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OTTOs Barnmat

Fresh Organic Baby Food

Fresh Revolution on the Baby Food Shelf.
 
OTTO offers Fresh Organic Baby Food and is in the verge of changing a whole category that has been in standstill during the last 50 years.
 
The truly experienced Founders Team behind OTTO have also launched ProViva and Oatly among other brands. The R&D-centre at Ideon Science Park in Lund is lead by Professor Rickard Öste, a World Class innovator and Founder of Oatly.

Started as a unique home delivery concept in Stockholm 2013, via selected stores into full central distribution 2016, the company is now ready for a rapid growth!

Investor proposal

The Small Ones deserve Better Food!

Join our mission to change this category once for all, from over-processed glass jars and powder, to food that we eat. Our beloved fans appreciate our initiative - so do the grocery chains - and not to forget: new probiotic products are in the pipe!
 
  • You can join at a minimum investment of 2751 SEK (1 share) and upwards.
  • 6 MSEK out of total 9 MSEK is already invested by Lead Investors in March 2017.
  • Future exit strategies includes a future Trade Sale and/or Partnership, but also listing.



Product

The problem this product solves

The consumer market is on high alert when it comes to food. Transparency is a given, except when it comes to baby food. Old, hidden processes: overheated sterile food in glass jars or powder, food that adults would not even consider. We take fresh & organic for granted nowadays but baby food remains rooted in the 50s.

We are asked by leading scientists to change baby food. Why? 
1. High GI-Insulin response
2. High levels of AGE, inflammatory substances.

Any Consumer Insight? Parents are sceptical to years of shelf life.
Industrial baby food is safe, but good enough? Definitely Not.

How the product solves it

We offer a better way of making food for babies and toddlers. Our fans appreciate the better taste, and "..that you dare to take the fight against the Giants”. In any case we should ask: Is it reasonable that we continue to feed our kids with powder and cans we would never eat ourselves?

The Otto philosophy; best selected organic raw material, no additives, smooth processing and rapid cooling.

Our oatmeal drink (välling) and smoothies are based on fresh organic milk with natural fat content and Swedish oats. Same with our new probiotic range, developed together with Probi. 

Product features

Two of every three Swedish children drink 'välling' every day, from 6 months of age and up to two or three years. A portion is normally 200-250 ml per serving.

Our new range of yoghurt/smoothies, OTTO New Generation, will consist of smaller portion packs, from 100-150 ml. The products will be prebiotic (feeding the important microflora) as our 'välling', with well kept soluble fibre, betaglucans - and probiotic - loaded with healthy bacteria for a good start of life, when the immune system is developing and being programmed. This product range will also suit toddlers from 3-6 years.

Product use cases

In Sweden it is common is to serve 'välling' as morning and evening meals, or as a snack between meals. Over 100 million portions of 'välling' are served every year in Sweden!

Team

Mats  Lönne avatar
Mats Lönne CEO & Founder
Food entrepreneur, former Brand Manager ProViva (6 years), Wasabröd (1 year), Ostkompaniet (2 years). 8 years experience as Brand Consultant, Strategist & Client Director at several Advertising agencies. Married with Tove, Co-founder, 3 kids including Otto. MSc in Business Administration
Tove Lönne avatar
Tove Lönne Sales Manager Online, Customer contact
Co-founder, entrepreneur. Self-driven networker with more than 10 years experience from Event Marketing. Responsible for the 24-7 Customer contact, on/offline. Key Account Manager for otto.se, Mat.se and Mathem.se. Married with Mats, 3 kids including Otto.
Rolf Bjerndell avatar
Rolf Bjerndell Chairman & Founder
Long industrial experience. Former CEO (10 years) of Skånemejerier (Skåne Dairy, ProViva), OATLY, Probi. Several executive business positions. MSc in Business Administration
Rickard Öste avatar
Rickard Öste Professor & Founder
Serial entrepreneur in food and nutrition (Agrovision, Graincheck, OATLY, United Pancakes, Glucanova, OTTOs Barnmat etc.) Professor & PhD at Food for Health Science Centre of Lund University. Responsible for OTTOs R&D.
Lennart Alftrén avatar
Lennart Alftrén Director Product Development & Founder
One of Swedens most experienced product developer of Food, former R&D Manager at Felix (Orkla), independent food entrepreneur since 20 years, experience from Baby Food Industry. Head of OTTOs product development team, expert in food & nutrition. MSc in Food & Nutrition.
Björn Öste avatar
Björn Öste US representative, Board Advisor & Founder
More than 25 years of international experience from entrepreneural-driven companies (Dynasoft, OATLY, United Pancakes, OTTOs Barnmat, Glucanova etc.). MSc in Industrial Economics
Pär Lundqvist avatar
Pär Lundqvist CFO, Board Member & Founder
More than 20 years of experience from food industry and marketing. Both from start-up companies and established businesses (Felix/Procordia, Potatisspecialisten Scandinavia AB, Culinar, OTTOs Barnmat etc.). CFO at OTTOs Barnmat. MSc in Business Administration.
Olof Böök avatar
Olof Böök PhD in Food Biotechnology - Head of Production
More than 15 years of experience from start-up companies (OATLY, United Pancakes, Glucanova, OTTOs Barnmat, Berries by Astrid etc.). Team member OTTO R&D.

Market

Target Market

Annually, the Swedish Baby Food Market has a turnover of SEK 1400 million, of which oatmeal ("välling") accounts for 380 million of sales. A majority of oatmeal ("välling") is made of powder, which we want to change!

