4th & Heart raises $7.6m, gears up for September launch of egg, collagen and ghee WOKE bar
Launched in May 2015 in Earth Fare and Central Market (H.E.B.), and now available in 10,000+ stores nationwide including Whole Foods, Kroger, Sprouts, and Target (in September), 4th & Heart is “growing at about 100% year over year,” said founder and CEO Raquel Tavares, who said she planned to “focus on marketing and sales a lot more intently than we have in the past.”
The money will also support the rollout of new products, said Tavares, who plans to add more team members with experience in taking a company the size of 4th & Heart “all the way to an acquisition."
WOKE bars to launch in September
WOKE: a new line of grass-fed collagen protein bars with ghee, will hit the market in September (initially online) in three flavors (chocolate, peanut butter, and cookie dough), taking the brand into completely new territory.
While the bar category is notoriously crowded, WOKE bars offer a key point of difference with their use of whole eggs and ghee, while the fact that 4th & Heart has proved itself in other categories has also made conversations with buyers somewhat easier than they would have been for an unproven brand in the bar set, she said.
While other protein bars such as RXBAR use egg whites, WOKE is “the first bar to have whole egg as a key source of protein,” Tavares told FoodNavigator-USA. “The bars have got 12-15g protein, 7g sugar, and around 230 calories. There’s no inulin and no sugar alcohols and they taste phenomenal.”
The WOKE brand name reflects a “desire to awaken your consciousness and live consciously,” but also reflects Tavares’ fondness for the original brand name, WOLK, a play on egg yolk (“The problem was, we discovered that if we just used pure egg yolk, we had to add a lot of sugar to mask the bitterness”).
The rise and rise of ghee
Dr Tom Sanders, Professor Emeritus of Nutrition and Dietetics at King's College London and an expert on the relationship between dietary fat and cardiovascular health, told delegates at our online forum on fats last year that he was “astounded people consider it [ghee] to be healthy” given its ultra-high saturated fat content.
However, sales of ghee have been surging in recent years, in part because consumers perceive it to be a healthy choice.
Produced by boiling butter and removing the milk sugar (lactose) and protein (casein and whey) to leave pure butterfat, ghee is also popular with cooks as it has a very high smoke point (up to 500 degrees Fahrenheit), making it ideal for slow-cooking methods such as sautéing and searing (the smoke point is the highest temperature at which you can safely heat an oil before it starts to oxidize and burn).
Multiple factors explain ghee’s growing popularity, said Tavares, although she speculates that only about one in five consumers seems to know what it is, so there is a huge opportunity to increase household penetration.
“I think people are excited by it as it is being driven by all these trends such as keto and paleo and Whole30, and then you’ve got people adding it to their coffee. But they are also understanding that you can cook anything with ghee, not just Indian food. It’s more functional, and it tastes better [than other cooking oils].”
Asked about the competitive set, she said: “I think it’s a little too early to have more than three ghee brands on shelf, and private label also got into this market very early.”
Ghee products don’t all taste the same
As for taste, she said: “There are different ways to make ghee [eg. from cream or butter] and depending on how you make it and how long you cook it, they can have different tasting notes.
“You can just put butter in a centrifuge and spin out the fat, or you can cook it for different lengths of time [which can create caramel notes if the milk solids that have sunk to the bottom of the pan begin to brown] and then filter out the milk solids.
“We make ours by cooking grass-fed butter primarily from New Zealand and we have a very specific cooling process and a very smooth consistency without any granularity as we filter the [cooked butter] three times before we package it. We also offer a wide range of flavors [from Original, to Turmeric, California Garlic, Himalayan Pink Salt, and Vanilla Bean], and we are the leaders in innovation.
“We were the first to put it in a pour bottle, in a spray bottle, in a single serve [format], and we have contributed significantly to the growth of the category.”
Asked why it was not possible to secure grass-fed butter domestically rather than sourcing from New Zealand or Australia, she said: “We couldn’t source enough supply [from the US] to meet our demand in the US. We could buy from Organic Valley and Vital Farms [which both make pasture-raised butter] but they are also our competitors [both sell ghee products].”
Harbinger usually comes in at an earlier stage
She added: “The strategy going forward will be put together as a group in conjunction with the fund. Harbinger usually comes in at an earlier stage, but they liked the brand so much that they decided to invest anyways as lead, and we’re thrilled that they have.”
Asked whether she had had conversations with big CPG companies as potential investors, she said: “Looking forward, we’ll start looking more at who might be a good fit for the ultimate acquisition of 4th & Heart and now that we’re larger in revenue we’ll probably start getting inbound calls.”
Quizzed on what advice she'd give to other entrepreneurs in the food and beverage space, she said: "Get really good counsel in the beginning, as soon as you can, so you make sure that as you look forward to future rounds, you know how your decisions in the series A could affect your potential to raise money in later rounds, and make sure that the tax implications are well understood depending on how you file."
I guess I'd call myself a workaholic
As for achieving a work/life balance, she said: "I have an amazing team and a lot of support and people that can do more heavy lifting now. But I guess I'd call myself a workaholic.
"It's pretty much the nature of the beast; when you're the founder, you're always thinking about the business, whether you're in the office or not, so I'm always thinking about how to move the business forward, or reading, or doing research, or doing R&D in my kitchen."
4th & Heart launched its first product – ghee – in 2015, but has since expanded its range to include flavored clarified butter spreads, hybrid Ghee MCT pour oils and sprays, Ghee To-Go packets, and Chocti chocolate spreads (think Nutella, minus the nuts).
Launched in late 2017 and typically merchandised in stores’ nut butter sections (although Whole Foods is trialing them next to the brand’s ghee products) the spreads are now in around 3,000 bricks & mortar stores and online, proving popular with millennial moms to give to their kids, or use in baking, hot chocolate or milkshakes, says founder Raquel Tavares.
