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Boulder Food Group sees first portfolio payout as Nestle buys Chameleon Cold Brew

Venture capital firm Boulder Food Group cashed in last week when Nestle bought organic coffee brand Chameleon Cold-Brew as the food giant sought to expand its coffee offerings.

Financial terms were not disclosed, nor would BFG share how much it made on the deal. Founder Tom Spier said the firm was the lead and only investor. Securities and Exchange Commission records show that Chameleon Cold Brew raised $4 million in August 2015.

“We certainly feel really good about it,” Spier said.

The brand was one of the first investments for BFG, which began fundraising in 2014 and secured $33.3 million, according to SEC documents. It has made nine picks so far, including Boulder’s Skratch Labs, Good Day Chocolate and Quinn Popcorn (now Quinn Snacks).

It’s most recent investment was in L.A.-based Caulipower, a maker of frozen pizzas and crusts made with cauliflower rather than wheat flour, which appeal to gluten-free consumers. BFG put $2 million toward the nascent brand, which is in 6,500 retailers nationwide after launching in March of this year.

Chameleon, too, grew quickly after its infusion of cash from BFG. The brand can be found in more than 10,000 U.S. retailers and last year sold more than 4 million bottles, beverage industry publication BevNET reported.

Americans drank 105 million cups of coffee between May 2016 and May 2017, Bloomberg reported. Cold brew made up 21 percent of coffee consumption in 2017, the National Coffee Association found, up from 15 percent in 2015.

“BFG did a really great job identifying a growth area and banking on what we saw as the highest quality brand in the space,” Spier said. “We (sold) to a buyer who is going to continue to push” in the organic and natural channels and improve sustainability.

Nestle in September purchased Oakland, Calif.-based roaster and retailer Blue Bottle Coffee, reportedly paying close to $500 million for 68 percent of the company.

Next for BFG is finding brands to replace Chameleon in its portfolio. The goal for the first fund, Spier said, was 13 to 14 companies. After that number is reached, a second fund will be launched that will likely occur in the next 12 months.

“This industry, although it’s made a lot of progress, there’s still room for organic, non-GMO brands to come in and take market share.”


(c)2017 the Daily Camera (Boulder, Colo.)

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