Female-Led Ripple Foods Raises $49M Amid Soaring Pea Milk Category

US pea milk maker Ripple Foods has secured $49.2M in its latest funding round, taking total investment in the company to over $274M. The financing comes amid a rise in interest in the pea milk category, which outpaced the overall alt-dairy segment year-on-year (but has been down in recent weeks leading up to July).

Ripple Foods’ $49.2M investment takes the Californian pea milk brand’s total capital raised to more than $274M. According to an SEC filing – first reported by Forbes – the funding came from a total offering of $55.4M via equity, debt, and securities that can be acquired upon the exercise of an option or warrant in the future.

The latest funding round follows a $60M Series E raise in 2021, which was led by S2G Ventures, Bloom8 and Ajax Strategies. Other previous investors include TAO Capital, Siddhi Capital, Prelude Ventures, Khosla Ventures and GroundForce Capital.

Creating a ripple in the alt-milk sector

The investment is among a very small number of large VC investments to women-led businesses – Pitchbook data shows that women-founded startups receive less than 2% of all VC. While Ripple, which makes plant-based milk and protein shakes from yellow peas, was founded in 2014 by two men, Adam Lowry and Neil Renninger, it is currently helmed by a female CEO, Laura Flanagan.

While there hasn’t been a statement about the latest funding, Flanagan had noted after the Series E raise that the company was outpacing the expansion of the overall plant-based milk industry by threefold, and was well-positioned to further accelerate this growth: “This capital raise will enable us to accelerate innovation and growth across product categories, and expand into new channels and global markets. It allows us to further achieve our mission of making plant-based foods that are better for people, and better for the planet, on an even larger scale.”

Since then, Ripple has added a blended Oatmilk + Protein oat and pea milk (though it seems to have been out of stock for a while) to its lineup of vanilla (sweetened and unsweetened), chocolate, original and sweetened milks. It expanded its kid-friendly line too, with an unsweetened version joining the original DHA- and calcium-rich milk. Moreover, its smoothies come in chocolate, coffee and vanilla flavours.

The company’s USP is its pea protein, called Ripptein, which is made from patent-pending tech that eliminates “the impurities like flavonoids and tannins that can give other plant-based milks their plant-ey flavour”, resulting in what it claims is the “purest, cleanest-tasting non-dairy milk”.

The US pea milk market

Ripple’s raise comes at a curious period for plant-based milk in the US. In 2022, it saw a 9% annual growth in dollar sales, which reached $2.8B, commanding 15.4% of the total milk market. This sector also penetrated 41% of households, with 76% of consumers repeating their purchases. Despite this rise, unit retail sales were down by 2% from 2021, suggesting the growth comes on the back of price hikes.

In fact, Ripple was among the top 10 leading brands in terms of alt-milk sales in 2022, when the pea milk category grew by over 27% year-on-year. And while that trend has continued over the past year – with SPINS data showing an increase in dollar sales by 17.3% and unit sales by 4.1% for the 52 weeks to July 16, 2023 – this market has faltered in recent weeks, seeing a 4.8% drop in dollar sales and 2.8% drop in unit sales in the 12 weeks ending July 16.

In contrast, the overall plant-based dairy sector saw dollar sales rise by 7% and unit sales fall by 5.4% year-on-year, but has experienced a fall in both metrics in the 12-week period (-3.6% and -2.5%, respectively). Similarly, while conventional dairy dollar sales were up by 4.6% annually, unit sales declined by 2.3% – and in the 12 weeks to July 16, both were down (-3.6% and -2.5%, respectively).

So while the pea milk segment has seen a slightly larger decrease in the number of packs sold as well as total sales in recent weeks, it has outpaced both conventional and the overall plant-based dairy sectors in the last 12 months. And as health becomes an even larger influence on purchasing decisions in the US – with Gen Zers going vegan more for health than environmental reasons, and brands pushing nutritional aspects in product messaging – you could make the case that Ripple is poised for growth.

The brand’s pea milk is soy- and nut-free (making it more inclusive for people with allergies), and has half the sugar, 50% more calcium and the same amount of protein compared to semi-skimmed cow’s milk. Ripple is also synonymous with the North American pea milk industry, where it’s available in over 20,000 retail locations.

The sector includes players like fellow Californian brand Bolthouse Farms and Swedish producer Sproud. Perhaps its closest challenger at present, though, is Chilean food tech company NotCo, which uses yellow pea protein as a primary ingredient in some of its alt-milks. It has raised over $433M to date, and just launched a vegan mac and cheese with Kraft Heinz.