At organic baby food brand Little Spoon (strapline: ‘We believe your baby’s food should never be older than your baby’), one of a growing number of brands utilizing HPP (high pressure processing) to deliver a chilled 'fresh' product that’s closer to home-made, the original plan was to go into traditional retail, says cofounder and CEO Ben Lewis.
But things didn’t go according to plan, prompting a pivot into a direct to consumer model that turned out to be the smartest move the New York-based company could have made.
“For one thing, when we started, there wasn’t – and still isn’t in most stores - a destination in grocery for fresh baby food, and every store has made different decisions about where to put it,” Lewis told FoodNavigator-USA.
“In some cases it’s in the dairy section squeezed in with sour cream, cookie dough and yogurts; in some stores it’s in produce; and some retailers are allowing brands to put refrigerators in the baby food aisle, but it’s costly and difficult to do at a meaningful scale, so there is this big placement question,” added Lewis, who was speaking to us after raising $7m.
“It’s really difficult for people to discover your brand in that environment. Variety is also extremely important in baby food, and if you only have space for one or two SKUs, you’re not able to offer a level of variety that today’s consumers demand.”
‘Once parents find a brand their baby likes and they trust, they stick with it’
If you sell baby food online, however, you can give Millennial Moms exactly what they want, and if you build the right infrastructure, you can make the numbers add up, he claimed.
“Everyone loves the subscription model in theory but it doesn’t always make sense. For baby food, however, it makes so much sense. Once parents find a brand their baby likes and they trust, they stick with it.”
“One of the thing that has allowed us to scale so quickly is the fact we can deliver to every zip code in the country with a product that’s made fresh with a rotating menu of 30 different blends made with 80 different ingredients.
"We’ve created a unique and nimble supply chain that enables us to do this profitably and at scale.”
Ben Lewis, co-founder and CEO, Little Spoon
Babies are also something of a captive audience, he said, making the online subscription model very sticky provided you have a product that delivers for demanding parents that want to make baby food at home, but don’t have the time or energy: “Your baby needs one, two, or three meals a day every day.”
“The further along we got,” he added, “We also realized that baby food is a highly considered purchase. People really do their homework. Even if they discover a new fresh baby food brand in store first, chances are that they are going to go online and google ‘fresh baby food,’ and if we do our jobs right, we will be the first brand they find.”
Parents use multiple search terms in this category, he said, from ‘baby food delivery’ or ‘fresh baby food’ to something like ‘ingredients suitable for 9-month-old.’ “There’s a lot of high quality leads we are able to pull in through the long tail by being a digitally native brand and getting out there in all the right places.
“The majority of our growth is driven by organic sources, although we do some paid customer acquisition, but I see it more as an accelerant than the sole driver. We work with influencers too, but the main thing is that Moms talk. They can be very demanding, and very unforgiving if you get something wrong, but if they like what you do, they tell other Moms.”
Aspirational, but affordable
Millennial Moms are also comfortable with shopping online, and first time parents that buy into the fresh baby food category are sometimes pet owners that have bought into the value proposition of fresh food for their pets, and instantly get it when they progress from being “pet parents” to well, regular parents, said Lewis.
“They want higher quality, less processed, fresher products, and we’re offering a brand that’s aspirational, but also affordable.”
The business model: ‘We’ve worked out how to scale profitably'
A key to making this possible has been HPP (high pressure processing), whereby foods are put into a high-pressure chamber that is flooded with cold water and pressurized in order to kill harmful bacteria, yeasts and molds without heat, enabling products to retain the texture, nutrition and taste of homemade food, with no preservatives or added flavors (ie. a clean label), and a shelf-life long enough to secure national distribution.
“We’ve grown extremely rapidly, selling more than a million meals in our first year, so we’ve shown there is a need for this and demonstrated we can do this at scale profitably, with pricing that is well over 50% cheaper than any of the other brands in the ecommerce [fresh] baby food space,” said Lewis, who is based in New York but manufactures Little Spoon products in southern California, to be closest to key fresh produce suppliers.
“Even our most expensive plan works out at $2.99/meal, which is the same price you can pay at the grocery store for fresh baby food, whereas our price includes delivery."
'We have very little if any spoilage'
He added: “HPP means we can deliver every two weeks rather than every week like most other companies [in the direct to consumer babyfood space], which allows us to deliver much more cost-effectively, and have very little if any spoilage. Right out of the gate, we also set up a network of three fulfilment centers in the east, west, and Midwest so we are no more than a day or two from the end customer for ground delivery. And I can’t overstate how important that is.
“Most companies in the space, for the first couple of years at least, don't have that level of infrastructure, so they are overnighting orders to people and paying for two-day express, which is sometimes five times the price of sending a ground shipment. We’re producing product in California fresh, and partner carriers do weekly runs to our three fulfilment centers, and then we repack orders from these three locations.”
When parents sign up for Little Spoon – which has just shipped its millionth meal - they receive recommended meal plans personalized to their child’s needs, but also have the option to customize.
The food - which is made in southern California and delivered chilled - is treated using high pressure processing (HPP) and arrives in a proprietary, recyclable container with a spoon. Each delivery box comes with a layer of insulation and ice packs designed to keep the food cold in transit.
Founded by a team of food and consumer product executives, Lisa Barnett, Michelle Muller, Ben Lewis, and Angela Vranich, Little Spoon launched nationally at the end of 2017 after a few months of beta testing with a limited number of customers in the new York tri-state area, and offers three meal plans delivered in two week bundles: one meal per day, two meals per day, or three meals per day.
All of its products are free of the big eight allergens and are shipped nationwide within the continental United States.
Today the company has a core team of six full time staff in New York, plus developers and customer care staff that work remotely, but will be hiring new staff following a $7m cash injection. It is also working on a series of new products that will take the brand into new territory.
The products are labeled with a 14 day refrigerated shelf life.