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NEW STARTUPS
☕️ Cartel Roasting
Life’s too short for sh**ty coffee (LINK)
🧑🏭 GigMarket
The community-driven version of task rabbit, with $10M in GMV (LINK)
🔋 Infinicell
Developing next-gen batteries for EVs and Iron Man suits (LINK)
KETCHUP KINGMAKERS
Last week I shared a story about a time years ago that I dismissed a couple of founders that came to my university to lead a discussion around their upstart ketchup brand, Sir Kensington.
A younger me thought: ‘Ketchup? That’s basically a commodity - a race to the bottom, and they’ll get squashed by Heinz & Hunt’s.’
Three years later Unilever acquired that ketchup brand for $140M, and I had to admit that I was wrong about Sir Kensington.
Craft versions of consumer goods typically only appeal to <10% of the population. However - thanks to digitization and a strong logistics network in the U.S, they’ve had a wave of success in the modern world.
When you’re product only appeals to <10% of the population, it’s tough to get by only selling locally. But with targeted digital marketing and concentrated online communities, producers of craft products can cobble together a core customer base across the country.
This has created several craft product waves:
2000-2010: Craft coffee
2010-2020: Craft beer
2015-2025: Craft ketchup/condiments
2025-2035: ?????????
History doesn’t repeat itself, but it often rhymes. So what could be next?
FLOUR POWER IS GROWING
For those plugged into the baking world, one of the leading answers is flour.
I talked to Kevin Morse, the founder of a premium flour bursting with flavor - and demand. Kevin founded Cairnspring Mills 7 years ago, building a single production mill facility using just a $90k loan.
Kevin took a look at the flour industry, and saw a huge opportunity with a chance to improve the lives of farmers & soil. America was once a land of hyper-local flour production - in the 20th century around 20,000 local flour mills dotted the vast majority of the U.S.
As industrialization took hold, small producers were bought out - or forced out - by larger players. The consolidation of producers is astonishing by the numbers…
In 2025, there are now just 10 manufacturers of flour in the U.S. - and the top 4 control 87% of the market.
Kevin, who recently turned 60, saw this consolidation play out before his own eyes.
But what he noticed is that the large players focused on one thing, and one thing only: price.
The flour production industry had become a race to the bottom, and none of the big guys were concerned with quality, or differentiation of the actual product.
While the efficiencies of scale made flour extremely affordable, the processes they used to get there stripped the flour of nutrients & taste.
BRINGING STONE MILLING BACK
Large flour producers use a process called industrial rolling milling; in fact 95% of flour in the U.S. is produced with this method.
In this process, grains pass through a series of steel rollers that spin at high speed. Each cycle through strips away different parts of the kernel:
The bran (outer fiber layer) and germ (oily, nutrient-rich core) are usually removed.
What remains is mainly the endosperm, which is then ground into a fine, consistent white flour.
The end product has a long shelf life but loses many of its natural nutrients.
On the other hand, Cairnspring Mills utilizes a European-style of stone milling. Grains are slowly ground into flour between two stones - all parts of the grain are included and the process doesn’t emit as much heat (which can burn off nutrients).
Stone milling is considered the gold standard for flour production, and is often favored by artisan bakers.
Cairnspring has cultivated a strong following of respected culinary figures, including celebrity baker (and co-founder of Tartine) Chad Robertson.
FROM TRACTOR TO TRACTION
Celebrity chef endorsements are great, but Cairnspring has something much more important - traction.
Kevin’s one flour mill has sold out their entire production capacity for the past two years, and he’s had to turn down big accounts because of their supply constraint.
Kevin’s team figured out how to squeeze in an extra two shifts over the weekend to throttle up production, but they have more ambitious plans in mind. Specifically a new milling facility.
Cairnspring’s 1st mill is maxing out at 7M pounds of high-quality flour. The new mill will be able to churn out 110M pounds of flour, increasing production capacity by over 15x.
The extra production is coming online in phases, but Kevin expects it to increase revenues 8x over the next 5 years, from $7.2M → $48.8M.
Large production expanses add a lot of fixed costs to the balance sheet, which can make them risky expenditures. A large expansion when demand is not there can wreak havoc on a small company.
Luckily, tens of millions of pounds of flour at the new facility are already reserved by Patagonia (I had no idea they made crackers) and other large customers of Cairnspring Mills.
Cairnspring is not yet profitable as it currently invests in growth, although their 1st mill is EBITDA positive. Looking ahead, projections indicate that they will hit profitability if the new mill can ramp up to just 55% of its full capacity.
Given the pre-commits they’ve received from large customers, this seems well-within reach in the next few years.
CROWDFUNDING ROUND
Cairnspring Mills is raising funds on Wefunder at a $21.15M pre-money valuation.
Often times, the performance of a raise is a great indicator of how passionate the customer base is about the company.
Companies that raise a ton of money from the customers = a beloved product & brand.
Below are rough guidelines of how I personally view consumer-oriented companies based on the number of investors that participate:
0-50: No community or brand love, mostly just family and friends
50-100: Normal for crowdfunding, although no alpha here from others
100-150: Normal, starting to show signs of a passionate community
150-250: Impressive, there is clearly a community around this company
250-500: Okay people love this thing
These may seem like very small numbers, but you have to remember that very few people have the means or desire to invest in startups. To get them to do so, they have to LOVE your company.
Cairnspring Mills has over 600 investors participating in their investment round.
This is an incredibly strong signal. Reading the ‘why I invested’ comments, it’s clear that many of these investors are customers of Cairnspring and love the product.
EARNING A RETURN
To me, Cairnspring comes with tradeoffs. I believe it to be less risky than a software company with zero revenue; clearly they have product-market fit after selling out of inventory two years in a row.
However, the reduced risk comes with less upside. There’s not a large chance that this will return anything above 8-10x for investors (they’re targeting 3-5x in a few years).
That could still be a great return - what I’m more so getting at is this is not the 1000x moonshot that will retire you and your kids.
And that is totally okay - just know what kind of investment you’re signing up for if investing in Cairnspring Mills.
The other note here is that Cairnspring plans on offering a secondary sale opportunity in the coming years, as indicated by their response to an investor question:
“…our primary goal is to provide a secondary sale opportunity to existing investors. We plan to raise additional funds for our future third mill, and plan to offer a secondary sale opportunity for current investors when we raise funds for the third mill construction.”
What this means is that investors in this round could potentially sell their shares to new investors, at a price set by Cairnspring Mills. I think this is a really smart strategy by Cairnspring - most retail investors don’t have the patience to wait 10 years to see a return on their investment.
Doing a secondary sale can bring them along for the ride, but give them the option to get liquidity earlier on if they choose.
To me, Cairnspring checks a lot of boxes - it often works in your favor if you simply back products/companies that people love. Strong demand for your product is what I find to be the most challenging part; after that you just need average execution to make it really successful.
If you want to check out Cairnspring Mills’ Wefunder round, I’ll link it below!
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