Dive Brief:
- Shenandoah Valley Organic closed a $15 million funding round led by venture capital firm NRV, with participation from Open Prairie and existing investors S2G Ventures and Middleland Capital's VTC Innovation Fund. The Virginia-based company's total funding is now $24.2 million, according to Crunchbase.
- Shenandoah was established in 2014 and produces the Farmer Focus brand of organic, traceable and humanely raised chicken. The company's processed chicken, which is locally sourced, doesn't contain growth hormones, pesticides, antibiotics or animal byproducts.
- Founder and CEO Corwin Heatwole said in a release the company will use the new funds to modernize its facilities and expand marketing outreach for both its Farmer Focus fresh items and value-added product sales at grocery stores and retail locations in the U.S.
Dive Insight:
Shenandoah Valley Organic wants to add to its geographic footprint and further the reach of its Farmer Focus organic brand, and the additional $15 million investment could help facilitate that growth. This is the biggest funding round to date for the company, following a $5.5 million round in 2018 and a $3.7 million one in 2017.
Per capita consumption of chicken has been steadily increasing in the U.S. and hit 93.8 pounds in 2018, according to the National Chicken Council. That amount far exceeded the per capita consumption of either beef or pork that year — at 57.2 and 50.9 pounds, respectively.
Organic fresh chicken has been performing especially well, with sales reported up 8.6% from 2016 to 2017, which was four times higher than conventional poultry. According to a report earlier this year from Reports and Data, the global organic poultry market is projected to reach $15.58 billion by 2026, for a compound annual growth rate of 10.1%.
While there's growth in this market, it's also getting more crowded. Last year, Tyson Foods acquired Nebraska-based Tecumseh Poultry, a leading producer of organic chicken under the Smart Chicken brand. Perdue Farms and Pilgrim's Pride also produce and market their own branded organic chicken products.
What could help Shenandoah stand out on shelves is its commitment to traceability. Shenandoah has a four-letter Farm ID, which is a coding system that traces each chicken to the farm where it was raised. Creating this connection between consumers and farmers can help build trust. Traceability and transparency are key attributes for many consumers who increasingly want to know details about from where their food comes. Add in organic sourcing and the absence of antibiotics and growth hormones, and Shenandoah is checking several on-trend boxes in the chicken category.
One of Shenandoah's largest investors, Virginia-based NRV, seems to be looking for what's up-and-coming in consumers' minds. It has used its venture capital fund to support other trendy entities including plant-based food ingredients company Nutriati, the meal-delivery company Territory and plant-based snack firm Beanfields.
Shenandoah announced two key hires in June — Jefferson Heatwole as chief sales officer and Dorothy Muszynska as chief marketing officer. Perhaps the importance placed on these positions signals where much of the focus will be going during the near term with this latest surge of funding.