“A true alternative to dairy-protein for infants”: Else Nutrition’s plant-based range garners investment
02 Jul 2019 --- Over 90 percent of baby formula on the market is based on cow-based proteins, but infant nutrition company Else plans to offer 100 percent plant-based, non-dairy, non-soy, non-GMO and gluten-free options. The company recently secured C$7.5 million (US$5.8 million) in Toronto Stock Exchange ventures, closed by A-Labs Advisory & Finance, which will facilitate its planned Spring 2020 launch. Else’s infant nutrition products are touted as being made in an all-natural process that transforms two plants, almonds and buckwheat, into high-quality baby formula that “closely emulates the nutritional gold standard composition of breast milk.” Their plant-based dairy alternative will be reportedly targeted initially to vegan parents and babies, or infants with allergies.
The Israeli company and its founders, who are all veterans of the infant formula market, were well received by the Canadian investment community, with the offering being 100 percent oversubscribed. The offering also ended raising 25 percent above the original requested financing. Aftermarket performance was positive with a 176 percent rise on the first day of trading and additional 8.70 percent rise on the second day completing a total of 250 percent increase in share price from the issue day on June 18.
The range is noted to be suitable for toddlers from 12 to 36 months as a real alternative to dairy-based, as well as soy-based, baby formulas.“The Else team is exactly what we are looking for in companies. Rare level of innovation and expertise with strong experience and execution skills – this is what winning companies are made of and the Canadian market has reacted accordingly,” says Doron Cohen, A-Labs Managing Partner and CEO.
The injection of capital will be used mainly for the following needs, an Else spokesperson tells NutritionInsight:
- Getting ready for commercial production of both powder and liquid baby formula for toddlers – this includes scale-up tests, packaging, quality tests;
- Building up the marketing and sales efforts;
- Initial manufacturing of products for sale;
- Initiating the clinical testing procedures;
- Other company setup and operation needs.
100 percent vegan
Else Nutrition’s range is based on the concept that cow milk protein, which has almost exclusively been the only protein source for the entire infant formula for over a century, is not a viable solution for many infants. The range is noted to be suitable for toddlers from 12 to 36 months as a real alternative to dairy-based, as well as soy-based, baby formulas and provides a solution for lactose intolerance and other sensitivities preventing babies from the benefit of existing product lines.
“Some milk protein has been proven to contain a high content of antibiotics, hormones and pesticides residues – all scientifically tied to modern epidemics such as obesity, diabetes and ADHD. Moreover, an increasingly growing number of infants are allergic to dairy-based formula products, or are lactose-intolerant, at different levels of sensitivity,” a company spokesperson tells NutritionInsight.
However, formulating a vegan infant nutrition range has not come without R&D challenges and pitfalls.
“The road has been a long and challenging one – yet also very rewarding. Perfecting the right amount of nutrients in the formula, and reaching the exact level of solubility of the powder in liquid were among the early challenges,” the spokesperson notes.
“We went through many trial and error iterations until we arrived at the commercial-ready product. Finding a winning formula has been a collective effort that has required much persistence and also a lot of patience.”
From a regulatory standpoint, the company can already offer its formula for 12-36 month-old babies (toddlers) in many markets. Else further notes that it is committed to performing all the required clinical trials to obtain the needed approvals and offer its products also for infants during the first year of life.
Infant innovation grows
Innova Market Insights data notes 13 percent average annual growth between 2014 and 2018.The infant nutrition market as a whole is expanding, but also diversifying as scientific endeavors grow knowledge on the topic of appropriate ingredients for infant formula. Innova Market Insights data notes 13 percent average annual growth between 2014 and 2018, as well as how certain health claims such as “no additives,” “organic” and “no added sugar” are gaining ground – indicating how consumers are ever-more critical and demanding when purchasing infant nutrition products.
The rapid growth of consumers seeking vegan options may also be translating into infant nutrition. The spokesperson notes that many parents prefer not to use dairy formula for their young. Furthermore, parents are becoming increasingly concerned with chemically-processed products, and are searching for more natural, clean label alternatives for their children – a fact echoed by Innova Market Insights data.
Indeed, rising allergy rates are also a prominent concern in the infant nutrition space. Earlier this year, Danone opened its new €240 million (US$271 million) Nutricia Cuijk production facility in the Netherlands. The plant is producing highly-specialized infant formula for health conditions such as allergies or digestive issues. It will manufacture infant formulas for vulnerable babies, particularly in relation to cow’s milk protein allergy (CMPA). However, other health needs addressed by the specialized formulas could also include constipation and colic problems, a company spokesperson tells NutritionInsight.
By Laxmi Haigh
