Ben Arbib, the man behind Rebel Kitchen and Nurture Brands, opens up on what it takes to grow a portfolio of plant-based food and drink products
By Murielle Gonzalez
Ben Arbib has set his sights on plant-based food and drink brands, challenging the industry and engaging consumers with alternatives to traditional products.
Launched a year ago in the UK, his holding company Nurture Brands incorporates Rebel Kitchen, the organic coconut water and dairy-free milkshake brand that Arbib founded in 2013; Ape Snacks, a family-friendly range of healthy snacks he acquired in November 2018; premium crisps brand Emily, a brand acquired in March 2019; and The Primal Pantry, a paleo, high-protein range of snack bars founded in 2013 by nutritionist Suzie Walker. Nurture Brands announced the acquisition of The Primal Pantry this week.
“I had the idea of making a healthier milkshake without dairy,” Arbib says recalling the early days of Rebel Kitchen. The concept was fruitful, and the new food product reached UK shelves in 2014 featuring a blend of organic coconut milk and Somerset spring water sweetened with dates. Coconut milk is known for stimulating weight loss and lowering cholesterol, hence the ingredient’s popularity in the marketplace.
A trendsetter, in 2016 Rebel Kitchen’s first healthy milkshake hit the US market at a time when the dairy alternative category had only kicked off globally. Seven years later, the alternative dairy segment is dubbed “white gold” —according to Expert Market Research, the alternative dairy market stood at US$16.3 billion in 2019, and analysts forecast growth at a 12.3% CAGR rate in the next five years.
Arbib set up Nurture Brands understanding that the consumer, millennials and beyond, care about the provenance of ingredients in the food, and they care that food manufacturing is good for the environment, too. “These topics that were hardly talked about a decade ago are now top of mind,” he says. His views of the market are informed by experience and insights gained at The A Team Foundation, a charity that Arbib started in 1999 alongside his wife, Tamara.
The A Team Foundation has been supporting research and funding projects to understand better the links between food, its production and consumption, and its implications on health and social wellbeing. The Agroecology Fund, Beyond GM and Farming the future are some initiatives with its backing.
Fostered by such a holistic approach, it was only natural that for Arbib the free-from, clean label concept was the linchpin for Rebel Kitchen. He argues that at least 80% of ‘healthy’ brands on shelves don’t necessarily have a nutrition profile that is good for you. “There are lots of hidden sugars, for example, and the packaging is also made to look like the product is healthy,” he says, noting that consumers really trust in the message brands put forward.
Today, clean label is a prime consideration for Nurture Brands’ prospective businesses. “It’s important for me to have organic products in the portfolio. Although Nurture Brands isn’t all organic now, it is the aspiration,” he enthuses.
Being a challenger in the food and drink sector is not easy. Competition is fierce not only because big company names concentrate market share — some of them have been implementing M&A to tap into the healthy category — but the industry’s low barrier to entry means new food start-ups are cropping up.
The M&A tactic is not alien to Arbib. Growth for Nurture Brands, he says, will come organically and through acquisitions if the opportunity arises. “I can imagine there will be a lot of businesses in distress and opportunities to bring other brands on board. Obviously, the circumstances are not nice, but it happens, even without the financial shock [of the Covid-19],” he says. “We would only acquire a complementary brand, one that means health and clean label, a brand that you could retrofit by these values,” he adds.
The acquisition of The Primal Pantry heralds Arbib’s appetite for expansion, as he noted in a press release: “The Primal Pantry becomes our first purchase of 2020 and demonstrates our intent to be a key player in plant-based consumer goods in the UK and beyond”.
Arbib’s capital comes from his investment family office. He admits that when he is looking for M&A opportunities, he can move quicker than others in the market. Still, Arbib points out that having a good relationship with advisors and restructuring companies makes a difference. “We hope to be near the top of their list when something comes up,” he says.
Second to financing, the hurdle that any food and drink start-up need solving in the early stages include sourcing ingredients, supply chain and manufacturing. Arbib says Nurture Brands addresses these issues building on operational scale.
“Looking at the big companies like Unilever, Nestlé, and PepsiCo, for example, it was clear to me that aggregating brands, having the synergies of a central office is the way to go,” he says. Nurture Brands, Arbib explains, has managed to scale-up its operation through a workforce of 20 staff working across the portfolio. Plus, the company works with a manufacturing partner, and on the whole, the business has eight factories in seven countries, and ingredients are sourced worldwide.
However, Arbib admits that growth for Nurture Brands is not coming as planned, and points to working with the grocers is tricky. “The large grocery chains are our main customers, and they are consolidating their ranges across their stores. As a small business you’re not treated the same unless you make a difference to their annual number,” he says. In some cases, this means turning over £10 or £20 million, having £4 million worth of revenue for the grocer.
“It was clear to me that aggregating brands, having the synergies of a central office is the way to go”
Arbib also recognises that price is an issue, but less so compared with a decade ago. “Mainstream health brands were seen as the premium end of the market, part of a rich person’s world. Now, I think that the average person understands that they need to take their health in their hands: they have to eat better, and they have more information available on this, too,” he says.
For Arbib, healthier food doesn’t need to be expensive either. “Today, alternative products on shelves are on par with that of traditional brands. Still, you have to have a price that will sell,” he notes.
Being able to scale-up operations, Arbib says, is the winning strategy here, and that’s proven by the success we see from big companies on the market. He explains: “The big guys have all the advantages: the scale, the efficiencies of the central overhead, the synergies of the logistics, and every part of the business that ultimately gives you a more competitive price of the product that goes on shelves. That’s why I believe Nurture Brands with its scale-up model will get us in the same playing ground as the bigger brands,” he concludes.
Date Published: 2 April 2020