Eclipse Foods scoops up more than $40M to invest in plant-based dairy

When Aylon Steinhart and Thomas Bowman first formed Eclipse Foods, they had big plans to truly remake plant-based dairy.

They launched their ice cream in late 2019, with the plan that their creamy dessert would first win over restaurant diners, then spread into retail and other dairy products. The pandemic spoiled those plans, leading Eclipse to change its go-to-market strategy with an early emphasis on direct-to-consumer business, leading to retail stores.

But the pivot worked, with Eclipse’s distribution increasing 2,100% year-over-year. And with pandemic-related dining restrictions falling away, foodservice is back too. Eclipse announced last week that its ice cream is the starring ingredient in the first plant-based milkshake on a nationwide restaurant chain menu at Smashburger.

Today, the company announced its more than $40 million Series B funding round. CEO Steinhart said Eclipse will use these funds to expand distribution of its ice cream, work on marketing and messaging, and invest in R&D to help it go from a plant-based ice cream company to a full-service plant-based dairy provider, with products in several different categories.

“This is Eclipse as a platform,” Steinhart said. “It’s a dairy platform for creating basically any dairy product. We’re exceptionally excited about our ice cream product that’s in market today — and there’s many other things in the pipeline.”

The funding round was led by Sozo Ventures, a firm with strong ties to Japan that Steinhart said will help Eclipse eventually expand into the Asian market. Forerunner Ventures, Initialized Capital, Gaingels and KBW Ventures also participated in this round, which Eclipse says brings its lifetime funding to more than $60 million.

Steinhart said that while Eclipse is still building its name as an ice cream brand, the company plans to launch completely different plant-based dairy products starting at the beginning of next year. He believes the funds could help Eclipse transform the plant-based dairy segment because its process and products are different than those of its competitors. Steinhart pointed out that nearly seven in 10 people are lactose intolerant, and Eclipse uses its technology and formula to make something that it said is more like traditional dairy than anything else plant-based.

“A lot of people are gonna say, ‘[Eating] it also felt better on my stomach. And it didn’t require any sacrifice,” Steinhart said. “And, ‘It changed the way that I thought about what plant-based means.’”

The secret sauce: Chemistry and manufacturing

Unlike other plant-based dairy companies, Eclipse didn’t start out wanting to turn a single ingredient into a dairy substitute. Instead, Steinhart said, it started out with the desire to put together a basic platform that could be used to remake many dairy products.

Eclipse’s formula blend of cassava, potato and corn is part of the secret of its success. Steinhart said it can give products a similar taste, texture and mouthfeel as dairy counterparts. The same blend works for any plant-based dairy product.

The reason this blend works so well as a stand-in for dairy goes beyond the way that the ingredients come together, Steinhart said. The blend can actually be made to behave like dairy. Casein proteins naturally organize into large clumps called micelles, which gives dairy a lot of its taste and function. Steinhart said he and Bowman realized if they could make plants form micelles, they could unlock many of the secrets of dairy.

“And that’s exactly what we did,” Steinhart said. “We figured out a mechanical process. It’s not like expensive biotech or anything like that. It’s a mechanical process with plant components.”

Before he started Eclipse, Bowman worked at Eat Just, which was known at the time as Hampton Creek. He helped the company design its former lines of plant-based mayonnaise and dressings, as well as cookie dough. Bowman had experience using plant protein to make something completely different, and working with it so it could scale. 

Steinhart said Bowman literally stumbled on Eclipse’s process one day when he was mixing together a blend of ingredients. The mixer made sounds that were more clunky than the whirring he expected, and Bowman found that the blend had literally separated into curds and whey, which is a common function of dairy.

Bowman soon realized that he hit the jackpot by finding the plant-based blend and process that could create an entire line of dairy alternatives. Better yet, Steinhart said, it was made with relatively inexpensive ingredients and known processes. Eclipse would be able to take its ingredients to any processing plant that makes the dairy equivalents and could have its plant-based version made.

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“This is Eclipse as a platform. It’s a dairy platform for creating basically any dairy product. We’re exceptionally excited about our ice cream product that’s in market today — and there’s many other things in the pipeline.”

Aylon Steinhart

Co-founder and CEO, Eclipse Foods

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This versatility, he said, helps Eclipse compete with dairy ice cream on price. For consumers to buy food products, he said, the most important aspects manufacturers need to meet are taste, price and availability.

“Our goal is to take substantial amounts of market share from conventional dairy,” Steinhart said. “And the only way we’re going to be able to do that is if we can also win on price at a healthy margin. And the way we’re going to do that is by having a process that is really, really effective.”

But this doesn’t just work for Eclipse’s ice cream. Steinhart said that all of the other items the company has made, which range from cream to cheeses to beverages, can also be processed and produced in the facilities that make the dairy versions.

Everyone loves ice cream

Eclipse has successfully turned its plant-based dairy base into all kinds of products, including many kinds of cheeses, cream, desserts and yogurt, Steinhart said. In fact, the company has talked about its cheesemaking ability since 2019. 

Although it has these abilities, Steinhart said there are some very clear reasons Eclipse decided to launch its brand in ice cream. It’s a dairy product that stands on its own. Cheese, butter and cream cheese are popular dairy items, but the majority of the time, consumers eat them with something else.

Ice cream is also something that consumers everywhere feel passionate about, he said. It’s the type of food item that people will stand in long lines to get in all kinds of weather. Ice cream “occupies a lot of mind space,” Steinhart said, and noted that a consumer’s good experience with the Eclipse ice cream may help smooth the path to trying more items from the plant-based dairy brand.

“People just don’t trust that the products are going to taste very good,” Steinhart said. “And so we said if we set out and create one of the best ice creams that someone has had, plant-based or not, then they’re going to trust us for their milk and their yogurt and their cheese and all these other products.”

As ice cream sales and distribution have grown, the brand has become a well-known quantity in both frozen desserts and the plant-based segment. Steinhart said a big part of this is because Eclipse is so focused on creating a superior and creamy plant-based ice cream. A blind taste test conducted by a University of California – Berkeley professor compared Eclipse to one of the top-selling dairy ice cream brands, and found that 73% considered Eclipse to be as creamy as the dairy version, Steinhart said. 

Steinhart said Eclipse’s success in taste tests and in foodservice shows that it is taking the right approach. The company wants to beat dairy at its own game, he said. Steinhart said there’s incredible white space for non-dairy ice cream — only 3% of options are plant-based — and increasing exposure to the category both in foodservice and restaurants can help grow its market share. Plant-based milk is the most mature category in the segment and captured 16% of all milk sales last year, according to SPINS, the Plant-Based Foods Association and the Good Food Institute. However, more than eight out of 10 consumers are still choosing dairy milk.

But plant-based dairy as a whole is progressing. Steinhart likened it to the move toward electric-powered cars. Today, there aren’t many electric vehicles on the roads, but automakers around the world are developing and building them, and cities and businesses are investing in infrastructure to charge them. It’s beginning to seem like an inevitable change, and the question isn’t whether there will be more electric cars on the road, but when it will happen.

“It’s that inflection point, and I think plant-based dairy in general is getting to that inflection point,” Steinhart said. “I think that we will keep releasing products that help the market get to that point.”