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Financing

True Food Kitchen plans to launch new fast-casual brand with help from $100M investment

HumanCo and Manna Tree join Centerbridge Partners, bringing in key investors that include Nick Jonas and wife Priyanka Chopra.
The company plans to open a fast-casual variant next year. / Photograph courtesy of Shutterstock

True Food Kitchen plans to launch a new not-yet-named fast-casual brand next year in Phoenix.

The Phoenix-based chain announced a more than $100 million investment round on Thursday, capital that will enable the healthful brand to grow both the primary full-service concept and the smaller-format brand, which will have a different menu but the same focus on health and wellness.

It's something True Food guests were asking for, said CEO Christine Barone, in an interview.

“If you look at our mission of helping people eat better and feel better, a lot of that needs to be done every day,” she said. “So if you look at our opportunity and what our guests are asking us for, it’s how we can be more a part of their everyday lives.

“So what we’re thinking through is a concept that has all the same beautiful pieces of our mission and how we source our food, but is also more convenient, a bit more for every day, something easy to take on the run or take home to your family, and really feel good about the choices that you’re making,” she added.

Details on the new brand are yet to be determined, but Barone said the smaller format will likely be between 1,800- and 2,500-square feet, more than half the size of True Food units, which range between 5,000- and 7,000-square feet.

The smaller brand will likely have counter service with some dine in. The menu will also have a lower price point, and the first location will be designed for easy to-go pickup. The company may also look at possible drive-thru formats down the road, she said.

Barone sees an opportunity to build off-premise sales, which account for about 30% of revenue currently, much of that through the company’s own channels.

She also sees demand for healthful to-go food at dinner.

True Food’s sales are split pretty evenly between lunch and dinner, but the new fast-casual brand’s menu will include healthful dishes that are warm and more hearty than salads for families looking for healthful later-daypart meals.

The company will also continue to grow the larger True Food units. Over the next two years, more than 10 are planned, and Barone hopes to move into some new markets as well as add to existing territories. Currently, the brand operates in 17 states.

Barone said the new funding brings in growth investors who want to help make the world a better place through food.

The funding round was led by two investment firms new to True Food: HumanCo and Manna Tree. The round is also supported by existing investor Centerbridge Partners, which previously owned P.F. Chang’s, a company that helped develop the brand from its early days.

Key investors in this latest round through HumanCo include Nick Jonas and his wife actress/producer/model/singer Priyanka Chopra. They are among a number of celebrity backers already behind the brand, including Oprah Winfrey and frequent Starbucks CEO Howard Schultz, as well as investment firm Lion Capital.

It’s the largest investment for the 42-unit chain, which was founded in 2008 by Dr. Andrew Weil, a pioneer of integrative medicine who has built the menu around an anti-inflammatory diet, along with prolific restaurant-concept-creator Sam Fox of Fox Restaurant Concepts.

P.F. Chang’s took a role in the early growth and then acquired a majority stake in True Food Kitchen in 2012. True Food stayed with Centerbridge after P.F. Chang’s was sold.

HumanCo has a history of investing in businesses that support wellness and sustainability, including the plant-based ice cream Cosmic Bliss, the grain-free pizza bite brand Snow Days and the gluten-free product line Against the Grain Gourmet.

HumanCo’s advisory board includes tennis star Venus Williams and former PepsiCo CEO Indra Nooyi.

Jason Karp, founder and CEO of HumanCo, in a statement described True Food as “an amazing, uniquely mission-driven brand that’s authentic, accessible and unwavering at a time when a lot of health and wellness is not.

“While many companies are engineering man-made and synthetic products, True Food Kitchen looks to nature and farms for all of its food — and we believe this is now we can all build a better, more sustainable food system,” he said in a statement.

Manna Tree also indicates a health theme across its portfolio, which includes 11 investments, including the greenhouse produce grower Gotham Greens, pasture-raised egg supplier Vital Farms, and organic, grass-fed beef producer Verde Farms, as well as the restaurant tech platform Cheetah.

 

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