Aussie startup Hello Friend Foods has raised $670,000 in an equity crowdfunding campaign, as it gears up to dominate the plant-based cheese space in Australia, and internationally.
Through a Birchal campaign, Hello Friend smashed its $500,000 minimum target to raise a total of $672,000 from 572 investors.
The business is the brainchild of appropriately named co-founder Bree Gaudette.
After about a year of veganism, she was frustrated at the scarcity of good-quality dairy-free cheese substitutes on the market.
So, drawing on 20 years’ experience in food service and hospitality, she took matters into her own hands, and started experimenting, she tells SmartCompany.
“Cheese was the last thing I gave up,” she explains.
“There has to be a better way for people to be able to make the decisions they want to make.”
By 2018, Gaudette had created a cheesy product she was happy with. And, it was about this time she met her co-founder Matthew Ronalds, through the most serendipitous of circumstances.
“He actually picked me up while he was driving for Uber,” she recalls.
In a wholly unusual Uber chat, the pair found themselves talking business, sharing their passions and divulging their business experience.
“We became quick friends,” Gaudette says.
“Shortly after, we decided to go into business together … we just kind of clicked.”
For the past two years, Gaudette and Ronalds have been testing the market, figuring out what’s viable and what’s not, and what people want.
Now, Hello Friend Foods has three products on the market — a mozzarella-style cheese, a halloumi-style cheese, and a vegan ‘cheese’ sauce — in 50 stockists.
It also sells through an online store, “and orders are ever-increasing”, Ronalds says.
“We go through 140 kilos a week, minimum, of cheese.”
That’s with very little investment in marketing.
Now, the co-founders are confident in their products, and ready to ramp up production, marketing and, ultimately, sales.
“It’s viable,” Gaudette says.
“Let’s bring this to market properly.”
The full package
As is often the case, the decision to go down the equity crowdfunding route was based on a desire to be community-focused.
The co-founders have built strong relationships with their core customers already, Gaudette says.
“We really wanted them to have the chance to come on board with us and grow with us.”
Through the Birchal campaign, Hello Friend smashed its $500,000 minimum target to raise a total of $672,000 from 572 investors.
That will allow the business to ramp up its manufacturing process, producing more product and supplying more retailers.
The team will also be investing in further R&D, and bringing food technicians on board, with a view to extend their products’ shelf life and ultimately expanding the product range.
Finally, the funding allows the startup to start using plastic-free packaging, something the founders are “super excited about”.
“It’s made from corn, rice and potatoes,” Gaudette says.
And it’s designed to be compostable at home, without going off itself and causing more food waste in the long run.
“We’ve been wanting to make that change for a while.”
Recipe for success
This is far from the only alternative cheese product on the market. Australia is reportedly the second-most vegan country in the world, judging by Google search trends. And, specialist supermarkets, delis and the grocery duopoly alike are catching on.
Diplomatically, Ronalds admits that while some of Hello Friend’s competitors produce excellent dairy-free dairy, there are some shocking attempts out there too.
First and foremost, the co-founders’ goal was quality, he stresses.
“We wanted people to be blown away.”
But, part of what sets these products apart is that the recipe uses soy milk as its base, rather than nuts.
Again, Gaudette stresses that there are delicious nut-based cheeses around.
“But, we haven’t yet found a nut-based cheese that actually tastes like dairy.”
It also opens up the market of people who are allergic or intolerant to nuts, she explains, as well as those who are lactose intolerant.
“More to be done”
This funding comes at a time when the plant-based protein trend is hitting its stride in Australia.
Just this week, plant-based meat startup v2food announced its burger and mince products would be stocked in 600 Coles stores, meaning its products are now on the shelves of 1,400 Aussie supermarkets. Coles also stocks chicken-free chicken from New Zealand startup Sunfed Meats.
Fable, the plant-based meat startup headed up by Shoes of Prey founder Michael Fox, has secured backing from Blackbird Ventures and Grok Ventures, the latter being the VC fund of Atlassian co-founder Mike Cannon-Brookes.
It’s now in 50 Aussie restaurants and pops up in Marley Spoon meal boxes, as well as in Woolies stores all over the country.
Meat alternatives are becoming more mainstream, and Gaudette says plant-based cheese is set to follow.
“It’s already happening,” she says.
“You can see it all around the world. Little baby startups are just starting to grow, and they’re getting a lot of attention.”
But the founders don’t shy away from the competition. More demand for vegan-friendly cheese can only drive the sector forward, pushing businesses to be ever more innovative with their products, and thereby inspiring more people to try them.
“There’s so much more to be done in that area,” Ronalds adds.
“It’s just going to keep going.”
Mountains of cheese
In the long run, Gaudette and Ronalds see themselves competing on a global scale with international vegan cheese brands.
“We have the products and we have the ambition, and now we have the funds to take it to the next step,” Gaudette says.
But first, she’s facing her personal Mount Everest: perfecting a dairy-free cheddar.
“That’s what I miss most of all — a good, strong, sharp, crumbly cheddar … I’ve tried a lot of vegan cheeses and no one has even come close to it,” she says.
“That’s what I want to nail.”