A growing number of entrepreneurs with condiment and plant-based food brands are turning to crowdfunding for their startup capital.
Project NOSH recently sat down with CircleUp, a crowdfunding platform for consumer brands looking to raise money from accredited investors, to discuss what trends they are seeing on the platform.
According to Allie Rabman, a business development associate with the company, there are two major food categories currently experiencing an influx of applications for funding: pantry staples (such as condiments) and plant-based foods.
Rabman says the companies applying to CircleUp are taking perennial pantry favorites, such as condiments, and trying to “reinvigorate them to satisfy today’s consumers and their current needs.”
These offerings include healthier version of classics, condiments with ethnic flavorings, mission-driven companies, and organic offerings.
From 2014 to 2015, CircleUp saw a 300 percent increase in applications for condiment products, Rabman said. This niche is growing twice as fast as the broader food category, applications for which were up 157 percent during the same time period, she added.
Why the influx of new condiment companies? Rabman believes that for years big CPG brands have dominated the category with conventional products. Now that consumers have a growing desire to know where their food comes from and a refuse to settle for unhealthy ingredients, smaller brands have had the opportunity to steal share.
“Just because you grew up eating Heinz Ketchup doesn’t mean you want to give that to your kids and to your family,” Rabman noted. “Consumers know [big brands like] Kraft have been around for a while and they know that they’re a little slower to innovate.”
Along with condiments, CircleUp has seen an increase in applications from plant-based food companies. The platform saw the number of applications from plant-based food and beverage companies grow 50 percent more than food and beverage companies overall.
While dairy and meat alternatives have been around for decades, Rabman feels that it’s only in the last several years that the quality of plant-based foods has dramatically improved. This shift has aligned with the growth in consumers who aren’t purely vegetarian or meat eaters, but rather operate in a middle ground as flexitarians.
“People are eating less meat, people are eating more vegetarian meals and people are being much more conscious of where their food is coming from,” Rabman noted, “and if it’s coming from animal products.”