Vegan dessert maker eyes 10M consumer market

Key points​

• Looking for ideas​ ​
• In the pipeline​​
• Remaining dairy-free​​

Freaks of Nature makes free-from vegan-friendly desserts, and in just 18 months we have gone from an idea on a napkin to being listed in four major retailers.

The idea to set up the business came after a conversation I had with a hospitality waitress at an England cricket Test match at Headingly. She was a vegan, and was telling our table how difficult it was to find good desserts – and it stoked something in my mind.

After looking at the market and walking around a number of stores, it quickly became apparent to me that she was right. With the growth of vegan, vegetarian and flexitarian diets – plus those who are lactose intolerant – I worked out that there was a potential audience of 10M UK consumers who would be suitable for the types of products we could make. So, that was good enough for me.

Looking for ideas (back to top)​​

It’s fair to say I was looking for ideas to start my own company anyway, having just spent the best part of a decade working for private equity-backed businesses.

I’m a qualified chartered accountant with a history of director-level positions at firms such as the Shop Direct Group and Ventura Customer Services, a subsidiary of Next.

But I’m also a foodie, who’s always comfortable in the kitchen. That’s why I had no qualms in hiring some space at Leeds Beckett University to develop some concept products.

From there, I employed agency Big Fish to help develop the brand, and they were the people who came up with our name. The thought behind it is that by taking natural ingredients and making something great tasting, we’ve created a freak of nature – but not in the pejorative sense.

In September 2016, I took my concepts to the trade show Lunch!, where Tesco expressed interest. A month later, they said they wanted to list me by the following April – so from there things moved very quickly.

This factory in Ossett, West Yorkshire, was a shell when we took it over in October 2016. With the help of a former chairman I worked for – plus a £100k grant from Leeds City Region Enterprise Partnership – we invested a multi-million pound figure into turning it into a state-of-the-art facility with all new equipment. And we had everything up and running by March.

Currently, we make four single-serve products – two puddings, and two cheesecakes. Each is based on a cashew blend, infused with natural ingredients. I’ve nothing against E-numbers, but we’re not going to go down that route.

By only using natural sweeteners, some of our products have up to 50% less sugar compared with our non-vegan competitors. In fact, one of the reasons Waitrose decided to list us was because they were particularly pleased we were driving innovation in an area Public Health England is so heavily focused on.

The plan with the building was to have the infrastructure in place, and then fill the volume. We currently average around 7,000 pots a day, but if we ran 24/7 and added a couple of extra lines, we could easily surpass 100,000 a day.

In the pipeline (back to top)​​​

I don’t want to shout too loudly about our new product development, but there are some exciting new desserts in the pipeline. Some will take us away from the cashew base as well. Six months from now, I expect us to have 10 products on the market.

Everything is a trial and error process. Working with our head of innovation Jason Brown, we try to find non-dairy ingredients that offer equivalence to the traditional versions.

We know, for instance, that flaxseed has similar properties to egg white – it’s about harnessing that knowledge and building products around that.

Texture, consistency, and the interaction of ingredients are all challenges when making these products – but ultimately, it all comes down to taste.

We’re replicating desserts that consumers will be familiar with, so it’s vital that our products stand up to them. If we call something a ganache, they will expect it tastes like ganache.

When I first started looking at the free-from market two years ago, some of the products were shocking. But things are changing so quickly, and we’re well-placed to take advantage.

Retailing at £2.30 each, I appreciate the products are not cheap – but we will be soon creating fruit pots that will come in under £2.

Remaining dairy-free (back to top)​​​

I have toyed with the idea of using egg, as it would transform the way we work. But we are going to do our best to keep everything dairy-free and gluten-free, as the opportunity remains huge. While it’s the retailers that give us the volume, our aspiration is to move into foodservice and the food-to-go market.

Currently, we have to send some products out on the day they are made, but our plan is to freeze all products, as they can be recovered to chill. This will make us more efficient, and in due course enable us to look at export markets.

As we’re still a small business, everyone wants a minimum order quantity, and nobody wants to give me decent payment terms. In fact, two of my customers are on 60 days. But, as we grow, I’ll be able to take advantage of economies of scale, which will enable me to reduce my selling price.

On our current thinking, we believe we can get turnover to £8M–£10M in around three years. My aspiration at the start was to get to £10M–£20M, and see where we go from there.

I realise I’ve been lucky in that I’ve had the money to be able to go straight from nothing to being listed in the major retailers. But to do this you still need to have great products – and we certainly believe we have.