A huge volume, 28 million litres, makes the sub category interesting, to convert from "old" powder to ready-to-drink. We are also aiming for Baby Food Snacks such as yoghurt & smoothie, and RTE-meals. Our unique Fresh Organic concept adds both innovation and value to the whole category. Toddler- & foreign markets to be added. Read more in our Business Plan.

Competitive landscape

Our market is still dominated by a few international players. The industry has long been the same and the willingness to change is generally low because of the existing industrial structure with long shelf life built upon powder and glass jars.

This status quo, high entry barriers and few other initiatives are assumed reasons that innovation has been so low. The Dairy Industry, which we come from, is a potential competitor with its rapid cool chain and much higher level of innovation. However, three other start-ups, though not fresh, are signs that parents are seeking for alternatives. See Business Plan!

Unique differentiator from competitors

We are an independent Swedish company with a clear mission based on a world-unique platform; the only Fresh Organic Baby & Toddler Food, based on milk & oats. Our world class R&D-team lead by Professor Öste at Ideon in Lund has created OTTO Next Generation, pre- och probiotic baby & toddler food that is ready for launch in 2017-2018.

Our first range, Fresh Organic Oatmeal differs from all alternatives: developed together with other parents, smoothly processed, based on oats and full fat milk - not milk powder, not overheated. No unnecessary additives, palm oil or maltodextrin. Enough said.

Company revenue streams

Sales and Distribution to central hubs of Ica, Coop, Axfood, Mathem.se, Mat.se and otto.se on a weekly basis.

Focus on increasing the number of stores, sales per store - supported by a new sales force, a new communication concept and new product launches in 2017-2018. Penetration is still relatively low, i.e we have very loyal fans buying a large number of units - they are our real ambassadors. Revenues are volume-driven, and building distribution goes hand in hand with building brand awareness, trial and trust.

Turnover was 3 MSEK in 2016, now we have the platform to scale-up the company.

Product/service distribution

FULL DISTRIBUTION POWER!
All major Grocery Chains contacted us and asked for listings - from 2016 we deliver weekly via central distribution through Ica, Coop, Axfood and the online retailers: Mathem.se and Mat.se. Goal 2017: to go from 100 to 400 stores: In May we roll-out our sales force for the first time!

We started with our own home delivery, chilled OTTO directly to your door - and built the community including leading bloggers and celebrities. It is still a strategic channel and not to forget: a Brand builder, we know our end-users and get feedback 24-7. True Open Innovation!

Execution

Previous milestones/traction

2012: Founded by Mats & Tove Lönne, together with Food Entrepreneurs, Professor Rickard Öste, Founder of Oatly, Rolf Bjerndell, former CEO of Skånemejerier, Alftrén/Lundqvist, R&D-specialists
New production set-up at Falköpings mejeri, partnership with Oatly.
2013: Launch - the world's first commercial fresh baby oatmeal - home delivery in Stockholm.
2014: Direct distribution to stores in Stockholm, Gothenburg and Malmö.
2015: Agreement with Sweden's largest food chain ICA.
2016: Coop, Axfood, Mathem.se, Mat.se, partnership with Probi - new range in pipe.
2017: A first round of investment of 6 million SEK, of total 9 MSEK. Our first Sales Force!

Next key objectives

2017: From 100 to 400 stores, from 3 MSEK turnover to 10 MSEK. New assortment.
2018: From 400 to 600 stores, 20 MSEK turnover - break even 31/12. New assortment.
2019: From 800 to 1000 stores, 40 MSEK turnover + export
2020: From 1000 to 1200 stores, 100 MSEK turnover + export

Previous Financing

2011-2012: Founders Team
2012 (July): Almi Invest (gov) + private investors
2013-2016: Internal & Almi Loan (net 700.000 SEK)
2017: OTTO 2.0: New investors (Lead Investors)

Partnerships

Several; listed at all leading Food Chains - available for all stores - on a daily basis through central chilled distribution (Ica hub, Coop hub, Axfood hub etc).
Agreements (Ica grundavtal, Coop grundavtal, Bergendahls, Axfood, Mathem etc.
R&D/production; several agreements.
Partners: Aventure/Glucanoa, Oatly, Falköpings Mejeri, Bring, Probi among others.

Use of funds

Total 9 MSEK (of which 6 MSEK invested by Lead Investors in March 2017)
  • Launch New assortment; in pipe, final design (15%)
  • Develop our 7 channels - distribution platform well established (15%)
  • Recruit 2 Key persons (20%)
  • Marketing & PR (40%)
  • Hire of Sales force (10%)

Industry Certifications/Awards

ORGANIC (EU) - certified by Kiwa.
IP-certified (for Trade) by Kiwa.
KRAV-labeled raw material.
Top 10 Future Food Company (Svenska Måltider, Livsmedelsbranschens magasin)
Speaker at Food Vision in Cannes 2014

Return on Investment

Please see Financial Forecast. Our goal is to reach break-even no later than Dec 31/12 2018.

Our exit strategy includes a future Trade Sale and/or Partnership, but also listing. A number of Big Food Companies have already shown interest in OTTO. Please read about other cases in the attached Kids Nutrition Report (attached documents), the well renowned magazine made a 6-page case about OTTO already in 2015.

Risk Analysis

In our endeavor to change the Baby Food industry, we still have several obstacles to climb. Today we have a comprehensive distribution to all major food chains on a weekly basis. Distribution is not an obstacle, but old habits and that we seem to forget the small ones are relevant obstacles. To succeed in achieving our goals, we need to strengthen our organization, and reach out with our message so that more people realize the difference between fresh and ambient. We also need to launch a wider assortment. Our plan, OTTO 2.0, is prepared to meet these goals!