January 12, 2024

Photo by hui sang on Unsplash

Can the DTC Brand Little Spoon Continue To Thrive?

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The baby food market has drastically evolved over the years and is now full of stifling competition and a myriad of choices for parents with families. Currently, multiple successful companies are succeeding in the market, once ruled by only a handful of brands.

Although not a globally dominating brand like Nestle, Gerber, and Asahi, Little Spoon has emerged as a champion for parents seeking healthier and cleaner food options for their children. This innovative brand stands as a stark contrast to the typical market offerings, which often are laden with preservatives and lack inspiration. This company launched in 2017, offering organic baby foods from farm to front door, and has since become the largest direct-to-consumer (DTC) kid-food brand in the U.S., according to Fast Company.

Born out of a frustration with subpar products, Little Spoon embarked on a journey to revolutionize children’s meals, even though one of the founders, Ben Lewis, did not have children of his own. He and his co-founders spotted the market gap for fresher, healthier options after recognizing that the majority of available baby and kid’s food options for parents were heavily processed, full of unnecessary additives, and devoid of imagination — a far cry from the nutritious, appealing meals that children and babies deserve.

Observing the shift from processed foods to fresh ones and the analogous evolution in the pet food industry, the founders realized the need for less processed baby meals. The trend of millennial pet owners transitioning to parenthood and their preference for fresh, organic food inspired Little Spoon’s first product line, “Baby Blends.” This led to the creation of a new-age baby food brand aimed to meet the needs of modern parents and their children.

The original plan to launch in retail faced delays, encouraging a shift to direct-to-consumer (DTC) sales through an e-commerce site. Despite skepticism from investors, the founders stood by their decision for DTC, due to benefits like better customer understanding and nimbleness. The company also chose to focus on online platforms rather than investing in physical structures in stores, offering them more control over their operations. With a successful subscription model, the brand is constantly recommended over global brands such as Gerber.

When compared to other similar brands such as Once Upon a Farm, “Little Spoon offers a wider range of flavors and textures, including blends with grains and spices, while Once Upon a Farm focuses more on simple fruit and vegetable purees. Depending on your baby’s taste preferences and developmental stage, one brand may be more appealing than the other.” Additionally, Yumi is another popular brand doing well, but it still earns less annual revenue than Little Spoon as of 2023.

More recently, the Little Spoon brand has expanded beyond pureed baby food to various products aimed at making traditional children’s food healthier. The company’s philosophy aligns with modern parents’ values while satisfying children’s preferences, emphasizing the importance of adaptability and understanding customer needs in a dynamic market.

This is evident in some of Little Spoon’s newer products, such as Biteables, which were released in early 2023 and cater to the needs of babies between 9 and 16 months. The brand also came out with a food item for “big kids” called Lunchers, which surprisingly taste good and are healthier than a standard homemade lunch.

The recent introduction of products for 4- to 7-year-olds may “seem like a reaction to kids naturally aging out of the brand’s ecosystem,” but Lewis said it was “always part of the plan,” according to Fast Company. The new line, dubbed “Aging Up,” includes Lunchers and a range of junk-free snacks. The challenge was creating food that appealed to both parents and their picky kids. The result? A fun, interactive meal kit that brings back fond memories of Lunchables, but with a healthy twist.

Little Spoon’s creative innovation didn’t stop there. Its line of snacks includes chickpea Veggie Loops designed to be worn on fingers, with flavors like Mac and Cheesy, Pizzalicious, and Pancake Party. The loops contain hidden veggies like carrots, spinach, and pumpkin. Instead of the standard fruit leather, the brand offers stringy Fruit Rippers, similar to Twizzlers Pull ‘N’ Peel, but retaining the fruit. For dessert, Little Spoon created Dipsters, its answer to Dunkaroos.

The packaging of these lunch kits, designed by SMAKK, is as exciting as the food itself. The playful illustrations and bright colors inspire child-like delight, with certain features providing continuity with the company’s baby food line. Kids’ feedback was instrumental in shaping the product aesthetic. Little Spoon is not shy about showcasing its ’90s inspiration, notably in its marketing campaigns. The brand used an AOL-style retro website for the launch and even got endorsements from ’90s icons. But it’s not just about capitalizing on nostalgia; the products genuinely trigger happy food memories.

Beyond its products, “Little Spoon’s site is conveniently user-friendly as well. You can sort by dietary need — including no gluten, no dairy, no peanuts, no soy, no coconut, no sesame, no meat, no fish and no egg, if so desired — and can see each well-balanced meal before ordering,” according to the New York Post.

