Natural Foods Merchandiser

Gaia Herbs gains investment capital

by Mitchell Clute

On Oct. 2, venture capital firm TBL Capital announced a $3 million dollar investment in Brevard, N.C.-based supplements manufacturer Gaia Herbs, intended to bolster the company's sales and marketing efforts and create wider consumer recognition of the brand.

Founded in 1986, Gaia Herbs has been an industry leader in both sourcing of organic herbs and in research. The company cultivates 250 acres of medicinal herbs and conducted a five-year echinacea research program that resulted in patented processing technologies for the herb, used in its Quick Defense product.

"They're an industry leader and are still growing despite the economy," said Joe Gorefield, principal for the Sausalito, Calif.-based TBL Capital. "They have an interesting upside, because they've built their company without significant marketing and sales staff. There's a lot of low-hanging fruit for Gaia, and these funds will be a big boost for them, allowing them to seize opportunities they haven't been able to take advantage of before."

TBL Capital's approach, Gorefield said, is to help scale socially responsible companies without placing restrictive short-term goals on the business.

According to Gaia, the timing of the investment is right, in spite of the economic downturn that has affected retailers such as Whole Foods. "We personally think the timing couldn't be better," said Ann Buchman, vice president of marketing for Gaia Herbs. "The financial crisis is impacting health care, as premiums, deductibles and co-pays go up. When the co-pay for a pharmaceutical is the same as a high quality herbal supplement, herbs become more relevant to consumers, not less."

Buchman said that concerns about pesticides and adulterated products also work in Gaia's favor, both because the products are certified organic by Oregon Tilth and because the company grows and harvests many of its own ingredients, decreasing concerns consumers may have about imported ingredients. The deeper sales staff the investment allows, Bachman said, will be better able to concentrate on individual segments and special channels for the company's products, while on the marketing side, Gaia intends to increase its visibility with consumers.

"We really want to grow our presence with the consumer through advertising, in-store promotions, increased sampling and new product launches based on what the market needs," Bachman said. "We have a strong core of devoted customers, but it's expensive to communicate to new natural products shoppers. We'll use this investment to get them the information they need."

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