Meet The Startup Churning A Profit From Ghee, A Better For You Butter
From grains like farro and quinoa to fermented fare like sauerkraut and kimchi, it’s no secret that “ancient” foods are making a resurgence on modern menus. But that leaves diners wondering, what’s the next age-old ingredient that will be made new again? One founder has her money on ghee. Raquel Tavares Gunsagar launched her company, Fourth & Heart, two and a half years ago to sell her ancient butter alternative to contemporary consumers. For Tavares, timing proved critical. She introduced her product to the market just as America’s obsession with healthy fats, like avocado and coconut oil, was heating up.
After presenting at Expo West in 2015, she captured investor attention and secured a deal with leading organic and natural foods distributor UNFI. Just over a year out from launch and one rebrand later, Fourth & Heart closed a $1 million Series A on crowdfunding site CircleUp, lead by an anonymous private investor. The company, started with $80,000 of her personal savings, did $2.2 million in revenue in 2016, Tavares tells FORBES. “I had an idea and I didn’t know how fast it was going to take off,” says Tavares, who admits that she was surprised by how quickly her product was picked up by retailers. “We were in a small category and the idea was just starting to trend.” Since then, it’s become more mainstream.
Her ghee is now sold in 6,000 points of distribution including chains like Kroger, Whole Foods, Giant Eagle and Central Market. She’s hoping to launch in Target stores in 2017. “I see it picking up the most right now,” she says of the self-staple pantry item.
Why bring ghee back? Ghee, a type of clarified butter, dates back thousands of years to ancient India. It appears in the Indian holy text the Bhagavad Gita and was (and is) still used for religious rituals, as an alternative medicine, and, most commonly, as a staple item in diets and core to cooking many dishes.
Tavares became familiar with ghee at an early age because her mother worked as a registered dietitian and a practitioner of Ayurveda medicine, an ancient and holistic Indian healing system which uses ghee for treatments. When Tavares left her job in marketing, later teaming up with cofounder Lillian Wunsch, she considered what food item she could start a business around and put her unique stamp on. She looked at what had been done with yogurt and peanut butter, and after reflecting on her own experience, ghee became a natural fit. She launched using first her own savings and later a $135,000 friends and family round under the name Tava.
She knew her business was going after the formidable butter market, which produces over 100 million pounds of the spread each month, with big players like Land O’Lakes leading in market share. But, Ghee falls in a category just outside of it, as a butter replacement, like coconut oil. Nevertheless, the subcategory is expanding. According to industry experts, Ghee is the fastest growing category in the nearly $10 billion butter and butter replacement industry.
Why choose ghee over butter? Ghee differs from regular butter in a few key ways. It has a high smoke point, meaning unlike butter or coconut oil, it doesn’t easily burn when heated. It’s naturally spreadable, so it doesn’t need to be softened first and it also doesn’t need to be refrigerated. Ghee is lactose-free because it doesn’t contain any milk solids, which are filtered out during the cooking process. While it doesn’t lower cholesterol, it doesn’t add to it, and is high in fat soluble vitamins A, D and E.
While other, larger, companies like Organic Valley sell ghee, Tavares says no one else offers flavored options. Her variations on the original include Himalayan Pink Salt and White Truffle Salt, among others. Tavares says her product has been showcased by companies, like Whole Foods, that note ghee as a growing trend. This good press has been critical in reaching millennials, and, she says, has helped her take “about 11-14% of existing competition” in the category.
Fourth & Heart ghee is currently sold in glass jars, but, in March, Tavares will unveil a new line of sprays, pourable ghee and single-serving portions.
Looking ahead Although, generally speaking, food trends are fickle at best, Tavares has high hopes for her brand in 2017. “This year is exciting because it’s the year our brand will become a household name,” she says. She’s intent on educating consumers about the many virtues of ghee by going into grocery stores and conveying the brand message and story directly to buyers. In terms of financials for 2017, she looking to raise more money and, “in a perfect world, we’d double our revenue.” Natalie Sportelli , FORBES STAFF