Speaking to FoodNavigator-USA ahead of the Expo East trade show, where Ocean’s Halo will be showcasing Pho broth, its latest SKU, co-founder Mike Buckley said he had been blown away by the traction the broths had generated since he started pitching them to retailers at Expo West in March.
“Bone broth has generated some excitement, but apart from that, when is the last time you walked down the broth aisle and said, Ooh that looks interesting” he told FoodNavigator-USA.
“You find dozens of ramen noodles in stores, but where’s the broth to pair them with? We’re on trend [he cites a steady rise in Google searches for ‘Pho’ and ‘Ramen’ in the US in recent years], in a high unit moving category and we’re bringing something different and innovative. And this is a one-billion-dollar-plus category, so there’s big potential here [Nielsen all-channel data supplied to FoodNavigator-USA shows the US broth category grew 2.9% to $1.1bn in the year to July 1, 2017].”
If you produce this, we’ll stock it…
Co-founder Robert Mock added: “We did some behind the table testing at Expo West and had a lot of people basically say wow, if you produce this, we’ll stock it… the taste is amazing and you guys are bringing nutrition to the broth aisle, which is really nutritionally bankrupt – no protein, no vitamins and a ton of sodium. Since then we’ve been scrambling to get it on the shelf.
“Even though the recipe is made in kitchens at home and restaurants across the country, we know of no [other seaweed-based broths on the US market], which is exciting. We expect competition simply based on our experience with prior launches of our chips, snacks and strips.
“We produced it about 30 days ago and we’re already on shelf at every Sprouts store, and it’s been shipped to Walmart, Whole Foods, Albertsons and Safeway nationwide. I can safely say we’ll be in 5,000 stores in the next month or so, and by the end of year we could be in 10,000 stores. We’ve also had interest internationally.”
The shelf-stable broths – packaged in TetraPak bricks with an MSRP of $3.99, putting them on a par with organic chicken or beef-based broths – have a seaweed (kelp) base “but don’t taste of seaweed,” a small amount of protein (1-3g per serving) and high levels of iodine and vitamin D [kelp is highly unusual as it’s a vegan source of vitamin D, along with mushrooms], he said.
Bay Area-based New Frontier Foods was founded in 2011 by four dads on a mission to turn seaweed into the next kale. Today it sells organic seaweed snacks, strips, sheets and broths in stores from Whole Foods to Walmart under the Ocean's Halo brand.
The snacks are made from an USDA certified organic seaweed commonly known as gim in Korea and nori in Japan that is sustainably harvested from ocean farms off the southwest coast of Korea, sun-dried and interwoven using traditional screen dehydration methods, and then shipped over to the US where it is roasted, seasoned, and packaged into snacks in an USDA Organic and SQF certified facility in southern California, which opened in 2016.
Most seaweed snacks sold in the US, by contrast, are packaged in South Korea or Japan, says Ocean's Halo co-founder Robert Mock. “The US-facility [a joint venture] has allowed us to ship in bulk, raw material instead of feather-light finished product, reducing trans-Pacific container shipments by almost ten-fold. It was a big investment for the company, but we knew we could fill the capacity by doing private label in addition to the Ocean’s Halo brand. We went to top five retailers in the US and won four out of the top five private label accounts.”
Bringing seaweed into the mainstream
Unlike the company’s snacks, the broths don’t shout about seaweed on the front of the pack, and instead promote the Ocean’s Halo brand and the flavors: Miso broth, Ramen broth, Thai Coconut broth, Pho broth and Veggie broth, while the benefits of seaweed are highlighted on the side and back of the pack, along with recipes.
“Our goal at Ocean’s Halo is to bring seaweed to mainstream Americans and make it more of a staple because it is so good for you, full of vitamins and minerals and little bit of protein, but we also want to make them accessible,” said Mock, who believes the broths tap into the trend for more ethnic and authentic recipes and the desire for protein in a broth (as evidenced by the bone broth craze).
