Article written by: Guy Dixon
In a world of grandiose business models, Shelby Taylor had a business pitch that couldn’t be more basic: chickpea lentil pasta.
Such a simple idea – a nutrient-rich, two-ingredient pasta, seeking to improve upon a common staple – enabled Chickapea, her Collingwood, Ont., company, to expand to grocery chains across North America in just four years, riding the surge in demand for healthier food.
Yet, beyond the idea, investors and business partners were interested in something else. “Ultimately, it was me they were investing in,” she said, “because most of my investors came pre-product,” that is, before the pasta was a saleable reality.
Researching health food market
Ms. Taylor was working as a magazine editor but found herself developing a passion in nutrition. She had recently married and was pregnant with her first son. Then, by chance, a local health-food store came up for sale.
Her ambition was never to own a health-food store for long, but it seemed like a good entry into the industry. She wound up turning the store into her own market-research lab, getting to know what customers were truly looking for in health food.
“I asked them tons of questions about what their families ate, what everybody enjoyed eating, what their struggles were,” she said. Her first idea was to create dried baby food. That changed to pasta.
“After interviewing so many people, it was pretty clear that pasta is a real staple with most families, but it isn’t something people feel generally great about feeding their families, because it’s low in nutrients. It’s pretty high in simple carbs. And for people with gluten sensitivities, it’s not an option, [nor with] people with diabetes.”
“That’s where the idea of Chickapea came from.” Chickpeas and lentils have a high protein content and are rich in fibre, iron and a variety other nutrients.
Developing the product
Ms. Taylor and her mother rented a small commercial kitchen in nearby Barrie, which had a restaurant-sized pasta extruder. They went to work manhandling chickpea flour into pasta. The flour can be unruly, but the addition of lentil flour helps to make it more palatable and the pasta-making process a little easier.
As she sweated it out in the kitchen, she didn’t see herself so much as proselytizing a change in how people eat, although “I definitely think it’s part of a larger movement, both toward plant-based eating and plant-based proteins, and toward convenient health foods.”
Sylvain Charlebois, director of the agri-food analytics lab at Dalhousie University in Halifax and professor of food distribution and policy, says there is a rapid, full-scale shift taking place throughout the industry toward healthier fare.
“Who would have thought a few years ago that a plant-based manufacturer would raise through an IPO almost US$4-billion?” he said, referring to the recent debut of shares of Los Angeles-based Beyond Meat, which makes meat substitutes and shook the industry with its initial public stock offering, ending its first day of trading with a market valuation close to US$4-billion.
Pitching to angel investors
One day, in the earliest stages of her four-year-old company, Ms. Taylor happened to hear of a business pitching competition at Georgian College. There was no monetary award attached, just a chance to pitch, and “I ended up winning best pitch, which was shocking considering it was so last minute.”
The founder of the Georgian Angel Network contacted her the next day, expressing further interest. Ms. Taylor started a Kickstarter campaign and received a grant through the Ontario Centres of Excellence. “And then I eventually did a round of investment with angel investors and travelled to the different angel groups in Ontario. I did all of that before we ever actually had a product.”
She said that “it took about a year and a half to actually get a real product, because we tried to make it ourselves” and could never have scaled up enough. She managed to find a U.S. pasta manufacturer to make the product, which was launched in Canada in 2016.
Then in 2017, businesswoman and media personality Arlene Dickinson and her District Ventures Capital fund helped to shore up the company’s expansion costs.
Finding compatible partners
Chickapea launched into the market with Neal Brothers Foods’ distribution arm, which was able to get the brand into independent health-food stores.
And then, “We were in Longo’s, Pusateri’s and Goodness Me very early on, and kind of grew through the natural-food chain. Since then, we have launched in Sobeys in Ontario, and we’re in Whole Foods nationally and in Loblaws as well,” she said. Chickapea is now in 3,500 to 4,000 stores across North America, she said. ”We didn’t expect this to grow as fast as it did.”
Chickapea also jumped to a manufacturer in Italy which helped the pasta look, cook and taste more like traditional pasta, although making it in Italy hasn’t raised the product’s price, because the new manufacturer is able to handle the production, packing and shipping, Ms. Taylor said.
Keeping prices competitive can be a small food company’s biggest difficulty, especially when large food companies sweep into that niche. Natural ingredients such as chickpeas aren’t cheap and larger competitors have the clout to keep ingredient costs down and retail prices low, Dr. Charlebois said. “Consumers are still in that mindset of bargain-hunting when it comes to food and that has to change in order to give some of these smaller companies a chance.”
Ms. Taylor is counting on the simplicity of the message to appeal to consumers, just as it did with investors. “They are looking for very clean [nutrition] labels, simple ingredients,” Ms. Taylor said. The two ingredients are, in a sense, the business plan.