Cleveland-based private lender funds the country’s fastest-growing sauerkraut and fermentation brand.
Encore Funding, a Cleveland-based private lender launched by entrepreneur Joel Adelman, has forged a strategic investment relationship with Cleveland Kitchen, the nation’s top premium sauerkraut and fermented foods brand formerly known as Cleveland Kraut. The two organizations will work together to meet skyrocketing market demands and accelerate organic growth.
Founded in August 2020, Encore has already committed tens of millions of working capital to the middle market, with almost half of those dollars remaining in Cleveland. Beyond working capital, the firm’s principals offer portfolio businesses the strategic support needed to make critical decisions and reach the next stage of success.
The collaboration with Cleveland Kitchen allows the Encore team to flex their seasoned expertise in the retail industry. Additionally, the investment will drive job creation and support farms and chefs across the region, further underscoring the firm’s “entrepreneurs serving fellow entrepreneurs” philosophy.
“When we evaluated this opportunity, Cleveland Kitchen displayed nothing but high performance with doubled growth year over year,” said Matthew Williams, Vice President of Encore Funding. “They are a niche, value-based business with the capacity for substantial growth and positive economic impact. It’s a perfect match, and we look forward to helping them realize their goals.”
With their world-class krauts and salad dressings in over 9,000 stores across the country, Cleveland Kitchen has been on an impressive growth path for some time. The company, which got its start at the North Union Farmers Market, now employs 40 people and manufactures products in a 30,000 square foot commercial plant in Cleveland. Most recently, they launched a line of vegan Kimchi with recipe development alongside chefs from the Cleveland restaurant, Korea House.
While they’ve reached significant milestones, Cleveland Kitchen leaders aren’t slowing down anytime soon. They plan to expand their fermented product lines and distribution channels; however, the culinary supply chain isn’t as responsive with cash flow. Capital investment was necessary to fund R&D, create new products, and build upon their team and facility. Thankfully, Encore had an appetite for meeting their needs.
“We talked to big firms from Los Angeles and New York City, but Encore spoke our language from the start,” said Drew Anderson, CEO and Co-founder of Cleveland Kitchen. “They have a highly experienced, responsive team that understands cash flow challenges specific to retail. At any moment, I can pick up the phone and speak directly to an expert like Joel or Matt who offers advice, resources and connections. That’s extremely rare to find, yet invaluable to a business like us.”
As part of the strategic investment, Cleveland Kitchen retains full ownership of the business. Encore won’t obtain any equity because, ultimately, this relationship is about more than quick wins and monetary gains.
“We’re not a one-dimensional capital partner,” said Williams. “We believe in their vision and are just as invested in their success as they are. This is a long-term collaboration, and we’re thrilled to be along for this exciting ride.”
Learn more about Encore’s lending opportunities here.