Dive Brief:
- Childhood food allergy prevention company, Ready, Set, Food! received a $3 million round of funding led by Danone’s investment arm, Danone Manifesto Ventures, Mark Cuban and AF Ventures. The money will be used to help prevent babies from developing severe food allergies to peanut, egg and milk. The cash infusion brings the company's total funding to $5.6 million.
- The physician and parent-led company has developed a safe method of introducing peanut, milk and eggs into babies’ systems by adding a daily powder packet to their bottle. This method can reduce the risk of a child developing food allergies by 80%, the company said in a statement.
- Ready, Set, Food! recently launched new Peanut Only and Peanut + Egg early allergen introduction systems. The Peanut Only system benefits families who have children with existing, diagnosed milk and egg allergies. The Peanut + Egg system helps parents whose children have an existing, diagnosed milk allergy.
Dive Insight:
The prevalence of food allergies has steadily been on the rise in the United States. In 2013, the U.S. Centers for Disease Control and Prevention published a study showing food allergies among children increased by about 50% between 1997 and 2011. An estimated 32 million people in the U.S. have food allergies, according to Food Allergy Research & Education.
The severity of these allergies also is worsening. FAIR Health published a study using insurance data that found the number of people who need emergency treatment for food allergies had increased 377% from 2007 to 2016.
With these numbers in mind, it's no wonder there is growing consumer demand for allergen-free products that has helped move these items from niche to mainstream. Although many manufacturers are investing in reformulations of old standbys or releasing new allergen-free lines, replicating the flavor and texture of certain ingredients, like gluten or dairy, can be difficult.
In addition, becoming certified allergen-free can be a headache for manufacturers, requiring more paperwork and tons of testing — both of which come with a price tag. In some cases, it can even require separate manufacturing facilities, which could easily become an expensive undertaking with eight — and potentially nine — major allergens on the Food and Drug Administration's list.
The allergen space is booming and many manufacturers are taking advantage of the growing free-from market. According to Mordor Intelligence, the global free-from food market is projected to have a compound annual growth rate of 4.84% through 2023, driven by interest in dairy-free and gluten-free segments.
Nestlé also in the allergen-free food space, which has seen a boost because of clean-label and non-GMO trends. It produces Nestlé Toll House Simply Delicious Morsels, which only contain cocoa butter, cane sugar and chocolate. But it's far from the only big food company there. Mondelez owns Enjoy Life Foods, which doesn't use 14 common allergens in its extensive line of snack products — including wheat, peanuts, tree nuts, dairy, casein, soy, egg, sesame, sulfites, lupin, mustard, fish, shellfish and crustaceans.
With this latest investment, Danone's venture arm builds on its mission of supporting and developing new companies with high-growth potential that encourage healthier eating and drinking. It's the latest push by the French company into the allergy-free space. Last year, Danone launched Marty’s, a new brand targeting children who are affected by allergies, in the U.K.
For Danone and other companies, working to eliminate allergies can benefit them financially. By slowing the prevalence of allergies, more people could have additional opportunities to consume their products. In the case of dairy, Danone could see a boost in sales for its yogurt brands such as Activia, Danimals and Two Good.
However, dairy has not been the primary focus of Danone's venture arm. Since its launch four years ago, it has invested in companies including Sustainable Bioproducts, an alternative protein manufacturer; Yumble, a children's meal delivery company; Harmless Harvest, which makes coconut products; and Forager Project, a company that produces organic plant-based foods and beverages.
The approach to early introduction of allergens that Ready, Set, Food! has developed is one that was recently reinforced by a study published in the journal JAMA Network Open. In the study, researchers found introducing peanuts into an infant’s diet between four and six months can help prevent the development of an allergy. Danone's latest investment in Ready, Set, Food! is a nominal amount that could pay off in a big way if the upstart is successful in its efforts, and having the financial backing of the CPG giant is a big step in reaching that goal.