USA – San Francisco Equity Partners (SFEP), is a private equity firm focused on expansion-stage of technology companies, has announced that it has acquired a majority stake in frozen, gluten-free cheese-bread brand Brazi Bites.
The company reported that the terms of the deal were not disclosed but husband and wife founders Junea Rocha and Cameron MacMullin, along with their team of seven employees, will remain with the company.
Rocha told NOSH that Brazi Bites had previously taken funding from angel investors, as well as a smaller strategic round in 2015 from a private food business based in the Northwest.
SFEP, whose portfolio also includes Method Cleaning and San Francisco Salt Company, said it was interested in the frozen category for some time, according to Scott Potter, Managing Partner at SFEP, noting that he believed there was an opportunity to capitalize on the change that was occurring in retail freezer aisles.
“We have a broader thesis around the reinvention of the freezer,” Potter said. “Clearly clean-label, better-for-you has permeated every aisle and every category of the store, with the frozen aisle being the last one to go through through that transformation.
But for the first time, we’re seeing growth in frozen and it’s being led by these better-for-you brands.”
Potter added that the plan for Brazi Bites was threefold, as first, it had to enter new retailers with the existing product line and invest in marketing, demos, social media and sales.
Second, grow the product line with new frozen products and finally in an effort to become a platform brand, expand into new categories with other Latin-American offerings.
But, according to Potter, SFEP doesn’t plan to rush into brand expansion.
NOSH added that an appearance on Shark Tank in 2016 also landed the brand an on-air deal with Lori Greiner, but that investment fell through.
Since appearing on the show, the company has grown to be sold in over 6,000 retailers.
In 2018 it was ranked number 81 on Inc.’s annual list of “America’s Fastest-Growing Private Companies,” with a reported US$8.5 million in revenue.
“The company was hitting an inflection point,” Rocha told NOSH.
“It became apparent to us that we were missing opportunities out in the marketplace and we were just working off of low hanging fruit.”
Rocha and MacMullin will continue to own a “significant” minority share so there is also the potential to have a second exit, or “bite of the apple,” in the future, Potter told NOSH.
“We want to walk that balance of really leaning into growth but at the same time, running a really thoughtful, scrappy, entrepreneurial culture business,” he said.
Part of what has differentiated Brazi Bites from other Latin-American offerings is that though the company is an artisanal product, it has managed to connect with mainstream shoppers both via its traditionally flavored breads as well as with flavors such as three cheese pizza that cater to American palates.
“At the end of the day, it’s cheese bread. It’s unique, it’s South American and it’s traditional, but it’s very approachable.
We’ve seen that it’s easy to understand,” Rocha said. “[It’s also] made in a way that’s innovative and fun. It’s where all those things meet.”