Fast Growth & a Game-Changing Product for an $80B Baby Nutrition Industry | 2022-03-10 | Investing News



(Image via Else Nutrition Holdings Inc.)

A Natural Alternative to Cow Milk in Infant Nutrition ….

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Both the plant-based foods and infant formula global markets are huge, but there is still a significant difference between them and, within this gap, a unique opportunity to satisfy the demands of another large market.

Contrary to the plant-based foods market, which offers a great diversity of products in different food categories made from different sources of plant-based proteins based on multiple food technologies, the infant formula market is mainly (95%) based on a single source of protein: dairy.

Because the nutritional composition of infant formula must comply with international regulatory codes, which were modeled after the “golden standard human milk composition”, the products are regulated by health authorities globally and must meet that specific composition.

But dairy doesn’t work for everyone, some are allergic to it, some disagree with the environmental and sustainability aspect of the dairy industry … where can they turn?

In a world of baby formulas being sourced mainly from dairy, Else Nutrition Holdings Inc. (TSX: BABY, OTCQX: BABYF, Forum) presents a natural, plant-based, and healthy alternative. Made of almonds, buckwheat and tapioca, the Else nutrition formula is out to change the standard on infant nutrition by providing an alternative free from dairy and soy, (which are the current only protein sources approved for use in the global industry) but also free from hormones, antibiotics, gluten, or other harmful substances. Else provides a clean label, a sustainable new source of protein in the purest way possible. For the first time in a century, mothers can choose a real nutritional alternative for cow milk. It’s a multi-billion-dollar market that will no longer be dominated by a single source of nutrition. Now, there is something new … something else.

There is high demand for such a product – the level of allergic and intolerant babies may come up to as high as 40% of the entire category. In addition to this group, there are also those looking for such a solution with vegan, plant-based, and vegetarian lifestyles coupled with parents who are seeking for more sustainable and environmentally friendly products.

Speaking with Stockhouse Editorial, Else Nutrition’s Chief Executive Officer and Co-Founder, Hamutal Yitzhak explained that the team is driven to change a centuries-old tradition in children’s nutrition.

“Massive paradigm shifts of historic proportions require massive resources and the support of the relentless vision. Else has set its aims on becoming a new leader in an $80 billion market and providing healthier, whole food and minimally processed, better nutrition for our future generations.”

She added that Else’s clean label purity award certification provides a clean label as well as clean nutrition products for families across the world regardless of the protein source.

“Our products are made from clean whole food and minimally processed ingredients without the use of any fillers and gums, no residues of hormones, pesticides, antibiotics or chemical intervention in the ingredient processing.”

This is something unlike any other product in the industry.

Sales growth:

In 2021 Else Nutrition recorded rapid online sales growth especially via Amazon customers, growing its year-over-year revenue by nearly 300%. The company earned roughly $57,000 in January 2021 according to company documents, but that grew to monthly earnings of $150,000 by January 2022.

CEO Yitzhak noted that by the summer of 2021, the company ran a sampling campaign with Amazon, and its direct conversion rate was 13%.

“Our performance on Amazon was noticed by the platform and as a result, our inventory allocation was increased by 800% in the last six months, and we were asked by Amazon to initiate sales on Amazon’s European marketplaces.”

Amazon also shared with the team that its repeat purchasing score is 62%, much higher than the category average (45%).

Preclinical studies:

In February 2022, Else reported that it had concluded a successful preclinical study on its plant-based infant formula, on the pathway to bring its formulation to market

This marked a key first step on the path with the Food and Drug Administration (FDA), as well as with other regulatory authorities, to demonstrate safety and nutrient bioavailability of the Else infant formula. The study results demonstrated proper growth like a dairy-based infant formula, in a neonatal preclinical model.

This was a very significant study for Else, as well as for global infant formula scientific community, as it scientifically demonstrated for the first time that it was possible to use a novel source of protein in such a highly regulated and scrutinized industry – who had only approved just two sources of protein (dairy and soy) until now … Else provides the third.



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In this first-of-its-kind study, a newborn model demonstrated the safety and bioavailability of the infant formula and its ingredients. The study looked at two groups: One fed diet based on Else infant formula and the other based on commercial dairy based infant formula, showed similar growth. The safety of the ingredients is the first stage in the pathway for approving a new infant formula in the US and a very important indicator of the clinical study final success.

The study results were accepted to be presented in a few coming international scientific conferences on pediatric nutrition.

