Imperfect Foods exec details plan to expand into beauty after its latest funding brings valuation to $700 million
- Imperfect Foods completed a Series D funding round worth $95 million, the company said Jan. 21.
- The direct-to-consumer outfit is moving beyond fresh foods with own-brand health and beauty products.
- Imperfect wants to be a "one-stop shop" for grocery, its chief merchandising officer told Insider.
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The company that made its name selling wonky produce directly to consumers is now getting into the health and beauty space.
Imperfect Foods is launching three self-titled private-label beauty products, marking this its first venture outside of food, the company exclusively told Insider. The products include body butter with avocado and honey, rose facial oil, and a three-in-one soap, shampoo, and conditioner.
The news came on the same day that Imperfect said it had secured $95 million in new funding as part of a Series D round. The round is being led by venture capital firms Insight Partners and Norwest Venture Partners. It brings the total that the company has raised to $243 million, with its valuation standing at $700 million, according to Pitchbook.
Until now, Imperfect Foods' offerings have been strictly food-focused. The company got its start in 2015 as Imperfect Produce, selling apples, carrots, and other fresh foods — many of which were either too small or too large for supermarket shelves or didn't meet grocers' cosmetic standards — to consumers in weekly shipments. Imperfect Foods has since added eco-friendly and better-for-you packaged foods like chocolate covered pretzel bites and quinoa to its lineup.
"Our goal at Imperfect Foods is to be a one-stop shop for our customers, especially around their grocery needs," said Martha Hale, Imperfect's chief merchandising officer. "That includes their personal care."
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"From my past experience, I have a little bit of data that told me that this is important to customers," she said of health and beauty products as a new category for the company.
Hale joined Imperfect Foods in May 2020 after working on private-label brands at Trade Joe's, Amazon and the former grocery operator Delhaize. The online grocer's move into health and beauty is her brainchild.
Imperfect Foods's pitch to consumers has always included elements of what it believes is its environmental and social responsibility. Its produce and fresh food sales are an effort to reduce food waste by selling items that would otherwise be thrown away, for instance.
Expanding into health and beauty, as well as growing its private label, now requires a slightly different approach for the brand to live up to its moral code. The products are made specifically for Imperfect Foods, and the company sought out suppliers that met certain criteria, according to Hale. Its three-in-one conditioner, as an example, contains seaberries that are Fair Trade-certified, and the factories that manufacture the products are powered by solar energy.
Having more direct control of sourcing and manufacturing also cuts costs compared to supply chains and products that Imperfect does not own, Hale said. All three products will retail for less than $10.
"We don't want our customers wondering about what they're buying," she said. "We can pass savings along to our customers, but also importantly, you can verify everything that goes into your product."
Imperfect Foods investors, including NBA star Kevin Durant, have put $148 million into the company, according to PitchBook. In May, it raised $72 million in Series C funding just as demand for companies that deliver food to consumers' homes was at a fever pitch thanks to the pandemic. Some Imperfect Foods investors have told Insider that they believe the good times will continue for the company in the post-COVID era.
The health and beauty offerings are the lastest sign that Imperfect Foods is maturing as a company. In late 2019, Imperfect Foods tapped Philip Behn, who formerly worked on e-commerce for Walmart, as its new CEO, taking over for cofounder Ben Simon.
Overall, the company is going beyond its roots in direct-to-consumer produce to capture more of consumers' weekly grocery budgets. "I would consider us a retailer," Hale said.
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