Sunrise buys stake in pasture-raised eggs company

The seventh investment from food-focused growth capital provider will support Vital Farms, a producer of “pasture-raised” eggs based in Austin, Texas.

Sunrise Strategic Partners announced Thursday that it has purchased a unspecified minority stake in pasture-raised eggs provider Vital Farms.

A Vital Farms representative subsequently told Agri Investor that Sunrise’s investment in the company was valued at $11.1 million, but declined to specify the percentage stake.

Based in Austin, Texas, Vital Farms sells eggs and butter from hens given access to a minimum of 108 square feet of space as well as green pastures, fresh air and a diet of grass, insects and forage. Founded in 2007, the company highlights the distinction between their pasture-raised eggs and “cage free” and “free-range” offerings that Vital Farms says leaves hens too crowded.

“We believe that raising healthy, happy birds outside on fresh pastures also produces the most nutritious and flavorful eggs,” Vital Farms founder and chief executive Matthew O’Hayer said in the statement.

Sunrise said in the statement that its investment will help Vital Farms, which also counts SJF Ventures among its investors, to improve infrastructure required to bring eggs to market from the company’s network of family farms.

“Vital Farms created the category of ‘pasture-raised’ and has established the first-ever scalable and sustainable pastured farming model with over 100 independent family farms,” said Sunrise co-founder and chief executive Steve Hughes. “We believe that once the consumer understands the difference pasture-raised eggs provides, they will switch to Vital Farms and never look back.”

Vital Farms chief operating officer and president Russell Diez-Canseco told Agri Investor that consumers are increasingly factoring animal welfare considerations into their egg purchasing decisions. He said that while overall egg consumption grew by just 4 percent in 2016, pasture-raised egg demand grew by 52 percent and demand for Vital Farms’ pasture-raised eggs grew by more than 90 percent, compared with 2015 sales.

Sunrise provides growth capital to companies in the healthy, active and sustainable living sectors that the firm expects will resonate with millennial consumers. Based in Boulder, Colorado, the firm was founded in 2016 in collaboration with Trilantic Capital Management, a private equity firm with $5.9 billion in aggregate capital commitments.

The firm typically invests in businesses with between $10 million and $20 million in run rate revenue and the investment in Vital Farms is its seventh. Sunrise’s previous food-related investments have included grass-fed beef provider Teton Waters Ranch, dairy manufacturer Maple Hill Creamery and Pure Growth Organic, which provides organic snacks including popcorn, animal crackers and pretzels.