Markets Demand To Be Satisfied
The Business of Food
by Jennifer Barney
Markets Demand To Be Satisfied
5-min read
Last week was about being first to market. Startups are risky business and in food, being first to market only increases that risk.
Having a great idea and a big hunch about the market is where most founders start. I’ve already talked about , so if you’ve done that and have a tiger-by-the-tail, how do you know when to really turn on the gas? These case studies will illustrate.
The gluten free craze is what brought cauliflower to prominence as not just a vegetable. First it was riced cauliflower then cauliflower crust pizza. Here’s the story of Caulipower and Cali’flour.
Both brands launched when the need for gluten free pizza crust was most acute. Restaurants were serving their versions and die-hards were making it from scratch at home – but there was no cauliflower version of Boboli in retail. In fact, that is how Gail Becker, founder of Caulipower came to start her brand.
Gail was a busy marketing executive with two celiac boys at home and when they asked for pizza, Gail made a cauliflower crust from scratch from an internet recipe. It took her 90 minutes and was just okay. She never made another one again, but her boys kept asking. That’s how it started.
Gail left her job in 2016
Launched Caulipower 2017
Landed 30 Whole Foods by February 2017
Took VC $ that same year and launched nationwide with Walmart
Year 1 revenues = $5 million
Fast forward 2020 revenues >$100M
Caulipower was first to market and Gail was (and is) a superstar. I don’t know this for certain, but I’m pretty sure Gail did not risk all her personal assets given that she got VC funding in her first year. So, had Caulipower failed, she would have lost Walmart and her investors would have lost money – no way to recover from that type of failure as there was no test-and-learn phase – but her family would be okay. Gail stands behind Walmart as a great launch partner because she wanted the products to be accessible to anyone, and she had VC lined up early, holding her hand in this decision.
Cali’flour, co-founded by Amy Lacey in 2016, also starts with a personal story. Amy was diagnosed with lupus and wanted to make a product for people with not only auto-immune disorders, but food allergies, diabetes, and for low-carb dieters. Cali’flour went through tons of iterations to get to a proprietary process with no fillers or additives.
2016 – 2018 available online only
With this exclusive D2C strategy reached $5 million in revenues year 2
Attracted VC in year 2 with super high EBITDA and no cash-burn
Reached $20 million in year 3
You can now find Cali’flour nationwide at major retailers
Amy tested and perfected, kept things simple with D2C, and grew organically before taking big leaps.
While gluten-free is still trending, low-carb is trending too (diets like Keto). So while Caulipower answers for the former Cali’flour answers for both.
For Cali’flour, the first two years were learning who cares and how big the addressable low-carb market could be (and who'd be willing to pay for it – though I’m not getting into price here).
Both brands have innovated beyond pizza to capture other unmet market needs. But the real story here is how one solution does not meet the demand for all the market – and markets demand to be satisfied.
All my best,
Jennifer
News
Alexandre Family Farms becomes the first certified regenerative organic dairy in the U.S.
Stryve Biltong (like jerky but air-dried) goes SPAC (also Channing Tatum is a celeb investor)
I'd love to hear from you - get in touch at jennifer@3rdandbroadway.com