By Maureen Flanagan
Based in San Leandro, CA, nSpired Natural Foods is a leader in its market, appealing to consumers looking for healthier eating and snack alternatives without compromising taste. The company's top selling brands include Maranatha natural and organic nut butters, Skinny chips, and a tasty line of chocolates and confections. Led by its talented management team, nSpired continues to grow rapidly, doubling sales in the past two years.
In a December 22, 2003 buyout, American Capital Strategies, Ltd. (Nasdaq: ACAS) purchased the company in a $62.5 million transaction. To complete the buyout, American Capital provided a complete financing package consisting of a revolving credit facility, senior loans, subordinated debt, and preferred and common stock.
"nSpired's market leading position affords tremendous growth opportunities as it continues to serve the natural foods market and accelerates its expansion of select items into mainstream grocery channels. The company's products have become staples in the diets of many Americans with special dietary needs and preferences," said Gil Pritchard, nSpired's President and CEO.
As a manufacturer of natural foods, nSpired's products are non-irradiated, minimally processed and free of artificial ingredients. The company sells some 220 different products, more than a third of which carry the USDA "certified organic" label that guarantees they are produced without pesticides, chemicals, hormones, or genetic modifications. All products are Kosher, Feingold Diet approved and none contain transfats. The company's products sell at only a slight premium to regular products - and consumers get a healthier product that tastes just as good.
With a market share of over 40%, Maranatha's nut butters include all-natural and organic peanut, almond, cashew, and tahini nut spreads. Maranatha's products contain only the finest, premium quality nuts and sea salt and are manufactured without added sugar, preservatives, stabilizers, hydrogenated oils or trans fats. Maranatha is also the prime supplier of nut butters utilized in the manufacturing of leading energy bars.
The company's salty snacks include corn, tortilla, and soy chips as well as potato sticks marketed under the Skinny® brand. Skinny Natural Corn Chips are the number two brand in low/no fat corn chips in the natural foods store channel. Skinny products are baked (not fried), all-natural, oat-free, Kosher, cholesterol-free, low fat and contain no MSG. nSpired developed and exclusively supplies a line of Crunchers (Soy) Chips to Atkins Nutritionals, which serves millions of consumers who have adopted the controlled carbohydrate lifestyle. The company's Skinny products are featured as a salty snack of choice in Weight Watchers' publications.
nSpired's candy and confections category includes packaged chocolate and bulk confections marketed under the Tropical Source®, Cloud Nine® and Sunspire® brands. Tropical Source, a vegan, gluten-free chocolate, is the chocolate brand preferred by lactose intolerant consumers, celiacs, and others with dietary restrictions. Cloud Nine is the company's brand of all-natural gourmet chocolate bars, and Sunspire is its line of bulk natural and organic confections. With a 70% share in the natural food channel, Sunspire has been an innovator with unique products for diabetics, the environmentally and socially concerned and for other consumers with special dietary needs or preferences.
The company also sells the Loriva® line of culinary oils in addition to specialty snacks such as trail mix, dried fruit, and pumpkin seeds.
nSpired's products are sold to some 2,500 natural/specialty retailers and 3,000 mainstream grocers through leading market distributors. The company has almost 50 federally registered trademarks and numerous common-law trademarks covering its products.
"As Americans turn to natural and organic foods in ever increasing numbers, the company's products are more popular than ever," said Ian Larkin, American Capital Principal. "With the addition of nSpired to our portfolio, American Capital continues its commitment to the natural and organic foods sector."
American Capital's portfolio includes natural meat processor BC Natural Foods, LLC, formerly Petaluma Holdings, LCC. Its current portfolio includes more than 85 companies in a wide range of industries. For more information about American Capital's portfolio click here. Since 1997, American Capital has invested more than $2.2 billion in the middle-market.
The $605 million natural and organic category has evolved from a limited niche market to one of the fastest growing segments in the retail industry. This category far outpaces the 1% growth in traditional grocery sales and is expected to increase at a 14% rate to $790 million in 2005. The market is driven by consumers - more than 20% of the U.S. population - with dietary restrictions mandated by such concerns as weight management, heart disease, lactose intolerance, and food allergies. In addition, three-quarters of American consumers purchase organic products because they want foods that are free of pesticides and chemicals. Rapid growth is expected to be augmented by the recent FDA disclosure of the harmful effects of trans fats. The popularity of diets such as the low-carb Atkins diet, and the entrance into the market by large companies like Frito Lay - which will likely raise category awareness - also are expected to benefit nSpired's position.
The mainstream market affords a compelling opportunity for expansion. Large retailers, such as Kroger, Safeway and Costco, have now begun to sell the company's products. Maranatha's natural and organic peanut butters have the opportunity for broader distribution. Given their strong position in the specialty channels, these products are targeted to become market leaders in the traditional channel.
Tropical Source is another significant opportunity for nSpired as mainstream candy and chocolate manufacturers have not yet addressed the market of individuals with dietary restrictions, such as lactose and gluten intolerance.
The company continues to introduce new initiatives including new products, fresh packaging and labeling, additional flavors and product enhancements.
With its top-selling products, opportunities for expansion - and appeal to a wide range of consumers selective about the food they eat - nSpired is a natural winner.
