How sweet it is: No-sugar Noshu ready for expansion
Sugar-free snack food producer Noshu Foods has launched a capital raising with the aim of expanding into international markets including China, Britain and Europe.
Sugar-free snack food producer Noshu Foods has launched its maiden capital raising from family offices and high net worth individuals as it works to expand into international markets including China, Britain and Europe.
The Noshu brand – a play on the words no sugar – was established in 2013 by entrepreneur Rachel Bajada and the food technology group now offers reduced-sugar snack products such as doughnuts, low-carb indulgence bars, nut bars, pancake and cookie mix.
Earlier this year it launched chocolate-based confectionery.
“We will be doing more in that space because there is a lot more scope for growth and innovation in the confectionary aisle. The multinationals are finding it hard to innovate in this space and to stretch into a premium price point. We have the right consumer proposition and brand to do that,” Ms Bajada said.
“We have spread our broader product range across ready-to-eat and ready-to-bake but the market is definitely moving towards ready-to-eat. People got burnt out of baking, being stuck at home during Covid-19.”
Plans are now under way for Noshu to begin serving markets outside Australia, including launching a product with a major retailer in Shanghai.
Its products are sold at Woolworths, Coles and IGA supermarkets, and exported to New Zealand, Singapore, Hong Kong and Malaysia.
“At the moment we are in nearly every major supermarket in Australia and have great distribution in New Zealand. We are exporting to a bunch of Southeast Asian countries and about to begin exporting to China. The opportunity is enormous there because they have a massive population and huge type 2 diabetes issues,” Ms Bajada said.
“We also see a real opportunity in the UK and Europe. We will be selling a select range of our products there.”
The European expansion will including partially manufacturing products within Europe to improve distribution and time-to-market, rather than shipping them from Australia.
Noshu is now actively raising its first external capital to fund its growth plans after self-funding all its growth over the past decade.
“We are doing that in bite-sized pieces, mostly from family offices and high net worths,” Ms Bajada said.
While the group has previously considered bringing in an industry partner to support growth, it is now determined to proceed alone.
This financial year Noshu will generate $38m in sales and it is forecasting that number to grow by 2.5 times over the next three years.
It has been profitable for the past five years. Over that period Ms Bajada estimates Noshu has generated $100m of retail sales for Australian retailers, of which $40m would not exist in the absence of its product portfolio.
“It is a lot to manage as it is a fairly sizeable business with substantial growth and we want to keep growing … But for us it is important to remain independent over the next few years. There can be a lot of benefits to bringing a strategic partner on but there are two sides to it. Being able to grow independently over the next three to five years is really important,” Ms Bajada said.
Noshu Foods is a product of the challenging reality that many of Ms Bajada’s relatives – including her grandmother on her mother’s side and some aunties and uncles – have type 2 diabetes and cannot eat food products that are high in sugar.
It led Ms Bajada at the age of 30, upon returning to Australia after living in France for two years, to become paranoid about being diabetic herself.
“So I went on a lot of artificial sweetener products. I actually became insulin-resistant as a result because I was drinking a lot of synthetic sweeteners. It is the step before becoming a diabetic. I found I was doing it all wrong,” she said.
“I then only went for natural sweeteners, things that exist in nature. Within months my blood tests returned to a healthy state. That gave me the inspiration to set this business up.”
Her grandmother now has Noshu products delivered by family members to her nursing home in Sydney.
“We are a business for purpose so we always have had that calling. The consumer buys into our proposition because it is not just about the what, it is about the why. All of our chocolates and cocoa products come from Rainforest Alliance suppliers,” she said.
“We have also removed non-recyclable hard plastics from our supply chain and want to do more.
“Now we are looking at how we reduce non-recyclable hard plastics and what products are out there to replace them.
“It is something we are taking very seriously.
“I have a three-year-old daughter and I want to make a difference for her.”
Before establishing Noshu, Ms Bajada worked largely in marketing roles for News Corp, Grey Group EMEA and Pallion/ABC Bullion.
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