Raise cash or sell: Riot’s $1m reality
Riot Foods, a paleo food company part-owned by former The Bachelor New Zealand reality television star Art Green, is reportedly in financial trouble just over a year after co-founder and former Blackcap Mitchell McClenaghan walked away from the business.
Riot Foods co-founder Ryan Kamins informed its shareholders in a letter that it needed to raise $1 million in two weeks, or sell the business, following ‘‘significant challenges’’ with its factory after damage to the facility caused it to miss production deadlines.
‘‘The damage caused in a recent incident at one of our manufacturing sites resulted in damage to our machinery.
‘‘This has had a significant impact on the production of our products and, in turn, has affected our sales in Australia and New Zealand,’’ he said.
Riot Foods, which owns the CleanPaleo brand, was founded by Green, McClenaghan and Kamins and owned by the trio between 2013 and 2017.
But Companies Office records show McClenaghan sold out of the business in August 2017, and he ceased acting as a director for the company in October 2016.
Riot Foods, which sells products including protein powders and muesli through retailers such as Countdown, has had multiple crowdfunding campaigns.
In its most recent campaign in March this year it raised $1m through PledgeMe to hire more staff.
McClenaghan was not able to be reached for comment.
Kamins said in an email: ‘‘Riot Foods is exploring all possible options to secure additional funding to improve our productivity and efficiencies, as well as provide the necessary capital to execute our revised business plan and forecasts.
‘‘Riot Foods is exploring all possible options to secure additional funding.’’
Co-founder Ryan Kamins
‘‘September was the best financial result that Riot Foods Group has had in over a year, which demonstrates that the plan is working.’’
Kamins did not comment on why McClenaghan left the business, nor provide details about the alleged damage to the factory.
Riot Foods claims to supply more than 250 major supermarkets, producing from a ‘‘glutenfree manufacturing facility’’ and exporting to the United States, Australia and Singapore.
The PledgeMe crowdfunding campaign stated the company had revenue of $1.4m in its 2017 financial year (up from $860,000 in the previous year), and forecast revenue growth of 50 per cent to $2.1m in the 2018 year.
It was also forecast to generate sales of $7.4m by 2020.
Green, McClenaghan and Kamins met while playing extras on the hit television series Spartacus, which was filmed in New Zealand and screened from 2010 to 2013.
At the company’s launch McClenaghan told Stuff that, after undergoing hip surgery and putting on weight, he started eating paleo to supplement a new workout routine.
‘‘I lost 12 kilograms at that point and was in the best shape of my life.’’
McClenaghan then introduced the diet to Kamins, who was suffering from depression and wanted to improve his mental wellbeing. Kamins decided to make a cereal that did not contain wheat, grains or sugar.
McClenaghan and Kamins then founded CleanPaleo to take the product to market, after which Green came on board, having been a personal trainer in Western Australia.