4 sugar-free brands luring consumers into healthier snacking
Conscious Chocolate, Perfect World Ice Cream, JimJams, and D’vash make no-added-sugar indulgent products for consumers in the US, Europe and Dubai. Founders reveal the road to market, expansion plans and equity growth on the horizon
The high sugar content found in everyone’s favourite indulgent snacks inspired the creation of British brands Conscious Chocolate, Perfect World Ice Cream, JimJams spreads, and D’vash, the US-Israeli range of date syrup.
Tapping into the trend on healthier snacking, these brands have turned to natural sweeteners and gained a place in the ‘better-for-you’ and free-from aisle of grocery stores and supermarkets in the US, the UK, Netherlands and further afield, selling millions of units a year with hundreds of thousands in turnover.
Sharing a common inspiration, the founders of these challenger confectionaries speak to NutritionInvestor and reveal the road to market, expansion plans and investment opportunities on the horizon as they reach five years in the market.
The devil is in the sugar
Sugar reduction is an ongoing effort in the food industry. Science food and nutrition specialist Charlotte Heath says the trend steams from various reasons, from media coverage and consumer awareness of the relation between calorie intake and weight gain to diabetics diets, tooth decay and economic benefits — a sugar tax was introduced in the UK in 2018, for example.
Heath, a former product development executive of Mondelez, explains that energy is the core nutritional value of sugar, and the proportion of it in food and drink products should be kept under control.
“The energy density of sucrose is a primary driver for the reformulation of foods and beverages with low-calorie sweeteners,” she says.
Sucrose, Heath says, has an energy value of 4 kcal/g, and a standard can of a full-sugar beverage contains at least 130 kcal. “This equates approximately 5% of the recommended daily energy intake and 100% of the recommended maximum daily sugar intake recommended by the NHS in the UK,” Heath says.
“Energy is the core nutritional value of sugar, and the proportion of it in food and drink products is a key number to consider”Charlotte Heath, food science and nutrition specialist
For Kevin Bath, founder of JimJams, the 60% sugar content found in the well-known chocolate spread his children love to have on toasts can’t be right for their health, so he embarked on the mission to create an alternative with a better nutritional profile but with the same fantastic taste.
“We were having pancakes one morning with that well-known hazelnut chocolate spread, and I flipped the jar to the side and saw there were 57 grams of sugar per 100 grams — I thought that can’t be right. This is a product essentially marketed to children!” he recalls. Bath’s kids Evie and Jack were eight and five years old, and that morning of 2015 marked the beginning of the family business.
The quest for a suitable sweetener was not easy. Bath explains: “In a chocolate spread you have cocoa powder, skimmed milk powder, an emulsifier, hazelnuts and tons of sugar. We wanted to take all that sugar out and replace it with something else.”
Bath and the family team tried stevia, but with their recipe, it left an odd after-taste and an oil residue on top of the product. “I didn’t look very appealing,” says Bath.
A recipe for success
Here’s where nutritional science meets food manufacturing. Robert Lambert of ingredients specialist Ulrick & Short, says it is relatively easy to replace the sweetness of sugar with sweetening agents, but there is a catch: as sugar is a highly functional ingredient sweetness is not the only factor to consider.
“Sugar also is a key ingredient in volume, viscosity, mouthfeel, structure, colour, aroma, preservation and texture of finished products, and all of these factors have to be considered on a case by case basis,” says Lambert.
For the Bath family, the answer to their no-added-sugar chocolate spread was Maltitol, a natural plant-based sweetener derived from corn or wheat. The sweetener has nearly half the calories of sugar, is kinder to teeth and suitable for diabetics as it has little or no effect on blood sugar levels.
In combination with other ingredients, JimJams has put on the market a chocolate spread with 83% less sugar than any other brand in the category, the company claims.
The next step was to find a manufacturer with the capacity to turn the recipe into a final product. Bath signed a deal with a Belgium chocolate manufacturer. “This has been an additional challenge for us with Brexit, the volatility of that exchange rate, and now Covid-19,” he comments. Five years on and JimJams is still manufactured in Belgium by the same company.
Bath says he took a big leap of faith in this partnership. “The company is a large manufacturer, and obviously it wanted a large minimum order,’ he explains. Bath bought the stock and worked hard to make sure he could sell it.
“The product [JimJams single pots] is also in Costa Coffee, and they have reduced its sugar footprint by 36 tons a year”Kevin Bath, JimJams founder
It was a safe jump to the market, and the Great Taste Award the JimJams’ hazelnut spread won in 2015 pushed the brand even further. Bath secured a listing in Ocado in January 2016, and today the brand is sold in all major supermarkets across the UK. The brand is also in the US through the supermarket chain Publix and in Dubai’s Spinneys. Online sales are coming from the company’s e-shop and Amazon.
JimJams’ flagship 350-gram jar hazelnut spread is the brand’s best-seller to date. The range is complete with milk chocolate, chocolate orange, snack-bite dippers, and the vegan version of the chocolate spread and choco-mint combination.
“We have also launched peel-back singe pots for the foodservice and hospitality market,” Bath says. “The product went into the Hilton hotels in 2019, and they took Nutella out!” says Bath, adding the hotel chain has since reduced its sugar footprint by six tons a year. “The product is also in Costa Coffee, and they have reduced its sugar footprint by 36 tons a year,” he adds.
A sales machine
JimJams started as a self-funded business. Bath put all his savings in the making of the company. “That’s all gone,” he says. The money went into branding, food shows and stock.
The business carried on with a start-up loan and the support of the Grocery Accelerator, the mentoring company now operating as Mission Ventures.
At the end of the accelerator programme, Bath pitched the business in a room full of investors, and he agreed to give equity to two of them: Wealmoor, a food company part of Lotus Flowers, and LSG Ventures, a venture capital firm of an Italian family.
Paddy Willis, chief executive of Mission Ventures, is convinced that Bath has done it right. “What’s interesting about the chocolate spreads made by JimJams is they taste as good as the competition and are able to compete at a similar price point,” he says. “With fun branding full of personality, it makes them a compelling proposition for families.”
JimJams’ sales numbers have been 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 are in $680,000 now. We’ve grown over 40% year-on-year,” says Bath, commenting on the UK sales alone. Bath says JimJams only sells the dippers in Dubai, and without any marketing, campaign sales have gone up by 20%.
Challenger brands start life with a purpose, and for Willis, this is very evident in the genesis of JimJams. “What makes this an interesting investment is that JimJams has the potential to continue chipping away at the market share of the incumbents, and with an increasing focus on ‘healthier’ — not least as a result of Covid-19 — they have the scope to scale and achieve a market position that is sufficiently irritating to the market leaders,” he says.
For Willis, JimJams is at a turning point. “This leads to either an offer to acquire from one of these companies or from someone else keen to build out that market share further as a complementary brand to their own portfolio, be that a trade buyer or a private equity fund,” he explains.
Bath, a former Royal Navy officer, boasts the discipline and hard-word spirit to move the business forward. “We were in talks to enter markets in Scandinavia and the Netherlands before Covid-19. We can branch out to EU, and I think with the vegan spread can be a winner,” he enthuses.
Next page: Perfect World Ice Cream.