“Bone broth? What’s that?” I remember asking my partner Brian Balfour when he mentioned what his friend Justin Mares was working on. Justin was part of a group of customer acquisition experts that Brian has known for a number of years and was so impressed by him that he was convinced that anything Justin would work should be invested in. Despite having no idea what bone broth was at the time, we decided to stick with one of the key principles that guided our investing — people first– so we invested in Justin and his brother’s company Kettle and Fire.
I am glad that we did. A few weeks ago, K&F announced an $8M round led by what many consider to be one the best CPG focused venture fund — Cavu Ventures.
Looking back on the investment, on Justin and his team’s progress, there are two characteristics about the Kettle and Fire founding team that I have come to appreciate – a truly thoughtful approach to managing cash and fundamental belief in the mission of the company.
In an age of massive financings and companies that allow their spending to get ahead of their traction, I am extremely impressed with how much Justin and his team at Kettle and Fire were able to accomplish with a relatively small amount of equity raised (approx. $900k seed round). Kettle and Fire’s grass-fed, shelf stable bone broth and bone broth based soups are sold online and nationally at Whole Foods, Sprouts, Wegmans, etc. Justin and his team have been extremely cash efficient and thoughtful about managing inventory, their marketing spending, and hiring only when necessary.
The company’s fundraising strategy has been equally as deliberate. While it is clear to Justin now that there is a large opportunity in his category, it was not always obvious how large an opportunity Kettle and Fire was going after. Hence, Justin made sure to focus on sustainability early on. He only decided to raise capital when he had grown substantially and he clearly saw the signals of a larger market opportunity that merited the additional capital infusion. Beyond setting up sustainable practices and good habits at the company, this measured approach to growth was great for all shareholders as Justin was able to build enterprise value, thus making his capital raise less dilutive.
Finally, Justin and his brother are extremely mission driven and we have spoken at length about our broken healthcare and industrialized food system. They operate Kettle and Fire hoping to fix these wrongs. The company has strict standards around how the animals are raised and made sure that cattle are fed 100% grass-fed diets with no antibiotics or hormones. Kettle and Fire is shipped in eco-friendly packaging unlike many other CGP products today.
We are glad to have stuck to our principles and backed Justin and his team.