The sale of a majority share of Baby Gourmet to Hero Group for an undisclosed amount also gives the new Switzerland-based owner a toe-hold in Canada with which it can learn about the market and potentially bring its other brands.
Baby Gourmet co-founder and CEO Jennifer Carlson told FoodNavigator-USA that Hero Group is the "ideal" place to continue to grow the business, which began 15 years ago at a Farmers Market before snagging the top spot in the Canadian organic baby food pouch market just two years after launching into mass.
“Hero Group is a good fit for us for a couple of reasons. The first is that by having a strategic company with multiple baby brands around the world behind us we will have access to new markets and manufacturing capabilities we wouldn’t have had access to before, so the opportunity to grow and continue to drive our vision is there,” she explained.
She added Baby Gourmet is “really looking forward to getting together with Beech-Nut to discuss the possibilities and potentially start plotting a strategic plan to work with them in the US.”
Baby Gourmet already plays in the US market with its Slammers snack pouches for young children, but not in the baby food space, which Carlson notes is significantly larger than the Canadian market but also much more competitive.
“In Canada, we have been around for 15 years and we have been embraced for a long time as a local brand,” but expanding to the US will be easier with a group that already knows the playing field and is well-respected by industry and consumers alike, she said.
Carlson also said she was attracted to Hero Group because it values natural food, which is the cornerstone of Baby Gourmet’s vision and values. She explained her company uses only the freshest organic ingredients and doesn’t use fillers, added sugar, salt or artificial preservatives of any kind.
Finally, she said, the deal appealed to her and her co-founder because they will remain with the business and operate it much the same as they have for the past 15 years.
“While rare with many strategic acquisitions, Hero Group really wanted us to stay on and want us to continue to growth the business with our entrepreneurial spirit. And they have promised us the autonomy to run the business as is out of our head office in Calgary with our team,” Carlson said, noting that she and her co-founder will become officers and shareholders of the company and remain in their current roles.
“This is really an ideal situation for us because we love what we do and this is an opportunity to keep doing it, but to have the strategic backing to support our growth,” she said.
New products and a new look on the horizon
Beyond expanding distribution in North America, Carlson said she sees potential for innovation to further reduce sugar in the baby food aisle or add on-trend and in-demand functional ingredients.
The US baby food market has been criticized for having a “sugar problem,” with too many fruit-forward options and not enough vegetables and spices.
“There is an opportunity for more vegetable-forward meals and functional value-added ingredients,” including probiotics, omega-3s and other immunity, cognitive and overall health boosting ingredients, Carlson said.
In addition to new products, Carlson said, Baby Gourmet also is rolling out a new look, which should be fully on shelves by February. The package and branding redesign will be targeted more towards Millennial parents and is the first visual refresh since the brand launched on the mass market 10 years ago.
Overall, Carlson said, she is optimistic for the future of Baby Gourmet, noting that with Hero Gourmet’s help the opportunities in the future are endless and attainable.