Nourish Foods Pty Ltd, the parent company of organic children’s food brand Whole Kids, has been placed in voluntary administration, just months after it failed to raise $1 million via crowdfunding.
The 18-year-old B Corp-certified family business is now being put on the market by administrators Tim Heesh and Mark Everingham of TPH Advisory after suffering a surprising capital crisis for such a mature venture that was often seen as an entrepreneurial success story.
Tim Heesh said the administrators intend to work with founders Monica and James Meldrum and key stakeholders to the next steps, including seeking expressions of interest for either a recapitalisation or the sale of Nourish.
“The business has been placed into voluntary administration due to a lack of working capital required to support the business. The owners had been attempting to secure a financial investment partner over the past few months, however time has run out and their working capital requirement became urgent,” he said.
“It is not often that a well-established business with reputable and trusted brands like these comes along. The business represents an outstanding strategic opportunity for an investor to acquire a brand portfolio that should ultimately become household names and leaders in the FMCG healthy snack market.”
The Meldrums began Nourish in 2005, as a healthy snacking brand, saw Whole Kids sales at Woolworths grow by 77% in Woolworths in the last year, had launched into Chemist Warehouse and were on track to hit Coles shelves later this year.
After generating $23 million in revenue over the past five years, they launched two new brands: Offbeat, to appeal to Gen Z snackers and Just Add, in the infant pouch category.
The business had previously raised around $2.4 million from more than 1000 backers across to previous crowdfunding (CSF) campaigns, and was hoping for another $2 million-plus when it kicked off a fresh Birchal campaign in May.
But Nourish set a high bar in seeking a $1 million minimum commitment and when that level of support failed to materialise by mid-June, the investment didn’t proceed. On Tuesday, the voluntary administrators were called in.
Monica Meldrum said they are “heartbroken that it has come to this point” and believes that Whole Kids remains a great opportunity with the right funding in place.
“We are so grateful to our investors, suppliers and our customers for the incredible support we have received. We want to thank every one of them from the bottom of our hearts for supporting us and we wish we had better news today,” she said.
We are now turning our minds to working with the administrator to seek expressions of interest for either a recapitalisation or sale of the business so that we can realise the opportunities that we have secured and see the business go on to reach its full potential.”
Expressions of interest for investors or for the sale of Nourish Foods close next Wednesday, September 13. Contact TPH Advisory for details.