‘The growth over the last year has been incredible…’ DTC baby & toddler food brand Little Spoon raises $44m in Series B
Founded by a team of food and consumer product executives, Lisa Barnett, Michelle Muller, Ben Lewis, and Angela Vranich, Little Spoon launched at the end of 2017 with HPP-treated organic purees (‘Baby Blends’); but has since added to its portfolio with powdered nutrient blends (‘Boosters’) of vitamins & minerals, pre-and probiotics and long-chain omega-3 fatty acids; and a new line of vacuum-sealed meals (‘Plates’) for toddlers and young kids.
All products from Little Spoon - which has delivered more than 15 million organic meals since launch, and tripled its team from 10 to 33 team members this year - are free of the big eight allergens, and stay fresh in the fridge for 14 days after delivery, co-founder Lisa Barnett told FoodNavigator-USA.
“We have fulfilment centers across the country, and we deliver every two weeks to consumers’ homes.”
Baby food lends itself particularly well to online subscription model
While several fresh baby food brands have developed a retail presence – notably Once Upon a Farm – the category lends itself particularly well to an online subscription model, said Barnett, provided you have a product that delivers for demanding parents that want to make fresh food for their babies and young kids at home, but don’t always have the time or energy to prepare it.
Baby food is also a highly considered purchase in which buyers (Millennial parents) really do their homework online, again lending itself to a DTC model, she said.
“In the millennial generation there's an increased understanding of the connection between food and health and your child's development, and parents want to make sure that their children are getting the right things at the right time.”
And once busy and exhausted parents find brands that their kids like and they feel good about, they generally stick with them, she said.
“The research that parents do that around what they're feeding their children, and how much they pay attention to food labels, to what's put in their baby's bodies, it's quite a high curve, plus kids are very picky, so once you've done that one time, there's a barrier to leaving and trying something new because then you have to do that research all over again.
“And that’s very specific to this baby and kid space.”
“The approach Little Spoon has taken to build the fastest growing DTC baby and kids food brand is unique. Rather than use the same, tired playbook for building a DTC brand they’ve managed to cultivate a community and movement around making quality nutrition for kids accessible and parenting easier. The growth of Little Spoon over the past year has been incredible.”
Jon Shulkin, partner, Valor Equity Partners
Pandemic accelerated demand for products for toddlers and young children
The pandemic, in turn, increased parents’ stress levels, with many working from home and having to cater for toddlers or young children who were previously at day care or school, she added.
“All of a sudden, parents were telling us via our Is this Normal? platform, we're working from home, we’re 24-7 parents and teachers and we want convenient solutions, not just for babies but for the older kids in the household.
“So we went to work and we were able to launch our ‘Plates’ line back in September, which was a quarter earlier than we originally planned. And in that first week, we sold over 100,000 plates, which was well beyond our expectations. Each meal comes on a plate that you can re-use and it’s dishwasher safe, although we’re also going to be introducing a mail-back program.
“We wanted to make it very easy for the parent to be able to take the plate out of the box, put it in the refrigerator, and it's all ready to heat in the microwave in under a minute and a half.”
Positive unit economics
While chilled delivery is expensive, Little Spoon delivers every two weeks (rather than weekly), which improves efficiency, said Barnett.
“The way we look at it, is anytime you're going to develop a product you have to have positive unit economics, and not all startups operate this way.
“That does not mean that we're a profitable company, as we're investing in growth from an EBITDA perspective, but from a unit economics perspective that's always been a big focus and it's definitely been a reason that investors have been really excited about Little Spoon.”
Customers that become brand advocates
As for customer acquisition costs, she said, “We of course play in the digital ads space, but one of the key learnings has been that a lot of startups are very dependent on channels to acquire customers like Facebook that are very unpredictable and are getting more and more expensive, so from the beginning Little Spoon was focused on cultivating our customers as the most important channel for acquisition [ie. spreading the word to fellow parents].”
Heavy metals
Asked about heavy metals in the wake of the Congressional SubCommittee report, she said Little Spoon has stepped up testing, but has always avoided rice (which is particularly good at sucking up heavy metals) and also deploys certain foods rich in nutrients (calcium, vitamin C, iron) that help block the absorption of heavy metals.
Is this normal? - three words every new parent is probably asking on a daily basis – seemed like an apt name for an online community platform Little Spoon has built to serve as a resource for parents, said the firm.
“This was inspired by messages the company received through its 1:1 customer support service, and has organically grown as a destination for parents to find information on the realities of parenting in a modern, non-judgmental voice.”
