital,” said co-founder Robb Caseria. “And quite frankly, as our existing brands get bigger it requires more working capital, too.”
That means more money for ingredients, equipment packaging, staff and getting facilities certified for criteria like being nut-free or gluten-free, Caseria said.
Natural Food Works disclosed its raise in an SEC filing Nov. 1. Past filings show the business has raised between $3.1 million and $8.59 million to date.
Caseria, a veteran of food brands including Coors Brewing Co. and Frito Lay, teamed up with Fresca Foods founder Richard Lappen in 2013 to start Natural Food Works. Initial investors included Ross Shell, CEO of Boulder-based Red Idea Partners.
Caseria said a food brand typically will work with different packers for different sizes or different products. And the brands usually buy ingredients for the co-packer to use.
Natural Food Works’ target customer is big enough to leave behind a shared kitchen, but small enough that it only needs to make product a few days a week. They might have as few as five employees and short ingredient orders – making it more expensive to produce sauces, cereals or snacks.
Natural Food Works does a bit more than traditional co-packers. It buys ingredients on behalf of customers, makes the products on its equipment, tests for quality and then packages it.
Customers pay a premium compared to co-packers that don’t include those services, Caseria said, but Natural Food Works can afford more efficient equipment and can place bulk orders far larger than their customers could.
The company has 70 employees, most working full time out of three co-packing facilities: two in Denver and one in Louisville. The largest is 28,000 square feet.
Caseria thinks of the food in terms of the equipment used to make it: Cereals, muesli and granola are in one category, snack bars in another, savory snacks like sunflower seeds and popcorn in a third category, and sauces and salsas in a fourth.
The co-packer also does high-pressure processing, which improves shelf life in foods without adding preservatives.