Revolutionaries target US school canteens

Start-up stories do not come more motherhood and apple pie than that of fellow Berkeley Haas graduates Kristin Richmond and Kirsten Tobey.

The founders of Revolution Foods, a social enterprise producing fresh, healthy meals for children, met during their MBA studies — on the first day of “math camp” — and developed their idea from there.

Initial seeding

“Our mission and finance model are intertwined,” says Ms Tobey, explaining that children in inner cities tend to be the ones receiving free meals, making it easier for them to deliver in large batches.

According to Ms Tobey, there were several eureka moments. “One came when we were talking to a physical education teacher who told us he had stopped going into his school’s cafeteria. He was teaching kids about proper nourishment for their bodies during PE class, and students called him a hypocrite for “allowing” the school to serve hyper-processed junk food.

On another occasion, they were talking with a group of students in a canteen and one student said: “I just want to eat something made by a person who respects me.”

“At that moment, we dedicated ourselves to making food with respect for families and students across America,” Ms Tobey says.

Personal growth

Studying for an MBA had several advantages for the Revolution Food founders, not least the time to think. “We weren’t people who could take time off to start a business,” Ms Tobey notes. “Going to business school gave us the incubating environment.”

Ms Richmond and Ms Tobey wrote their business plan as part of their social entrepreneurship classes.

The focus on children gained an added poignancy for Ms Richmond when she gave birth to her first child, and the founders secured a $500,000 seed round, to buy trucks and pay the company’s four employees, on graduation day.

Flourishing contacts

“Many of our greatest mentors, advisers and investors are connected with the Berkeley MBA in one way or another,” Ms Tobey says.

The two founders were introduced to Steve Case, co-founder of media corporation AOL, through one of their original backers the Nancy Pfund at DBL Investors, for example. He subsequently became an investor himself.

Part of the attraction is that Revolution Foods is a “disruptive” business, the tech industry’s term for start-ups aiming to upset established practices in a market.

“We call ourselves a social enterprise,” Ms Tobey says. “It helps with the sense of purpose. Also, we work with schools where people don’t want to feel they are being sold stuff.”

Taking root

The business has now raised several rounds of equity finance from a mixture of foundations and VC firms.

“Having a capital structure that includes both venture investors as well as foundation investors creates a governance structure that really protects our social mission and commitment to increasing access to high quality, healthy foods,” Ms Tobey notes.

Today Revolution Foods is serving more than 1,000 schools in 30 major metropolitan US markets, spanning 15 states. Revenues this year will top $100m, and the business has 1,500 employees.

One of the most notable developments in the past two years has been an expansion into consumer packaged goods.

“We heard repeatedly from families in the schools we serve that they are looking for high quality, healthy options in the grocery store as well as in schools,” Ms Tobey says.

The plan now is to expand their list of stockists, she adds. “We are also continuing to innovate new food items for the grocery store.”