Fonterra joins YFoods’ US$16.3m investment round

22 Apr 2020 --- New Zealand’s multinational dairy cooperative Fonterra is among the investors in the Series B funding of YFood, valued at €15 million (US$16.3 million). The company, established 2017, is a specialist in nutritional bars, drinks, powders, snacks and meals targeting on-the-go consumers. YFood will use the funds for European expansion. For 2020, the start-up is expecting a mid double-digit million turnover.

Over the last year, YFoods reports that its business has grown “over 300 percent” and has become part of the newly emerging “Complete Food” segment in Germany. The start-up currently serves over 200,000 online customers and has more than 13,000 sales outlets available in stores. 

The company has been innovating within the “Complete Food” segment, specializing in RTE and other easily consumed formats – touted as “perfectly matching” the modern lifestyle of busy consumers. YFood-branded products are marketed as “balanced, fully mobile meals and thus combine fast pace with health awareness.”

RTD nutritional beverages by YFood.“The Right Bite” is ranked as one of Innova Market Insights’ 2020 Trends, reflecting how food and drinks supporting lifestyle choices have risen to become a top driver of NPD this year. The market researcher outlines the target audience for such products as consumers seeking to “embrace healthy lifestyles, balance busy schedules and/or reject their current lifestyles in search for change.”

YFood products also tap into a second prominent theme, “Macronutrient Makeover.” “Complete Nutrition” is another approach pursued by YFood in its product development, ensuring that its offerings contain all essential micro and macronutrients that the body needs – without sacrificing taste. 

The company has also recently launched an online shop in the UK in a prelude to its European expansion, while drawing upon Fonterra’s capacities in ingredients, intellectual property and patents to invest more in research and product development.

Fonterra made its first foray into alternative proteins by being among the US$90 million Series A financing round for Motif Ingredients. While dairy nutrition will remain the core focus for the New Zealand-headquartered company, the minority stake move came as part of a plan to “future proof their co-op for generations to come.” 

By Benjamin Ferrer