Brazilian foodtech 100 Foods raises BRL 1M and forecasts growth amid the pandemic
May 11, 2020
BY ANNA LIMA
More people working, eating, and exercising at home. It is no longer new that a handful of activities, that before, took place out of our homes, are for some time now, all happening inside them. But for the Brazilian foodtech 100 Foods, cooking at home is more than a trendy behavior during quarantine: it was their kick-off idea back in 2018, when the startup emerged.
“I’ve always had a life of sport and exercise and tried to maintain a better diet at home and I noticed that both here [in Brazil] and internationally, the market lacked healthier food options that helped us prepare better meals,” says co-founder and CEO Paulo Ibri.
Focused on a healthier cooking, the foodtech appeared exactly two years ago, in May 2018, offering plant-based products, but with a different perspective. Instead of creating brand new options for the consumer, 100 Foods targeted the reformulation of products that were already well-known by consumers, but without using animal ingredients.
Mayonnaise, catchup, and barbecue sauces – often associated with junk food consumption – are, in the startup’s version, plant-based, zero calories, zero sugars and sodium, and with no artificial chemicals. All the while bringing flavor and affordable price, Paulo tells.
“Our proposal is to offer more natural and healthy products. That is, mayonnaise does not necessarily need an egg or the exuberant amount of fats to have the same flavor that we are used to consuming. Avocado oil, for example, is a healthy replacement that does not alter the flavor”, the executive explains. Paulo recalls that he detected a few years ago how the healthy food market in Brazil was focused on snacks. “Potato chips, popcorn, things we call grab&go, but nothing helping them [consumers] to cook at home.” 100 Foods emerged to fill this exact spot.
From the total investment of BRL 1 million, the startup raised about BRL 700 thousand in April through a pre-seed round led by the Brazilian fund Orgânica 10.4.3. Resources will be focused on expanding the product portfolio and spreading the word about the brand with marketing efforts. Paulo says that the company is working to increase market share and expects to triple the revenue seen in the last year, which was about BRL 500 thousand.
Brazilian Institute of Geography and Statistics, IBGE, announced on Friday, 8, a drop of 0.31% in the Broad National Consumer Price Index (IPCA) of April, considered the country’s official inflation. Despite deflation in the month, food and beverage prices (1.79%) continued to rise and the growth rate accelerated compared to the previous month (1.13%). Meals at home increased from 1.40% in March to 2.24% in April.
“There is a relationship between the restriction of supply, expected in the first months of the year, and the increase in demand caused by the Covid-19 pandemic, with people going more to the market, cooking more at home,” explained the research manager Pedro Kislanov, in the institute’s memo.
In Brazil, as in other countries, grocery shopping is on the rise. Due to social isolation measures, food purchasing is one, among other consumer behaviors, suffering changes. While shopping carts are fuller, trips to supermarkets are happening less frequently. In the last week of March, according to research firm Nielsen Brasil, the frequency of purchases fell 6.5%, but the number of items in the cart rose 22%. Nielsen detected a greater purchase of basic products to cook at home, such as rice, beans, flour, oil, pasta, and fresh products.
With eyes on the regular consumer, those who buy from traditional categories on supermarket chains, but that are also starting to look for healthier options, 80% of 100 Foods’ sales come from supermarkets and health-focused stores. But the company also has its own e-commerce platform. “We’ve rolled out some campaigns such as free shipping on sales over BRL 60.00. Operations on our e-commerce increased by 40% [since the beginning of social isolation],” the executive points out.
However, Paulo explains that even with a higher volume on channels where the company has a digital footprint, such as their own online store and marketplaces, this operation has not yet paid off what it used to be their main strategy: tasting on physical stores, banned since March, and still without a forecast of resumption.
Plant-based products, especially sauces, are still struggling towards a paradigm shift, not only for consumers, but for supermarkets, that are still skeptical regarding the adoption of these products. “They are still reticent with the healthy and vegan product category, still thinking that is a niche. Flavor and price are still paradigms. That is a barrier to enter Brazilian retail chains,” he tells.
Growth amid the pandemic
Expand product portfolio, increase market share, and triple its last revenue. Plans are ambitious for 100 Foods, but the company has both feet on the ground. Asked about expansion plans, Paulo confirms, but adverts that not yet this year. “The focus is on the development of the Brazilian market and new product lines. Internationalization is being considered for some countries in Latin America, and Europe, that is a market a bit more open than the American, with less competition, both in industry and retail.”
The startup expects to grow three times in 2021, but with the crisis, the forecast for 2020 was reviewed from a previous 300% to something between 200% and 250%. A plan of new products and new categories, however, is fueling its optimism towards growth and market share gain. 100 Foods’ next release is the first plant-based hazelnut cream in Brazil without palm oil and sugar.
“It comprises all of our three pillars: healthiness, flavor, and sustainability. Without using animal ingredients and without using palm oil that is very harmful to the environment,” Paulo adds. Aiming at an affordable price, the new product is set to launch in the second half of this year.
“More and more people will become aware that cooking at home is cheaper and healthier, but for now is less practical. As we are a brand that manages to deliver a product that helps practicality and brings easiness, I believe that we will see interesting growth for us coming from this trend of cooking at home.” Although focusing on healthy meals for a few years now, this particular context could be the one to grant momentum for the foodtech.