Native and natural: Mexico startup takes on Gerber with better-for-you baby foods
Established in January 2017, Mexico-based La Huerta de Elisa (Elisa's Orchard) secured initial funding of US$10,000 on Kickstarter in March last year to produce its first batch of product. Its three all-natural, cold-pressed baby food products for children aged 8+ months can now be found in a handful of specialty stores around Mexico City, as well as online and sold via WhatsApp.
Taking on a 'Gerber-dominated monopoly'
Rosalino Molina, CEO and founder of La Huerta de Elisa, said the company's primary aim was to plug the nutritional gap in a “Gerber-dominated monopoly”.
“My wife and I previously lived in Boston with our daughter and in the US we had access to a variety of baby food options. You've heard of Wholefoods – there are a lot of natural and organic options there – and when we moved back to Mexico, it's basically what we couldn't find,” Molina told FoodNavigator-LATAM.
“We asked ourselves: why isn't there better quality food here? And basically, the market is dominated by one company, although there are two players: Gerber and Kraft-Heinz.”
According to Euromonitor International's Baby food in Mexico 2017 report, Nestlé Mexico [who owns Gerber] held a value share of 57% of Mexico's baby food market in 2017. Its Nan and Nido brands accounted for a 51% value share of milk formula and its Gerber, Nestum and Cerelac brands made it “very relevant”.
Molina said: “Gerber in the US has much better offerings than in Mexico”, with added sugars only being removed in the last year and a half in Mexico, despite happening more than ten years ago in the US. Heinz by comparison, he said, had done little to improve its offering.
“There was just a gap there (…) The point is, when we looked at the US market, what we saw was no added sugars with a focus on organic products but also better quality ingredients overall.”
Asked if he considered Gerber and Kraft-Heinz competition, Molina said: “I see imports as our competition (…) Gerber is owned by Nestlé – they do mass market products at a particular price point. I'm not too concerned about them. Technically if they were smart enough or wanted to take the risk in starting a new brand in Gerber, that would be a threat.”
Native superfoods for the 'most vulnerable'
Molina said La Huerta de Elisa was passionate about bringing native fruit and vegetables to Mexico's baby food market because so many were nutrient-dense and flavorsome.
“My family is from Mexico but I was raised in the US, and what I saw in the US was that, particularly over the last five to six years, companies calling many things 'superfoods'. Partially it's marketing; partially there are certain claims related to the food and how nutrient-rich it is. But what I saw is that many of these foods are from Mexico: avocado, chia, amaranth, cactus. We're pretty much exporting the best food and it's being sold at a premium and in Mexico we're not using it to feed the most vulnerable population, which is children.”
However, Molina said two of the company's initial baby food pouches - 'mamey and campote' (a native fruit and root vegetable mix) and 'nopal, calabaza, piña and acelga' (a cactus, pumpkin, pineapple and Swiss chard blend) – had proved “too different” for consumers.
“Parents put it as risky or said they weren't sure if their child would like it and that's then a barrier to purchase,” he said, so the company now used one native ingredient in each blend alongside more familiar ingredients like mango, beetroot and avocado.
Expansion and organic innovation
By January 2019, Molina said the plan was to expand La Huerta de Elisa's portfolio to ten products and launch single-ingredient pouches for younger children, aged 6+ months.
One of the products currently being tested for an anticipated launch in January, he said, was a blend for children aged 12+ months of red bell pepper, tomato and native winter fruit mamey.
The company was also developing an organic line, set for launch in April 2019.
“Things are going well overall. Between now and January, I'm very excited. Sometimes I feel overwhelmed but we have quite a few initiatives for January just to propel growth because we know the growth of the company is going to be tied to traditional retail distribution.
“...Once we launch organic, we'll give that more of a focus because it's more added value. Even though it costs a lot more, we can potentially get better margins.”
Eventually, the goal was to shift into products for children aged 18+ months, Molina said, including fruit cups, cookies and smoothies but that would require additional funding. La Huerta de Elisa was therefore hoping to secure angel investment early next year to fund its innovation pipeline and future expansions.
