Sonoma Brands has announced it has secured $60 million in funds to be directed at investing in innovative specialty food products, and its gourmet marshmallow company, Smashmallow, has peeled off into an independent entity, after closing a $10 million funding round with Velocity Made Good Partners, a private equity investment firm in San Francisco.
By the end of February, Smashmallows, which are manufactured in Pennsylvania, will be distributed throughout all Target stores and on shelves at Whole Foods by spring, and the company will be targeting international markets in the next year, said finance veteran David Lacy, who has been named as Smashmallow’s new CEO.
Lacy is the former VP of Finance at baby food brand Plum Organics, which was sold to Campbell Soup Company, former CFO and interim COO of Krave, and most recently, former CFO at personalized nutrition startup Habit.
Sonoma Brands launched Smashmallow, an organic marshmallow, in 2016 in seven flavors including Meyer-lemon chia seed, mint chocolate chip, toasted coconut pineapple, strawberries and cream, root-beer float, espresso bean and cinnamon churro.
By early 2017 the product was in stores nationwide.
In the next 12 to 24 months the company will be expanding production and promoting “smoring season” (summer), and coming out with new holiday flavors like pumpkin pie and sugar cookie.
“We have a product with a unique and fun flavor profile, and we are amplifying and building on occasions where people are embracing smoring more,” Lacy said.
Sonoma Brands also launched Smashcrispy, a rice crispy treat, an extension of Smashmallow, in November 2017, and Lacy is hoping for shelf space in Walmart by the middle of the year for that product.
By the end of 2018 combined sales for the two products are targeted at $30 million, he said.
Sonoma Brands was launched in 2015 by local entrepreneur Jon Sebastiani after he sold his five-year old Sonoma-based Krave Jerky to Hershey for an estimated $220 million. He is the great-grandson of the founder of Sebastiani Vineyards in Sonoma.
Following the sale of Krave, Sebastiani invested in Dang Foods, a Berkeley-based company that makes chips out of coconuts and onions, and has annual sales nearing $20 million. He also invested in Zupa Noma, a healthy, ready-to-eat soup.
Cynthia Sweeney covers health care, hospitality, residential real estate, education, employment and business insurance. Reach her at Cynthia.Sweeney@busjrnl.com or call 707-521-4259.