Nourish Food, the Melbourne-based kids snack food company behind the Whole Kids brand, is urgently seeking a buyer and appointed voluntary administrators after a deal with a “major strategic partner” fell through.
Monica and James Meldrum founded Whole Kids in 2005 after seeing a gap in the market for organic, plant-based and additive-free snacks for children. The company raised more than $2 million across two crowdfunding campaigns and was considering a third round.
In late 2021, the business inked a deal with Pinkfong, the South Korean entertainment unicorn which created YouTube video sensation Baby Shark, to coincide with its broader expansion efforts into Asia.
The company saw its sales boom during the pandemic and generated more than $23 million in revenue over five years, according to Nourish Foods’ page on crowdfunding site Birchal. Earlier this year, it added two new snack brands to its portfolio, Just Add and Offbeat, but appears to have run out of cash after failing to secure financial backing.
Meldrum told investors in a letter that the company had spent two months in negotiations and due diligence to secure investment from a major retailer, which it felt “very confident” would proceed.
“Both parties appeared to be heading in the same direction,” she wrote. “The investor, however, decided at the last minute not to proceed, much to our shock.
“We are devastated we have come to this point,” she added.“With no capacity to relaunch our crowdfund campaign and no other realistic option to fund the business, we faced the difficult position of considering voluntary administration.”
Nourish Foods appointed TPH Advisory’s Tim Heesh and Mark Everingham as voluntary administrators on Tuesday, ASIC records show.
“The business has been placed into voluntary administration due to a lack of working capital required to support the business,” Heesh said in a statement on Wednesday. “The owners had been attempting to secure a financial investment partner over the past few months, however time has run out and their working capital requirement became urgent.”
He added that the company “represents an outstanding strategic opportunity for an investor to acquire a brand portfolio that should ultimately become household names and leaders in the [fast-moving consumer goods] healthy snack market”.
Nourish Foods has supply deals with Coles, Woolworths, Chemist Warehouse and some airlines, and also inked deals with major Singapore grocery chain NTUC FairPrice and New Zealand supermarket chain Countdown.
It was the first Australian food company to be a certified B Corp business – a badge awarded to companies that demonstrate high standards of social and environmental awareness across their supply chain and business model. In its first crowdfunding raise, Nourish Foods attracted backing from Adore Beauty founder Kate Morris and Business Chicks chief executive Emma Isaacs.
Potential buyers interested in the business should contact the administrators, with expressions of interest closing 5pm next Wednesday.
Meldrum and Heesh have been contacted for further comment.
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Source: Thanks smh.com