One of the conferences the Else team will be presenting its pre-clinical study and parent survey at, will be the 54th Annual Meeting of the European Society for Paediatric Gastroenterology, Hepatology and Nutrition (ESPGHAN) in June 2022.

This annual meeting brings together key opinion leaders in the field of Paediatric Gastroenterology, Hepatology and Nutrition from Europe and all around the world, making the congress the largest conference of its kind worldwide with more than 4,500 participants.

Products:



(Image via Else Nutrition Holdings Inc.)

Made from three simple ingredients: Almond, buckwheat, and tapioca, the Else lineup features several plant-based food products.

Else toddler formula:

An organic, clean-label, dairy-free complete nutrition for toddlers is trusted by parents across the globe. With over 20+ vitamins and minerals, Else is a complete nutrition source that may help your little one’s growth and development.

Else kids complete nutritional shakes series:

A plant-based complete nutritional protein shakes for kids that “taste like a treat” and is packed with protein, healthy carbs, healthy fats, and more than 20 essential nutrients kids need, but 50% less sugar than leading brands.

Launching April 2022: Else super cereal series 6M+.

Future outlook:

2022 is shaping up to be a major growth year for the company, as it both widens its product range in parallel with accelerating retail penetration in the US, igniting its global expansion.

Else is working to launch several new product lines that are anticipated to significantly widen its product range and make it more attractive to brick-and-mortar retailers. In the next two months the company plans launch a cereal product line and a more affordable toddler product.

Looking to Q3 2022, the company expects to launch a ready-to-drink (RTD) kids product line and the team is also working on an RTD line for adults.

At a glance:

  • Launch online and in retail in Canada, Europe, online platform Cross Border China, and Australia
    • Canadian launch will be in March / April, starting online and on amazon.ca and soon after in natural food and grocery retail stores. Else plans to reach mass retail chains towards the end of the year, having developed and produced special products for Canada that comply with the local regulation and competitive landscape
    • The initial launch in Europe will be via Amazon. Following its success in the US Amazon invited us to sell in major European market. Else is now working to onboard the first two markets, and plans to expand to five to seven markets within a year
    • The company is also working to secure other distribution channels in Europe, and are in discussions related to several major retailers and distribution partnerships
    • Amidst the final stages of signing a distribution contract in Cross Border China, the largest distributor in this field, with intent to start selling in H1 2022
    • Working on a follow-up product for the Australian market and are seeking distribution channels within the next six to 12 months.

  • Penetrate larger grocery and drug US retailers – CEO Yitzhak said that the team is in advanced discussions with many retailers that represent a potential of ~ 30,000 grocery and drug doors.

Protected by patents:

Else’s patents have, what CEO Yitzhak called, the strongest protection – based on composition and not a on the certain process that may be reverse-engineered.

“Through our wide IP we protect all products containing any combination of our macronutrient ingredients, and beyond (ie: other plants that have the same criteria with regards to the complete amino acid composition).”

Backed by patents granted all over the world, filed in 66 countries, a new family of patents protecting Else’s specific innovative process was recently developed by its R&D team. They can reduce certain elements from its ingredients that make them cleaner and more purified, so they can be compliant with all infant nutrition standards across the world.

Meet the team:

Else’s CEO Yitzhak is a seasoned executive veteran of the infant formula industry, along with the company’s other founder, Uriel Kesler, who also serves as Chief Operating Officer. Both understood what should be changed in this product market, as well as facing the trigger of a personal family case, COO Kesler’s baby granddaughter was severely allergic to traditional milk products.

As leaders in the Israeli local industry, CEO Yitzhak had witnessed the extent of issues and problems parents were facing with their formula feeding, having so many feeding-related symptoms that at certain instances like theirs, were even life-risking.

“When nothing worked for Uriel’s granddaughter, (after trying even the most medical formulations – extensively hydrolyzed ( hypoallergenic) formulas in the market) we realized that we should look for a solution which not only is dairy and soy-free but also, minimally processed, clean nutrition (free of fillers and gums, hormones, pesticides, antibiotics, chemical processing et. cetera), and whole-food ingredients based.”

They started with a very basic formulation based on almonds. When they saw that the child was improving, starting to gain weight, and looking healthier, they looked at the composition and realized there is long way to go. They set to work on complementing the nutritional value with other plants, building a full profile, and perfecting all the other technological and physical attributes of the product – it took several years to reach the final composition and crate a real infant nutritional product that meets all the global standards as a human milk composition analog (like the other formulas) the challenge was immense, but the reward even greater.

To keep up to date with all that is going on with the company, visit elsenutrition.com.

FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.