A tiny Israeli company thinks it has developed a product that can successfully compete in a giant industry. It won’t take long to find out if they’re right because the product will be introduced in the US in 2020 and in Europe a few months after that. If they’re right, significant growth could follow.
The company is Tel Aviv-based Else Nutrition, and their product is infant and toddler formula. There is no shortage of companies that sells this kind of product, but Else’s formula addresses an important niche the other brands don’t.
Typically, infants and toddlers consume mother’s milk or cow’s milk for their nutritional needs. But this can create difficulties. Some children, for example, suffer from allergies and others are lactose intolerant. Else’s plant-based formula, which took five years to develop, avoids these problems because it is made entirely from almond milk and buckwheat.
“It is a near-perfect alternative to breast milk,” Hamutal Cohen Yitzhak, one of the company’s co-founders, told the website Israel 21c.
Almost all of Else’s co-founders have experience in the infant nutrition industry; Hamutal Cohen Yitzhak, for example, had been a manager at Israel’s Similac infant formula plant. And all of the co-founders have put up their own funds to launch Else.
The Mother Of Invention
The idea for Else’s alternative baby formula was the result of personal experience. The 10-month granddaughter of Uriel Kessler, another co-founder, was having problems digesting mother’s milk, cow’s milk, and even a special hypoallergenic formula; she vomited after every meal, which slowed her growth and also led to respiratory problems.
Yitzhak and Kessler, who had been working together to develop baby snacks, switched gears and began searching for a solution for Kessler’s granddaughter. They discovered that almond milk had important similarities to mother’s milk, and when they used this to feed Kessler’s granddaughter, her health began to improve.
But almond milk alone, despite its benefits, doesn’t provide all of the nutrients young babies need for proper growth and development; there is still a shortfall in the proteins and carbohydrates they receive. After further work, Yitzhak and Kessler found that buckwheat could supply the additional nutrients babies needed.
The retail value of the baby formula market worldwide is expected to reach approximately $62.5 billion by 2020, more than double the number it was in 2010.
Initially, the primary market for Else’s formula will be infants and toddlers who, for various reasons, have an intolerance for conventional formula. However, since their product is completely plant based, it may also appeal to the vegan market, which is already substantial and growing steadily.
Over 90% of the baby formula currently on the market includes cow-based proteins. By contrast, Else’s baby formula is both dairy- and soy-free – the first of its kind in the world. “Our product is plant-based, is vegan, and is also extremely healthy and all natural,” she says.
Childcare expert Hagit Miller told Israel 21C that there is no perfect substitute for mother’s milk. However, since this option is not feasible for some children, an alternative is necessary; until now that substitute has often been soymilk.
However, some research has indicated that soymilk may damage a baby’s hormone system, Yitzhak said. Other firms have attempted to develop formula from rice but were unable to eliminate low levels of arsenic that are sometimes found in the grain. Since Else’s alternative baby formula eliminates these problems, it could potentially appeal to a wider market than originally targeted.
When the product becomes available for sale next year in the US and Canada, it will initially be sold online, and subsequently may become available through health food stores. And in the long term it may also be sold through supermarkets.
Although Else’s baby formula hasn’t yet hit the market, it has already garnered attention in important circles within the industry and beyond. The product has already won several awards, including “Best Health and Diet Solution” at the Global Food Innovation Summit in 2017 in Milan.
It was a finalist at the startup competition at Israel’s Food Tech last September, and in London’s Foodbytes competition in November.
It also has been noticed by the investment community in Canada, as a group of investment brokers from the firm Canaccord Genuity Corporation recently invested $5.7 million in the company. Following this purchase, Else’s stock was listed on the Toronto Stock Exchange.
Although a very small company now – there are just 10 employees – that could change going forward. In fact, Else is preparing for mass production in order to meet potential demand when the baby formula is launched next year.
According to Yitzhak, baby formula could be just the beginning of their growth. “We hope to develop products based on this concept for the entire family from infants to the elderly,” she said. A lot of people are waiting anxiously for that.
Like the babies it caters to, Else Nutrition just may grow from infancy to one of the big players on the block.
Sources: finder.startupnationcentral.org; israel21c.com; statista.com