SAN FRANCISCO — In the eyes of Ray Lane, managing partner at GreatPoint Ventures, San Francisco-based Hero Labs could do for baked goods what Beyond Meat did for plant-based meat: change the game. With real synergy between the two brands, Hero buns and tortillas started appearing in the Beyond Meat board room.
“We’d put the latest Beyond Burger in the bun or chicken or beef crumbles in the tortillas to make tacos,” said Cole Glass, founder and CEO of Hero Labs “They suggested I changed the name from Hero to NFW Foods because every time they tried it, they’d say, ‘No f—ing way this is real.’”
Since then, Hero Labs has secured financial backing from names like Tom Brady, Kevin Durant and a former executive from one of the country’s most notable fast-food groups, just to name a few.
When it was time to go to market, one partner really stood out.
“We met everyone imaginable at the c-level from practically every quick-serve restaurant and fast-casual chain,” Glass said. “And we started laying the foundation for eventual CPG and grocery relationships, as well. But what rose to the top was our first partnership, which was Subway.”
Harkening back on lessons learned from the relationship with Beyond Meat, the Hero team knew how to navigate the potholes on the “yellow brick road” paved to revolutionize the food space.
The result was a co-branded Subway launch that landed Hero Bread as an option on Subway menus in five markets. It wasn’t relegated to a “special” sandwich item; rather, it was a regular on the bread lineup.
“When you walk into Subway, the first thing you smell is the bread,” Glass said. “It’s the first thing you think about and the first thing you choose. We wanted to allow consumers to have any of their favorite Subway sandwiches made on Hero Bread.”
With Subway as the brand’s first QSR launch, consumers took to Hero Bread almost immediately, opening even more opportunities in foodservice, retail and direct-to-consumer (DTC) markets.
“Subway was the first QSR to offer a one-net-carb sandwich roll, and the feedback from consumers has been incredibly positive,” said Steve Straker, VP of R&D and commercialization for Hero Labs. “As we expand the availability of our products across various channels, including adding a DTC marketplace, there’s great opportunity awaiting when it comes to strategic partnerships with additional foodservice/QSR, grocery and retail concepts.”
Because the flour innovated by Hero Labs functions exactly like traditional flour — it’s net-carb-free but not gluten-free — the team can partner with some of the industry’s biggest co-manufacturers. From a production standpoint, the process looks nearly the same as that for traditional, carb-rich baked goods.
“The formula is easy to slide into the supply chain of any of these big partners, and that helps keep production costs down,” Glass said.
With supply chain under constraint, finding the right co-manufacturer with the time and capacity to fit Hero into the production schedule has become a new piece of the puzzle. This could likely impact what manufacturing looks like for Hero in the future, whether it’s co-investment, co-building a facility or, depending on subsequent rounds of capital, taking the whole operation in-house.
“Any of those are absolutely in the cards,” Glass predicted. “It’s just the kind of thing that requires a multi-year planning process with a lot of CapEx … and that’s for the pitch decks in our next funding round.”
The current co-manufacturing partners are seen as an extension of the Hero Labs team. Creating something so close to traditional bread, yet so different, provides a commercial bakery the opportunity to expand its capabilities, especially when each Hero product has such pivotal differentiators. Each baked good has its own special formula, but each recipe falls under the same macronutrient mantra.
“What we use for the tortilla to make it stretch, pull and hold the contents of a burrito is very different from what we’d use for a burger bun to make it retain its shape and fluffiness with a nice toastable outer crust,” Glass explained.
Then there’s the Hero croissant, whose flour has a makeup all its own to create a dough that can be laminated to hold all its layers.
“We almost consider it to be like developing a library of proteins and fibers, where you know what each one does when you add it into the flour mix,” Glass said. “But then you have to know all the exponential permutations of what that does with different levels of hydration and fat in combination with the others. It becomes a giant probability math problem.”
Scaling such complex products requires more than just the right production partners. Hero Labs now employs around 25 people with a broad range of baking experience in addition to Straker, who brings 36 years of bakery expertise.
“I just had to find people with decades of experience — and much brighter minds than mine — to execute on the foundation I was able to create with my two hands,” Glass said. “I had to teach it to myself, but I couldn’t have imagined the scale at which it could have reached and where we are now.”
As a small team working with such big partners, Hero expects exponential growth for its internal human resources, with a plan to double the staff in the very near future.
“Bread is often seen as a key component to human happiness, and the fact that Cole was able to reinvent foods that people love — with a significantly improved nutritional profile — was an opportunity I couldn’t pass up,” Straker explained. “Being offered a seat on this rocket ship has been nothing short of amazing since day one,” he added. “And it’s rewarding to know that our whole team is working every day to change the perception of what’s possible when it comes to great-tasting baked goods with better nutritional benefits. Hero will fundamentally change the way a staple of the human diet is viewed.”
