The economic downturn is touching every company in the nutrition industry, but the smaller entrepreneurial companies potentially stand to lose the most should the recession deepen or linger because their access to capital and credit will only grow tighter. So how is a CEO expected to protect and even continue growing her company in the midst of this recession? For Gigi Lee Chang, founder and president of organic frozen baby food maker Plum Organics, the answer was to join forces with Nest Collective, an Emeryville, California-based firm dedicated to amassing a suite of healthy, organic and nutritional consumer products brands. Along with Plum, Nest also owns a growing line of organic lunchbox snacks and kids meals under the Revolution Foods brand.
“It made sense for us to come together because I felt Nest would safeguard the mission of Plum and help me take it to the next level,” said Lee Chang, who sold her company to Nest at the end of 2008. She said Plum’s next goal is to develop a suite of shelf-stable toddler foods that will become the organic equivalent of the popular Gerber Graduates line. “Parents who would normally buy only organic for their children use Gerber Graduates because there is no organic option. We want to be that option.”
Jed Smith, founder and managing director of Catamount Ventures, which is Nest’s primary financial backer, said partnering with other fast-growing, mission-minded businesses is one viable way for small- to medium-sized companies in the nutrition industry to continue expanding in the current environment, while protecting their brands and company ideals. “As access to capital dries up and as these smaller companies start to get to scale and need more resources, they will need to find other ways to compete,” Smith told Nutrition Business Journal in recent interview. “Nest is providing a real alternative for entrepreneurs so that they don’t necessarily have to sell to a big private equity firm or a big consumer products company, but rather can be part of something that is pure and authentic.”
NBJ’s April issue focuses on the children’s nutrition market and includes an in-depth profile of Nest Collective. To order a copy of the issue, subscribe to NBJ or download a free 32-page sample issue of the journal, go to www.nutritionbusinessjournal.com.