Is this RealEats’ time?

As many restaurants teeter on the edge of collapse and other food businesses stand on shaky ground, some investors are betting on the tailwind RealEats America, a three-year-old company in Geneva, rides today and into the future.

The coronavirus pandemic has worked in RealEats’ favor, as more consumers look for options beyond restaurants, even after shelter-in-place orders have been lifted. For now, that demand continues. 

Nationally, meal kit deliverers like Hello Fresh and Home Chef have seen their customer base expand as well, and they predict rosier futures after stagnating times. Online food delivery industry forecasts by research houses vary, but all expect double-digit growth and note the burgeoning demand for quick access to food. A Research & Markets report in January—issued before the pandemic struck this continent—said the North American market could reach $37.7 billion by 2024, growing 12.3 percent over a five-year period. 

Closer to home, RealEats last month raised $2.8 million, hired a coveted New York City chef as its president and expects to close the year with at least a 100 percent increase in sales over 2019. The company plans to use the funds to acquire customers and build out its infrastructure.

Unlike most meal-delivery services that send subscribers fresh ingredients to prepare meals, RealEats offers healthy, farm-to-table, ready-to-eat food. With locally sourced, seasonal ingredients from New York’s agricultural community, these meals are cooked by chefs and packaged with a technique similar to the French sous-vide style. (Sous-vide, or under vacuum, uses precise temperatures to deliver consistent results for tasty, restaurant-quality food.)

“If you think about it, our product is a vacuum-sealed meal, which kind of locks out all the bad stuff—the germs, the viruses, the bacteria—and it locks in all the good stuff, the freshness, the flavor, and the nutrients of real food. So, (during the lockdown) and as we move forward in the role of health and hygiene, it started really resonating more with customers,” says Dan Wise, CEO of RealEats. “We saw a great response from customers for our product at the time and we do continue to.”

RealEats is not profitable yet, says Wise, adding that “we do not anticipate reaching profitability in 2020. Our focus continues to be providing consumers with meals made from the highest-quality, nutrient-dense ingredients at an affordable price. We don’t believe in cutting corners when it comes to peoples’ dietary health. So, it’s going to take a bit more scale to reach profitability for RealEats.”

All about timing

Backing RealEats again was easy, says Rami Katz, chief operating officer of Excell Partners, which manages Empire State Development’s Finger Lakes Forward Venture Capital Fund L.P.  In total, across different investments, Excell so far has invested roughly $1 million in RealEats.

“We came in because we believe in the management team and we believe that it supports a very smart trend of eating healthy,” Katz explains. “You can imagine how explosive coronavirus was for this. 

“Their growth has been exponential, they are in discussions with several strategic partners that will help them grow even further, even faster, and they are truly committed to growing jobs and working with farmers for locally sourced food in the Upstate New York region.”

The Finger Lakes Forward Venture Capital fund was the lead investor in RealEats latest seed series round, which closed in June, with a number of private and public investors, including Armory Square Ventures.