Little Beauties takes flight after capital raise

19 Oct 2021 11:26 AM | Mike Hearn (Administrator)

Nelson snack food startup Little Beauties is scaling up and chasing export growth following a $2.5m capital raise earlier this year with the US the latest country in its sights.

While retail sales are the ultimate goal, Little Beauties has gained a foothold in America via New York-based e-commerce platform SnackMagic, which was launched in 2020 to deliver customised snackboxes to American office staff now working from home.

“It’s been more challenging getting into the US bricks and mortar space, however, we have been able to make some good progress with our online sales,” chief executive Rob Simcic told the Ticker.

“The appetite for risk and the sheer capacity for buyers to make time for a conversation has been reduced because there has been enormous staffing pressures in the US [due to Covid-19].”

The US is the third export market after Australia and Japan for the three-year-old company, which was founded by the Wastney family to turn third-grade fruit from their family orchard into what is now a six-product range of high-value dried fruit products.

Simcic came on as chief executive in 2019 from ANZ Bank as a food and beverage specialist. Tasked with scaling up the business and taking it on its export journey, Simcic led the Series A funding round via his network of investors earlier this year. He is also a shareholder.

“There’s been significant investment in people, a capital component in terms of our [capital expenditure], and a significant investment in building our path to market now through sales and marketing,” he said.

“When you’re growing at 100% or more and you’ve got designs on long-term export growth you’ve really got to resource that and I don’t think you can ever resource that enough.”

Now, it was about executing those plans with Simcic wanting to grow export revenue from the current 40% to 80% over the next five years. It forecast total revenue growing from less than $2m annually now to $10m within the next 3-5 years.

Australian sales – around 25% of revenue – were currently all direct through Little Beauties website but Simcic said there were some “pretty promising” negotiations underway with retail buyers and distributors on the ground.

The company also had a foot in the door in Japan, with its gold kiwifruit and boysenberry products stocked in around a dozen boutique organic foods stores around Osaka and also sold online through Japanese importer Koru Japan.

“We’re broadening our reach in Japan with some listings through three online platforms. We’re in conversations with a partner who’s looking to get us stocked on platforms Rakuten, Amazon Japan and Yahoo! as well.”

As for new markets, Simcic said he was “aiming to replicate our direct-to-consumer model in other offshore markets – that’s up the top of our list of priorities.”

The company currently processed around 150-180 tonnes of fruit at its Nelson factory annually and had expanded its team from 10 employees to between 15-20 in the past year, depending on the season.