The founders of seven brands backed by social impact investors share insights on making nutritious snacks for school kids
By Murielle Gonzalez
Good Food Fund, the accelerator and venture fund set up in the UK by Big Society Capital and Guy’s and St Thomas’ Charity, has taken on seven snack brands aimed at tackling childhood obesity among low-income families.
Earlier this month, Mission Ventures, the company executing the accelerator, announced the brands in the fund, all pre-seed or early-stage companies. These are Insane Grain, JimJams, Naturelly, Snackzilla, Lexi’s, Nombots, and Rootles; the latter three have not yet launched.
These businesses have been selected based on their ability to provide good-tasting and healthier alternatives to mainstream snacks that primary school-aged kids consume today.
“The most important thing for Big Society Capital and ourselves will be achieving our desired social impact,” says Matt Towner, portfolio manager at Guy’s and St Thomas’ Charity.
Towner notes that the investors were looking for brands that can impact childhood obesity by substituting other less healthy products out of children’s diet. “These products should be affordable to all families, rather than being premium brands,” he says.
NutritionInvestor has gathered the seven founders, and in this report, they talk about the snacks they make and the plans to move their business forward.
Snackzilla: Plastic-free on-the-go snacks
Marieke Syed founded Snackzilla in 2018 as an on-the-go snacks brand for kids ranging five to 13 years of age. “As a mum of two boys aged nine and seven, I found there was a lack of healthy snack products that appealed to my kids’ age group that were better for them than the high sugar, junk food they craved,” she says.
For Syed, families need convenient products that could easily be chucked in a sports bag or a lunchbox. “With an obvious gap in the market, I decided to do something about it!”
Snackzilla launched in December 2019 with products hitting the market earlier this year. The brand comprises a range of chewy oat cookies in raspberry, vanilla and chocolate flavours, wrapped in plastic-free compostable packaging.
“We have seen great feedback from kids and high repeat customers,” says Syed, adding that since the launch, Snackzilla has consistently been in the top 10 kids biscuits sold on Amazon.
What is so special about Snackzilla? For Syed, the great feature of these cookies is having 40% less sugar than the average sweet biscuit. “These cookies are school compliant and also a source of fibre, suitable for vegans and with no palm oil or artificial colourings, flavourings or preservatives,” she says.
Syed is convinced about the positive impact Snackzilla can have to help tackle childhood obesity across the UK. She believes the brand has what it takes to become a firm family favourite.
“As a mum, I know how hard it is to juggle the pester power from our kids with the need for convenience and the guilt of wondering if we are giving them the right things to eat,” says Syed. “With Snackzilla, we aim to make snacking a bit easier, giving kids a healthier version of something they love.”
Syed is running the business after two decades of work experience in leadership and operation roles in the private and not-for-profit sectors. Most recently, she served as the operation chief of London Craft Week.
Snackzilla was a finalist in the Best Children’s Product at the World Food Innovation Awards 2020.
Lexi’s: The revival of a childhood favourite
Lexi’s is the youngest brand in the cohort. Alexei Khatiwada founded the company last November after quitting his job at Barclays. He gave up a 10-year career in banking to pursue a dream: to run his own business.
A self-confessed, lifelong snacker, Khatiwada admits he has always struggled to find snacks that are genuinely satisfying and low in calories. He decided to try and create a snack that ticks all the boxes, and thus Lexi’s was born.
“I found that healthier products were often expensive, high in calories and lacking the exciting taste and texture I craved,” he says. “So, I decided to quit a successful career to go on a mission to create the perfect treats myself: low calorie, scrumptious and seriously fun!”
This month, Khatiwada announced on LinkedIn the completion of the first production batch of 32,000 units, which he described as a bunch of “ooey-gooey 99 calorie crispy treats”.
Khatiwada wanted to hit the market with Lexi’s earlier this year, but the Covid-19 pandemic put the launch to a halt. Now that lockdown is being relaxed, he has resumed his plans at full throttle.
