The bureaucracy and regulatory web around America’s school lunchrooms can be difficult if not downright labyrinthine to navigate, but Revolution Foods has taken on that difficult market nutritious meals that are now served about two million times a week to kids at about 2,500 sites in school districts around the country.
And now co-founders Kristin Groos Richmond and Kirsten Saenz Tobey are taking their business model outside the school building as they venture into what Richmond calls a “city-wide wellness realm” that she expects to grow the company significantly beyond its current $150 million in annual revenues.
“Our original mission was to create lifelong healthy eaters and use great nutrition as a way to set all students up for success to learn,” Richmond told Chief Executive. “Now we’ve also started looking at the community wraparound space including pre-kindergarten, after-school programs, Boys & Girls Clubs, YMCAs and even summer programs. We’re looking to help vulnerable elders and maybe meals-on-wheels. We’re also very committed to hunger alleviation.”
The women met in 2006 when they were MBA students at the University of California at Berkeley, and coincidentally in a marketing class both pitched ideas for businesses that would make healthy food accessible to children. A partnership was born.
But their target was difficult. Major foodservice providers and locally run operations have had the school-lunch market wrapped up for decades. And because federal-government disbursements largely dictate how much school districts will spend on meals, it’s been difficult for more healthful – and more expensive – propositions to get traction in the difficult school environment. Even high politicization of the market — for example, by former First Lady Michelle Obama and her initiative to overhaul kids’ diets — hasn’t made it much easier.
But along came Revolution Foods with an approach to focus initially on San Francisco Bay Area schools and set up supply chains for them that would provide nutritious, cost-effective breakfasts, lunches and dinners that contain no artificial colors, flavors, preservatives or high-fructose corn syrup, and that are largely prepared from local ingredients.
The founders refused to compromise on taste in the effort, with proven entrees that include spaghetti and meatballs, chicken pasta alfredo and jambalaya. Word spread, and soon Revolution also was supplying schools in Los Angeles, Colorado, New Orleans, New Jersey, Texas and Washington, D.C. Along the way the company picked up nearly $100 million in private funding, including $30 million from a fund—coincidentally named Revolution LLC— that is run by America Online co-founder Steve Case.
Revolution Foods depends on growing scale and appealing to suppliers’ branding sensibilities to keep costs in line for foodstuffs that are more nutritious, and therefore more costly, than traditional school-lunch fare. Plus there’s the fact that a school-lunch program tends to be a highly dependable customer. “You’d be surprised to see how many CEOs of food companies are totally committed to us,” Richmond said.
The company also is branching into supplying CPG-like products to school districts, such as sauces, in addition to full meals. And after backing out of a major initiative in 2018 to offer its meal kits in refrigeratred form at retailers, Revolution Foods is still considering how it might eventually win in that format.