Among the many recent changes to consumer tastes that have been roiling the food and beverage industry lately, one trend is driven more by necessity than choice: the need for allergen-free foods amid an explosion of childhood food allergies.
Veganism, a preference for whole wheat, or the consumption of only non-GMO foods represent lifestyle decisions as much as health or environmental concerns. But if you’ve ever seen a child suffer an anaphylactic attack sparked by a peanut allergy, you know allergen-free options are anything but optional.
Enter Libre Naturals, founded in 2012 after years as a homespun pioneer in the manufacturing of allergen-free snacks like granola bars, oatmeal cups and protein bars. Founder Alana Elliott started her journey toward entrepreneurship as a self-described frustrated mom unable to find safe, tasty and nutritious snacks for her daughter.
After years of self-funding the business, with web distribution from her home in British Columbia, Libre Naturals raised an undisclosed seed round from impact fund S CAP in May. S CAP is helping alternative food companies scale their distribution and marketing efforts to meet growing demand. S CAP cites US Food and Drug Administration data suggesting that allergen sensitivity affects 8% of US children and 11% of adults, one-third of whom are allergic to more than one food type.
Elliott spoke to Karma Contributing Editor Michael Moran.
Michael Moran: Tell us what drove your decision to found an allergen-free food company?
Alana Elliott: Well, I wasn’t an entrepreneur! The start came out of necessity when my second daughter was born in 1996. By the time she was a year old, she’d had a life-threatening, first reaction to peanuts. That followed with almonds, kiwi, and chickpeas. Plus my husband’s allergic to shrimp and mollusks so it changed our family completely. It became very difficult to find things that were safe for her. So I left my job as a teacher and started taking seminars on how to start a business.
We launched it from our home on Vancouver Island in 2002. All of our business basically was from our website. We created the site in 2004, and we thought it would just be an informative web site – we weren’t trying to sell off of it at all. E-commerce was very much in its infancy. But we had so many calls from all over North America that we decided that we would put in our first web store. And it just kept growing and growing as we started adding more allergens. Eventually, we were free of all the major food allergens, and also gluten and staying with natural products without preservatives or GMOs.
Michael Moran: At what point did you realize you needed to go out and find investors and incorporate and make this something that could grow?
Alana Elliott: We actually had no plans to have investors beyond family. My parents have been super supportive, and for a long time they were the only investment in it besides ourselves. I was one of those stubborn mom entrepreneurs and I also wanted to make sure I maintain control. But our product was successful approached by several different VCs. We always said no.
And then S CAP came along and they were different, focused on natural foods, and that got us thinking about where we could be. Also, we started to see more competition come around and realized that a lot of those people had had some support behind them and perhaps if we’re not going to get left behind that we need to go down that road as well.
Michael Moran: Where are you as a business and what will the S CAP investment allow you to do?
Alana Elliott: We’ve always been small, we’re still looking to break the $1 million mark in revenue at this point. But with S CAP basically that’s going to be put on steroids. Growth causes major problems in cash flow, and that’s why we’ve kept our growth small along the way. We were content with that. But this really pushes us into hyperdrive. Some of the money will be devoted to efficiencies, but the vast majority of it is going to distribution, marketing and sales.
Michael Moran: Will you take this beyond the direct-to-consumer web sales and into supermarkets? Where else will you target?
Alana Elliott: One place is universities and schools. In Canada, it’s very different, we don’t have a system for feeding our kids at school, kids go to school with their own lunches. But the United States is feeding their kids right through the USDA programs and what’s happening, at least at in elementary schools, is the USDA has put in a requirement for whole grains. A lot of the products that are out there they may be whole grains but they’re not allergy friendly — if they’re allergy friendly maybe they’re not whole grain. So we were able to put those two things together and start to have school districts purchase our products.
One of the first ways that we got into universities was actually through the NCAA programs because the athletes are traveling and when they’re traveling it becomes really really hard to try and meet the food requirements. As soon as the NCAA pulled back on their strict rules that you weren’t allowed to feed the students, we started to see that these traveling teams were purchasing more. But it’s not just about those teams it’s also about what about all the kids on campus.
And what about vending? What about the bookstore where they might be purchasing snacks and what about even having a special area for them within their cafeterias so that they can eat safely? So it’s it’s born out of need and it’s growing and the universities are finally starting to understand how they can do allergy management.