He has been tracking every step of his journey as a businessman, sharing stories and colourful posts on the Lexi’s Instagram account — a clever move from the marketing perspective, as the pre-launch brand is already growing an engaging, early adopter follower base.
“Lexi’s Crispy Treats are a delicious, and a lighter reinvention of a childhood favourite,” he says.
The range is made of two varieties: triple chocolate and marshmallow. The recipe, Khatiwada reveals, is a combination of crispy puffed rice and vegetarian marshmallow, which together provide all the satisfaction of a mainstream treat, minus the calories. A third flavour, white chocolate and strawberry, is in the pipeline.
Khatiwada also points out that Lexi’s contain half the sugar, fat and calories of typical sweets and chocolates in the market. He explains that products are free from artificial flavours, colours, preservatives or sweeteners.
“[Lexi’s] are widely accessible,” says Khatiwada. “They’re vegetarian, gluten-free and free from 10 allergens, safe for schools and Kosher.”
Khatiwada is gearing up for launching Lexi’s in July 2020. “I hope the accelerator will help me grow the brand, raise product awareness and find exciting new partners who are keen to work with Lexi’s to provide a healthier choice to consumers,” he concludes.
Insane Grain: A ‘super’ snack
The packaging of Insane Grain says it all about the brand: it is colourful and playful. The brand was co-founded by Rushina Shah in 2017 as a range of snacks made of sorghum, the ancient nutrient-rich grain.
Sorghum is a cereal grain that grows tall like corn. It is rich in vitamins and minerals and a source of fibre, antioxidants, and protein.
Shah explains that it all started when she was a little kid. She used to see her aunt making a snack in the kitchen using sorghum. At the time, Shah admits, she knew about the supergrain but didn’t realise how good it was for her to eat it.
“My aunt told me that it was an absolute nutritional powerhouse, packed with vitamins and minerals, a brilliant energy booster, good for bone health and that it promotes healthy blood pressure,” she says.
Shah confesses she didn’t believe her aunt and sent the product for nutritional testing. “I found that she was right!” she says, and reveals the testing confirmed that sorghum has a far better nutritional profile than anything she could find in the market. “It was then that I had my lightbulb moment and decided to quit my corporate job to set this up full time.”
Shah’s journey took her to research further into the snacking category. She soon realised that there was a white space opportunity for a nutritious snack that could be manufactured in such a way that products hit the market at a lower price point.
“We believe that everyone should have the option to choose healthy snacks should they wish to. Price should not be a barrier to this,” says Shah.
Insane Grain comes in three flavours: cheese, salt & vinegar, and salted caramel. Shah claims that products have almost double the amount of iron than spinach, more potassium than a banana, and the world’s first vegan society-approved probiotic.
“Insane Grain gives the consumer gut-health benefits,” she says. “All these properties make the product truly insane!”.
Shah also points out that these snacks are under 100 calories per serving, and that there is no compromise on taste. “[We make sure] that our products first and foremost taste crunchy and melty,” she says.
Insane Grain is priced under £1, and the range is available in Wholefoods, Selfridges, Amazon, in online channels and food boxes. Shah says there are new stockist announcements to come soon.
“We are already seeing a really strong repeat rate of about 40%, which is a brilliant sign that consumers love the taste!” she concludes.
Shah studied philosophy at university and then went to Reckitt Benckiser where she began a career in the FMCG sector as a brand manager.
At Procter & Gamble, Shah spent about five years working on global, billion-dollar brands including Pantene, Ariel Megabrand and Flash. Her experience includes launching new products, pitching to retail buyers, and identifying white space opportunities.
Naturelly: Plant-based juicy treats
Naturelly is an award-winning brand marketing jelly juices for kids aged 2-plus. Products are gelatine-free, hence suitable for vegetarians.
In the market since 2015, Naturelly products come in an easy-to-squeeze pouch, specially created for little hands, and in pots. No matter the packaging, products are boosted with three grams of prebiotic fibre and 100% reference intake (RI) of immune-boosting vitamin C.
