Despite the economic pressures of the COVID-19 crisis, Kiwi plant-based food manufacturer, Little Island, has confirmed plans to acquire a plant-based yoghurt business to widen its product offering. It has launched a public capital raise of up to NZ$2m to support this acquisition and drive further growth, via online investment platform Snowball Effect.
Co-founded in 2010 by Tommy Holden and James Crow, the Auckland-based company was formed out of a realisation that there was a major consumer need for a food and beverage producer focused on sustainable and ethical plant-based alternatives.
Beginning with the production and success of its ‘Nice Blocks’, the business quickly expanded into other dairy alternatives. It now also offers BioGro certified organic plant-based milk and ice cream under the Little Island brand.
Chief executive officer, Bharti Kendrick, says the business is confident that the current environment would not hinder growth opportunities for the business.
“Before the pandemic hit, there was already significant growth in demand for plant-based alternatives. Now more than ever, there is heightened awareness of better food and drink solutions for both people and the planet. Despite the challenges we’ve faced during these unprecedented times, we’ve continued to see a strong appetite for our products, particularly as consumers are paying more attention to their health, safety and the environment.
“Just prior to lockdown, we recorded the highest weekly sales for our milk range to-date and ramped up production to meet demand. With this next exciting step, we see huge opportunities to continue to build on and create even more delicious and sustainable food and drinks to meet consumers’ ever-evolving needs.”
Little Island’s product range is sold throughout retailers and supermarkets across New Zealand, with more than one million units sold in FY20. The combined group achieved revenues of NZ$5.7m in FY20 and is projected to grow its revenue to NZ$22.2m by the end of FY24 (a compound annual growth rate of 40 percent).
With the addition of the yoghurt business, Little Island will have the largest solely plant-based offering in New Zealand, across categories, to complement its broad range of premium, sustainable dairy alternative products. The new range of yoghurt products is planned to be available later this year, via its national network of over 500 retailers.
“Beyond this acquisition, we’ll continue our growth strategy by investing in product development and innovation, strengthening our brand, building our capabilities and creating a more scalable and New Zealand-centric business for export, particularly in the Asia Pacific region,” adds Kendrick.
Little Island’s co-founder and non-executive director, James Crow, says that changing consumer behaviour has also elevated demand for Little Island products.
“Due to lockdown, we’ve certainly seen a shift in consumer behaviour with people spending more time cooking from scratch in their own kitchens. Kiwi consumers are still looking to create moments of indulgence by replicating an out-of-home food service experience in the comfort of their own homes. And even as we move down the alert levels, we believe this will likely remain part of their routine going forward.
“There’s also been a rapidly growing NZ-made movement with many Kiwis making a concerted effort to support local brands and products. Our ice cream, for example, is a great accompaniment for baked goods, and our milk range is ideal for smoothies, cereals, baking and coffee – wherever you may need a dairy-free milk alternative,” concludes Crow.
Little Island benefitted from early entry to the local market, which meant the company has built a strong brand and business in the plant-based FMCG segment – particularly in the dairy-free ice cream category where in 2019 it secured a 50 percent market share.
Snowball Effect co-founder and CEO Simeon Burnett adds, “Over the last few years, plant-based products have quickly built a significant presence in the mainstream market. We’ve seen an increased focus on the industry, more so even now, and as such, Little Island provides an investment opportunity that those interested in plant-based businesses should consider.