Investments

Turning Over Grocery Store Shelves for the Modern Consumer; Introducing Buffalo Market

Nicole Johnson, Partner

Fall 2021

5 min read

There is an unhealthy amount of inertia in the $800B U.S. grocery market.

It gets me the most in the breakfast aisle. Picture the aisle and think about the space cereal takes up; maybe one of seven or eight aisles at the store, and wall-to-wall with legacy brands loaded with sugar: Fruit Loops, Frosted Flakes, Cap’n Crunch, and Lucky Charms, all high-sugar, high-starch, and highly processed—the quick breakfast most of us grew up on, but have slowly realized is not in our health’s best interest.  

Merchants are getting smarter and embracing a new wave of brands that are better for you—healthier, more sustainable, and good for the world; but it’s not a simple process for retailers or small brands themselves to unseat legacy behemoths and scale better-for-you products to the masses.

U.S. food distribution is a manual and massive $700B industry. Within this category, direct-store delivery (DSD) is an attractive channel, currently making up 25% or $170B of the whole industry while netting 52% of profits. While DSD is a great channel for food from a velocity and growth perspective, it has also been historically inefficient for brands to scale via small DSD fleets and distributors, who represent 67% of the total number of active firms in the sector but only command 6% of revenues. 

Enter Buffalo Market , a modern, mission-driven food & beverage distributor making DSD a viable option for scaling brands. With Buffalo Market, brands get DSD and near-daily merchandising services that keep brands moving and expanding, while retailers get access to some of the fastest growing and most world-positive brands, like Inked Breads , Happy Egg Co , CHERRiSH , and GURU Energy —better-for-you brands in the path of progress, each speaking to evolving tastes of the modern consumer. 

We believe Buffalo Market’s asset-light platform has the potential to transform DSD through the powers of aggregation and automation, offering small fleets a turbo-charged and more efficient way to do business—with a lower carbon footprint to boot. For scaling brands, Buffalo Market makes DSD a feasible channel, alleviating the cost-and-time-prohibitive need to manage and scale small distributors on their own.

Launched 2021, Buffalo Market is already distributing, stocking, and merchandising 700+ stores belonging to marquee retailers in California, Nevada, Oregon, and Arizona. These include large players like Costco, Walmart and CVS, as well as smaller, influential grocers like Erewhon Market. With burgeoning demand, the Buffalo team has remained highly selective about the products it chooses to distribute, with a commitment to high-growth, ready-to-scale brands in the “better for you” space—the fastest-growing CPG segment, representing a roughly $33 billion opportunity, or 5% of the overall market. 

The Buffalo Market team is led by visionary co-founders Adam Olejniczak and Sean Howell, both of whom care deeply about the F&B sector. At Forerunner, we were immediately impressed by the team’s ability to execute during the pandemic. They made a strong pivot during Covid-19, and achieved breakout growth in short order, while also notching top customer satisfaction ratings. The core team blends tech expertise with DSD industry know-how, which is why we believe Buffalo Market can become the market-leading, modern, mission-driven food and beverage distributor.

We couldn’t be more excited to co-lead Buffalo Market’s Series A with our friends at Construct Capital as the company gears up to usher the next wave of F&B brands onto shelves, bettering our breakfasts and everything else we put into our bodies.

For more information on the shift to health, visit buffalomarket.com .

  • DATE

    Fall 2021

  • READ TIME

    5 min read

  • Perspective Type

    Investments