Founders Dean and Joanne Dempsey, parents of two, explain the brand was born as a family business out of frustration. “Finding healthy snacks that my daughters enjoyed while out and about was always difficult, especially as the younger one had food allergies,” he says.
The couple managed to make a snack that was healthier and convenient. In 2017, Naturelly took home the Gold prize in the Best Child Snack category of the Loved by Children awards. The brand also won Silver for Best Toddler Snack & child’s drink.
Today, the Naturelly range is available in Sainsbury’s, Waitrose, Ocado, and Wholefoods. Products have no added sugar, no added sweeteners and only 36 calories, including seven grams of naturally occurring fruit sugar.
“Naturelly is also the perfect after school and post sports treat for health-conscious parents,” says Dempsey. “The special jelly we use, called Gellan gum, helps fill children up until mealtime and helps to stop the demands for both a sugary drink and snack,” he says.
The Gellan gum is a gelatine-free, wibbly jelly made from Lily plants. This jelly helps fill little tummies up until mealtime thanks to dietary fibre in the compound.
Like the other brands in the portfolio, Naturelly claims to be free from artificial colours, artificial flavours, and preservatives.
Dempsey is bullish on the numbers supporting the promising outlook for a brand like Naturelly. He explains that 64% of parents give their child a snack or drink after school every day as a treat or reward, but also to keep hunger at bay.
For Dempsey, this data represents a total market size potential of three million children in nursery and primary school children in the UK alone. He also points out that in April 2017 Mintel reported that the ambient dessert category was a £556 million market.
Dempsey’s Naturelly has 15 years’ experience in brand marketing. He has several campaigns under his belt including work for Red Bull, AG Barr’s KA, Heinz and Highland Spring. His wife and co-founder Joanne was a buyer at Liberty, Harvey Nichols and Selfridges.
Nombots: Wholegrain crisps with personality
Tech consultant Umar Raza and school teacher Nargis Shaikh have drawn on their areas of expertise to create Nombots.
The married couple established the brand in 2018 determined to provide children aged four to nine with a healthier alternative to traditional crisps.
“There are so many great healthy crisp brands targeted towards the adult and toddler market but nothing exists to appeal directly to primary school-aged children,” says Raza.
Building on Shaikh’s several years of work experience in schools, the couple knew that to change children’s snacking habits for the better they needed to create a crisp alternative that would not only be nutritious but, most importantly, fun.
For Shaikh, the branding of such a snack should be able to speak to the child directly. “I knew we had to essentially turn something children needed into something they wanted,” she says.
The idea came to fruition with Nombots, a crisps brand that is nutritionally dense, low in saturated fat, a source of fibre, and packed with 244% more protein than any other brand in the market.
“We use wholegrain and lentils,” says Raza, noting that the recipe manages to keep the texture and flavour of crisps that children would be familiar with.
Shaikh and Raza worked with a branding agency who was able to turn all their insights from working with children over the years into a brand that kids will love and enjoy, “shifting pester power on its head”, they say.
As part of the branding, Nombots created robot characters and assigned them personality traits that resonate with children. “It was important for us to build a holistic children’s brand,” says Shaikh, adding that’s the reason robots were chosen. “We want to introduce an educational coding element to equip children with the skills for tomorrow,” she adds.
Nombots is a pre-launch brand and the founders are currently fundraising with plans to kick-off operation later this year.
Shaikh and Raza hope the accelerator will give them a clear route-to-market strategy, avoiding common pitfalls in scaling a food and drink brand. They also want to be able to reduce the cost per unit of products through manufacturing and supply chain efficiencies.
Rootles: The vegetable biscuit
Helen Yates, the founder of Rootles, has stepped into the children snacking arena knowing one thing or two about the bakery business. She spent eight years at the 200-year old bakery company Luke Evans. “Rootles are currently made at the Luke Evans site,” she reveals.
