Nourish Foods has entered voluntary administration after an investment deal with a major retailer collapsed. The healthy snack company had stalled its third equity raise to pursue the agreement.
In a letter to investors, founder and CEO Monica Meldrum said, “After 18 years of trading and leading the market with product innovation and driving forward the role of socially conscious business in Australia, we are devastated we have come to this point; not only personally, but also for the incredible support we have received from investors, our suppliers and our customers.”
Founded in 2005, Nourish Foods was the first Australian food company to achieve B Corp certification.
Its first brand was Whole Kids, a range of organic, allergen-friendly and nutritious snacks for children that are free of genetically modified organisms (GMOs), artificial colours, flavours or preservatives.
Earlier this year it launched two more brands – Offbeat and Just Add – aimed at the teen and infant markets as it looked to expand into a multi-brand health food business.
In May it launched its third crowdfund equity raise with Birchal after two successful rounds in 2020 and 2021. In 2020, it raised more than $1.1 million from nearly 600 investors and more than $1.2 million in 2021 from 500 investors. In the second round more than 20 per cent were re-investors from the first round.
In the last five years, it generated $23 million in revenue, with 27 per cent growth in FY22 on prior corresponding period. Sales in Woolworths grew 76.8 per cent in FY22, surpassing the category average of 10.6 per cent. (52 weeks to w/e 29/01/2023).
Tim Heesh and Mark Everingham of TPH Advisory have been appointed as voluntary administrators.
Heesh said the company lacked the working capital needed to keep the business running.
“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,” Heesh said.
Meldrum said they were shocked when the retailer pulled out “at the last minute”, leaving the company in “a precarious situation”.
“The negotiations and due diligence process took around two months, and we were very confident that the investment would proceed. Both parties appeared to be heading in the same direction,” she said.
“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. It is with great sadness that today we have formally appointed an administrator to handle the affairs of Nourish Foods,” she said.
Heesh said: “It is not often that a well-established business with reputable and trusted brands like these comes along. The business represents an outstanding strategic opportunity for an investor to acquire a brand portfolio that should ultimately become household names and leaders in the FMCG healthy snack market.”
The Administrators are currently seeking urgent expressions of interest for investors or for the sale of the business.
Expressions of interest close at 5pm AEST on Wednesday, 13 September 2023
