Retail

Urban Remedy Kiosk Expansion Plans Land $17M In VC Funding

Urban Remedy

It’s not uncommon for food producers at Whole Foods to promote their products through in-store demos or catchy product designs. But one California company has taken a slightly different approach to marketing their products at the popular grocer — they’re stocking kiosks, not shelves.

Urban Remedy has 30 branded refrigerated kiosks in Whole Foods stores across California. Each kiosk comes stocked with between 20 and 30 unprocessed, nutrient-rich items, including packaged meals, beverages and snacks.

They’ve worked well in propelling organic, fresh food company Urban Remedy. While the business as a whole saw 100 percent growth, its kiosks channel saw a whopping 350 percent growth over the same time period. And the company is not done expanding — it plans to find one or two new partners for the fresh kiosks in the San Francisco Bay area, according to Inc.

Kiosks are on the rise as food producers start stocking all sorts of goods inside them, including perishable food. Even food products that cost several times more than Urban Remedy’s typical fare have made the cut — like caviar, for example, according to PYMNTS Unattended Retail tracker.

For Urban Remedy, the machines keep perishable health-conscious packaged foods cool — with a product line that includes foods from purple potato salad to spicy Thai noodles — as well as juices like Slender Greens, so keeping food at the right temperature is key for the company.

In reality, Urban Remedy is not just in the juice or prepared food business — it’s in both. And its natural way of doing things sets it apart from the competition. “I can’t think of many companies doing fresh, clean and convenient and doing all three of those things together well,” Paul Coletta, CEO of Urban Remedy, told Inc.

Beyond kiosks, Urban Remedy has a brick-and-mortar strategy in place, with retail locations in the San Francisco Bay area that sell 75 to 100 pre-prepared items, in addition to a website.

 

Venture Capital Investment

With its rising success, Urban Remedy has attracted the attention of General Mills’ venture arm, 301 Inc., which led a funding round for the company that was announced on Jan. 17. Through the round, which was reported last week, Urban Remedy raised $17 million for its platform. Previous funding rounds in 2014 and 2012 have brought the company $5 million and $1 million respectively, according to Crunchbase.

301 sees the investment as a way to tap into a demand for wholesome, fresh foods — and it’s in line with investments the firm has made in products like, say, gazpacho.

“This [investment] is a continuation of a strategy that we’ve been on for a long time, and that is, consumers are looking for fresh, closer to source, closer to whole foods. They are continually redefining health and healthful eating experiences,” John Haugen, VP and general manager of 301, told NOSH. “When you look at this [deal] and overlay our current strategy, it checks all the boxes in our investment thesis.”

Urban Remedy fits the 301 investment mold — and follows the firm’s investment in Austin, Texas-based health and vegetable food company Rhythm Superfoods. The fund invested $6 million in the company, whose kale chips, beet chips and broccoli bites appear in retailers nationwide, including Whole Foods, Starbucks, Kroger, Publix and others.

Startup food producers like Rhythm and Urban are General Mills’s effort to combat a slump in the consumer packaged goods industry. The company, which is known for some not-entirely-healthy consumer staples like Pillsbury and Häagen-Dazs ice cream, is turning over a new leaf to focus on healthy and trendy options to grow its business.

 

The Future

Where might Urban Remedy put some of that venture capital cash? It plans to add kiosks — 60 to new Whole Foods locations, in addition to other partners.

But its CEO plans to cautiously approach the eCommerce side of the business, which he needs to know will be profitable before he further focuses in on that channel.

“We’re going to grow really responsibly from here,” Coletta told BevNet. He added that Urban Remedy has been slower to scale its eCommerce platform because “a lot of companies in the fresh food business go into eCommerce without an objective to be profitable. We won’t do it unless we can be profitable.”

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