“So with the kombu, for example, retailers we spoke to advised us to go with ‘veggie broth’ to begin with. If it really takes off, we can always go back and label it kombu,” added Mock, a former financier with a passion for seaweed, who says investors who supported the brand via its initial $1.7m financing round have also supported subsequent rounds in the form of convertible notes.
“Through one of our key investors we were also able to get debt financing recently to launch the broth. I think what’s giving investors comfort is that we’ve shown we can really innovate. And when we do things, other people copy us, which shows we’re doing something right.”
Seaweed, in its various forms, is “one of the planet’s most nutritious and sustainable crops,” says Ocean’s Halo, as it’s loaded with vitamins and minerals – including those that are typically only found in animal-based foods such as vitamin D and B12, but requires no land, fertilizers, pesticides, or fresh water to grow (typically, cultivators set out large nets impregnated with spores of seaweed and lay them out on the surface of the water. Seaweed is then ready to harvest in as little as 15 days).
Ocean’s Halo also incorporates compostable packaging where possible, including desiccants and bio-based caps for its broth. It also plans to re-introduce a compostable, corn starch tray instead of plastic later this year for its seaweed snacks.
Ocean’s Halo Ramen broth is made from organic kelp, soy milk, bean flour, tamari (soybeans, salt, alcohol), organic sesame oil, natural flavors, sea salt, garlic puree, ginger juice, and mushroom powder, and is an excellent source of vitamin D, E and iodine, with 1g of fiber and 3g protein.
Triple digit growth
The snacks side of the business, meanwhile, is generating triple digit growth, said Mock, who launched the brand as a novel baked seaweed chip but later focused on more traditional roasted seaweed snacks, followed by seaweed strips laced with layers of chocolate, coconut and almonds – a good entry point to the category for consumers unsure about the taste of seaweed.
While the chips attracted a loyal fan base, and generated a lot of free PR given their novelty, they were “also painstakingly difficult to produce perfectly,” said Mock, who says they may come back at some point.
The seaweed strips - launched in 2016 – “have resonated in the market so well that our competitors have introduced their own,” meanwhile. “We are OK with this, it simply grows the category, which is important to our mission of seaweed becoming more mainstream in the US market.
“Our triple digit growth rate in part [reflects rapid] distribution growth of our brand, yet thankfully we see our same store units/store/week [velocity] grow incredibly fast. From blind taste tests, we know our seaweed snacks are best in class, and that is driven primarily by our differentiation. Our snacks are organic, Non-GMO, gluten-free and vegan… while we also use healthier oils, and offer delicious and unique seasonings, which allow us to use less salt.
“We point to our company's mission and love to tell our story, but I think taste drives our success.”
You learn humility pretty quickly in this business
He added:“We’ve made a lot of mistakes and you learn humility pretty quickly in this business. But one of the things we got right was the brand, the packaging, and the mission, it means something to consumers and it means something to us.
“We see seaweed as a huge growth ingredient outside of just snacks. This is one reason we launched our broths, and we have some exciting new products in our pipeline that are also far from the snack category.”
As for the mainstream potential of seaweed, he said: “If you go into Whole Foods, seaweed snacks are next to potato chips now; they’re becoming a mainstream snack for sure in natural. In conventional, you see them in the ethnic and Asian aisle, but the fact that our #1 seller – the seaweed sea salt snack – is now in every Walmart in the United States, really tells you something.”
So have the founders been fielding calls from big food brands keen to get a slice of the seaweed-fueled snacking revolution?
“There's definitely a buzz around this category and we’ve had offers [to buy the business]," acknowledged Buckley. "But it’s too early for us, we have some work to do at our end before we entertain those kinds of offers seriously.”
Visit Ocean’s Halo at Expo East, booth #8422
Market estimates on the seaweed snacks category in the US vary enormously, with SPINS data supplied to FoodNavigator-USA last year suggesting a $35m market in 2016 for dried seaweed snacks, while New Nutrition Business claimed the market was worth a far more sizeable $250m a year earlier, although it doesn’t provide a source for this data point.
Regardless of these reports, however, says Mock, “simply my experience as a private label producer on the side, I am pretty confident the market is around $500m today and expected to hit $1bn in the US in the next few years.”