At Luke Evans, Yates worked with Nottingham University Master Business students, and it was there where she first discovered the taste of a vegetable-based biscuit. Yates further developed the concept with food innovation company Froghop to make sure Rootles was fit for commercial production.
Yates says she also wanted to make a snack with a better nutritional profile than any other in the market. She tried to achieve that by reducing the sugar, increased the fibre and increasing the vegetable content.
Rootles is the third pre-launch brand in the cohort. Yates says Rootles will enter the market featuring less than 115 calories per serving and over 40% vegetable content. “Rootles will be lower in sugar than many competitors and high in fibre,” she says.
Yates is bullish on the innovative food she has created with Rootles. “There isn’t a snack brand in the market made with 40% of vegetable content that tastes like a standard chocolate biscuit”, she says.
Upon completing the accelerator, Yates hopes to have given Rootles a complete overhaul, becoming a brand that can contribute to the improvement in childhood obesity by being easily accessible through the mainline supermarkets at an affordable retail price.
JimJams: A family-friendly chocolate spread
JimJams is the brand with the most market experience. Founded in 2014 by Kevin Bath and family, JimJams has secured shelf space in major supermarkets across the UK and distribution in the US and Dubai.
A brand offering hazelnut chocolate spreads, JimJams comprises a range of products that are gluten-free and Sugarwise certified, packing 83% less sugar than any other brand in the same category.
The range includes milk and vegan versions in the popular 530-gram jar, dippers and single pots. As well as the traditional milk hazelnut chocolate flavour, the brand introduced a dark chocolate-orange and chocolate-mint combination, which are also vegan.
The brand has seen sales numbers on an upward trend since year one. Turnover started at £45,000 and went up to £300,000, and then up again to £450,000.
“We’ve grown over 40% year-on-year,” says Bath, commenting on the UK sales alone. Bath explains that in Dubai JimJams only sells the dippers and without any marketing campaign, sales have gone up by 20%. For a closer look at JimJam, read our article featuring four no-added sugar brands.
The Good Food Fund builds on the Healthy Returns report, a comprehensive study that looked at opportunities for market-based solutions to childhood obesity, focusing on the growing number of challenger brands and products in the market, and how they can address the unmet need for healthy, affordable food options for families on low incomes.
Investors and partners in the Good Food Fund believe that the seven brands in the portfolio have the ability to eventually reach an accessible price point that fulfils the brief of assisting the provision of healthier options for low-income families.
The Good Food Fund comprises a business accelerator and financing vehicle, and both have been set up as a pilot programme. If successful, the investors aim to establish a multimillion-pound fund providing brands with investment, market expertise, route-to-market support, and access to infrastructure; a shared kitchen space, for example.
An investment with a social impact
Portfolio manager Matt Towner explains that investors want to test whether the financial and non-financial support provided are effective in helping healthier challenger brands to overcome barriers to scale.
“We are working with an incredible set of initial partners,” he says.
Towner recognises, however, that further partnerships are needed for the fund to achieve its full potential.
“We will need to partner with other foundations and investors. Working across sectors with retailers, FMCG companies, universities and the public sector will also be important,” he says. The charity, Towner reveals, will be building the network over the next year.
To this day, the investors have raised £2.2 million in assets, including £1.5 million of investment funds, which are managed by Ascension Ventures. The business accelerator is executed by Mission Ventures.
Nigel Parrott, director at Mission Ventures, says the accelerator is run by entrepreneurs for entrepreneurs. “Instead of teaching the programme in a cohort, we work with entrepreneurs on a unique 1:1 accelerator process we call the MissionMap,” he says.
Parrott explains the MissionMap focuses on why the business will win in the category through establishing a deep understanding of the consumer need, and then delivering to that target throughout the marketing mix.
“As entrepreneurs ourselves, we understand the need for guidance and input on a 1:1 basis that shapes a long-term strategy,” he concludes.
Date published: 24 June 2020