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Grady’s Cold Brew, a New York City-based maker of cold brew coffee, may do its first institutional raise this spring or summer, said Grady Laird, president and co-founder.
“We are interested in talking to people,” said Laird, who worked in print production at GQ magazine before launching the New Orleans-style coffee company in Brooklyn in 2011. The company would be receptive to both strategic and financial investors for its Series A, and may raise about USD 3m, he said.
Proceeds would be used to hire sales representatives including a full-time foodservice sales rep, and to fund marketing spend, said Dave Sands, co-founder and head of business development. Sands moved to Los Angeles this month to spearhead growth efforts in the West.
Founded by Laird, Sands and Kyle Buckley, the company employs 25 and recently opened a new 15,000-square-foot brewery in the Bronx.
Asked about consolidation in the coffee space, Laird noted the sale of Stumptown Coffee Roasters to Peet’s Coffee & Tea (held by JAB Holdings) in October 2015, and the majority stake in Blue Bottle Coffee sold to Nestle [VTX:NESN] in September 2017.
“We’ve been approached a lot over the past 5 to 6 years,” said Sands.
Laird said Grady’s would likely wait until it hits USD 10m in revenue before considering an exit. “Something could happen as soon as next year,” he said.
The company is 70% owned by Laird and Sands. The third co-founder and board member, Kyle Buckley, has a small interest, while the remaining equity is held by family and friends.
The company has used SBA loans to fund equipment purchases.
Grady’s sells its products in about 3,000 grocery stores at names including Sprouts, Whole Foods, HEB and Wegmans, and is trying to get into Publix, Laird told this news service at the Fancy Food Show in San Francisco this week.
Grady’s is brewed with chicory, a method popularized in New Orleans, which gives it a sweet taste without the addition of sugar. It started off selling bottled coffee concentrate in 2011, which is still its “bread and butter” product, and now also offers ready-to-drink bottles as well as do-it-yourself brew kits.
E-commerce is another sales channel, where it offers its cold brew kits and bean bags in light shipping-friendly packages, which reach 12 countries including Lebanon, Japan and Australia.
Foodservice is its third division, which it launched two years ago and is expected to see continued growth, especially as it holds conversations with national fast-casual restaurant chains.
On the competition front, both Starbucks [NASDAQ:SBUX] and Dunkin’ Brands [NASDAQ:DNKN] now also carry cold brew coffee, Laird noted.
by Heather West and Dayna Fields in San Francisco
As seen in the Mergermarket newsletter on 1/24/18