The emergence of brands like Little Spoon in the crowded baby food market highlights the potential of embracing market trends, consumer needs, and business model adaptability. Such brands illustrate an essential shift toward healthier options, convenience, and direct-to-consumer models, and their ability to retain customers by diversifying their product lines raises intriguing questions about customer loyalty and lifetime value.

BrainTrust

"As it expands, Little Spoon needs to show it has a pathway to profitability, otherwise it is ultimately on the road to nowhere."
Avatar of Neil Saunders

Neil Saunders

Managing Director, GlobalData


"My kids… were brought up on homemade baby food for all the same reasons that Little Spoons exist. There is certainly a need for offerings in this niche."
Avatar of Gene Detroyer

Gene Detroyer

Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.


"There is a large opportunity here, along with growth opportunities as meals for older kids are created and brought to market."
Avatar of Mark Self

Mark Self

President and CEO, Vector Textiles


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Discussion Questions

How can traditional baby food brands pivot effectively to emphasize healthier options and compete with innovative companies like Little Spoon that prioritize a fresh, organic approach? What lessons can startup companies draw from Little Spoon’s switch to e-commerce, and how can existing businesses benefit from adopting a DTC model? What does Little Spoon’s adaptability in expanding its products for older children reveal about the importance of customer retention in retail, and how might this influence other industries’ approaches to maximizing lifetime customer value?

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5 Comments
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Neil Saunders

There is no doubt that Little Spoon has seen very strong revenue growth, fulled in part by its healthier foods chiming with a growing number of parents. However, success also needs to take into account the bottom line and from the last set of recent numbers I saw, the company was not profitable – a similar problem for a lot of DTC firms. As it expands, Little Spoon needs to show it has a pathway to profitability, otherwise it is ultimately on the road to nowhere.

Gene Detroyer
Reply to  Neil Saunders

Not profitable> That is a bit disconcerting. I imagine they are also cash flow negative. They must have believers in investors.

Neil Saunders
Reply to  Gene Detroyer

I think a lot of DTC firms are in the same boat. Investors are a lot less lenient than they used to be when it comes to profitability. Too many firms during through cash!

Gene Detroyer

My kids, a few years north of 50 years old, were brought up on homemade baby food for all the same reasons that Little Spoons exist. There is certainly a need for offerings in this niche.
The DTC model also makes considerable sense in that the products should be fresher than those going through the retail supply chain. It concerns me that as Little Spoon expands its line and may be forced into retail mode, it will need to add ingredients to last for 90 days or more to meet the dating requirements for the foils of getting the product on retailers’ shelves.

Mark Self
Mark Self

74% of the United States is either overweight or, worse, obese. That fact drives awareness of healthier eating up, and families that can afford organic, healthier baby food tend to be more aware of online alternatives. There is a large opportunity here, along with growth opportunities as meals for older kids are created and brought to market. As for other brands, DTC will only work if you have the product and the market in place that aligns with online shopping.

5 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Neil Saunders

There is no doubt that Little Spoon has seen very strong revenue growth, fulled in part by its healthier foods chiming with a growing number of parents. However, success also needs to take into account the bottom line and from the last set of recent numbers I saw, the company was not profitable – a similar problem for a lot of DTC firms. As it expands, Little Spoon needs to show it has a pathway to profitability, otherwise it is ultimately on the road to nowhere.

Gene Detroyer
Reply to  Neil Saunders

Not profitable> That is a bit disconcerting. I imagine they are also cash flow negative. They must have believers in investors.

Neil Saunders
Reply to  Gene Detroyer

I think a lot of DTC firms are in the same boat. Investors are a lot less lenient than they used to be when it comes to profitability. Too many firms during through cash!

Gene Detroyer

My kids, a few years north of 50 years old, were brought up on homemade baby food for all the same reasons that Little Spoons exist. There is certainly a need for offerings in this niche.
The DTC model also makes considerable sense in that the products should be fresher than those going through the retail supply chain. It concerns me that as Little Spoon expands its line and may be forced into retail mode, it will need to add ingredients to last for 90 days or more to meet the dating requirements for the foils of getting the product on retailers’ shelves.

Mark Self
Mark Self

74% of the United States is either overweight or, worse, obese. That fact drives awareness of healthier eating up, and families that can afford organic, healthier baby food tend to be more aware of online alternatives. There is a large opportunity here, along with growth opportunities as meals for older kids are created and brought to market. As for other brands, DTC will only work if you have the product and the market in place that aligns with online shopping.

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