If you have any questions about Pollen + Grace, their founders are doing a Q&A in our community on Monday 25th Pollen + Grace Q & A 💬.
While stocks and other market assets are our big 
, we love all investing. And we know that a lot of Freetraders are interested in crowdfunding too.
Unfortunately, in contrast to the huge amount of info on public companies, there’s a real gap for independent info and content on most crowdfunding companies, even when they’re live and raising.
So going forward, we’re going to be writing up some reports on crowdfunded companies to share here in the community.
This week, we’ve taken a look at to-go vegan and health food brand, Pollen + Grace. They’re currently live on Seedrs:
- Raise size £350,000
- Equity 5.96%
- Valuation £5,519,030 pre-money
Who are they?
Launched by from a home kitchen by Stephanie Johnson and Kristina Komlosiova in 2015, Pollen + Grace are a healthy food brand, offering vegan and free-from retail meals.
Their background? After Stephanie discovered she had a number of intolerances (gluten, dairy), she set out to build a healthy, delicious brand she could enjoy.
What do they do?
They make free-from, grab-and-go food sold via retailers.
Grab-and-go food: AKA to-go, meals you can grab and eat without cooking
Free-from: doesn’t contain an unwanted ingredient type like dairy, animal products or gluten
For P+G, that means everything is dairy-free and gluten-free. Except for two products (a grilled chicken salad box and a banana bread with eggs), everything from P+G is vegan too.
Expect lots of turmeric, chia and pumpkin seeds, coconut yogurts etc.
Their products include:
- Breakfast pots: fruit and grain porridge pots with coconut yogurt
- Lunch boxes: salads, rice/noodle boxes full of on-trend ingredients
- Hot pots: single-serve soups, curries, dals to reheat in the microwave
- Sweet treats: sweet grain-based bars and fudges
The boxes retail at around £6.50 (less on promotion) and hot pots go for £3.99. Pricey for supermarket products.
Among other retailers, they’re currently stocked in:
- WHSmiths
- Whole Foods
- Planet Organic
- And available online via Ocado
What will they do with the money?
- More marketing, including product demos and in-store sampling
- R&D and product development, including eco-friendly packaging
- Expansion outside London
They’re also planning to outsource some production, which will shave gross margins, but also allow them to scale more easily.
Analysis
Note that this is not investment advice and only my personal insight on the business. You should make your own investment decisions.
The proposition
The to-go sector is certainly expanding fast. One source projects growth from £17.4B in 2017 to a whopping £23.5B in 2022. This makes sense as people have more pressure and less time for lunch.
Plus people are increasingly after vegan and free-from options, either for ethical, health, environmental or lifestyle reasons The number of vegans in the UK is growing, although figures vary from a plausible 500k to a slightly unbelievable 3.5M. More importantly, part-vegan diets are becoming more mainstream too.
These insights are in their deck and they’re hard to dispute. The market is there and it’s growing.
Intriguing? Potentially.
But that isn’t the whole story.
Competition
It looks like there’s still plenty of growth for the vegan and grab-and-go market but all that potential has drawn a lot of competition, from other startups to major companies. It’s not necessarily saturated, but it is crowded.
Trading from 2015, Pollen + Grace are tapping into a big trend here but they aren’t driving or owning it.
Fundamentally, despite being sold from retailers, their price point brings them into competition with all grab-and-go options. They’re effectively a super-premium lunch, but sold from retail.
Pret is the dominant force in grab-and-go and the speed and responsiveness of their product development is impressive. Pret already has a big presence in vegetarian and vegan choices.
Other cafe chains like Itsu, Wasabi, Pure and EAT are also focusing on this space. Even Leon could be considered competition. At their current price point, P+G boxes will be far more expensive than most meals on supermarket shelves, so as a purchase they’re competing with dedicated cafe outlets.
Of course, outside London and other cities, many of those chains drop off in number, whereas distribution for P + G will be pretty much the same.
Looking at the supermarket themselves, there are competing brands on the shelves like Deliciously Ella and Munch Fit. Not all of these do all of what Pollen + Grace are doing but they compete in some areas.
Supermarkets are launching their own lines too, including Marks and Spencer, Asda and Tesco’s Wicked Kitchen. They can do this at a significantly lower price point.
Slick, if generic, branding
With subtle, elegant packaging and vivid ingredients, the brand looks premium. It’s built for Instagram and in fact they sport an impressive 20k followers.
The team are clearly trend-conscious and feature the right ingredients, techniques and buzzwords for the audience.
However, while the brand ticks the right boxes, it lacks some distinctiveness. There’s no apparent radical point of difference from other free-from brands. The ‘noun + noun’ name alone feels incredibly familiar (Hemsley + Hemsley etc).
When asked about their business vs the competition on a blog in 2017, this was the response:
That may be a credible point of difference but it doesn’t seem too clear-cut vs other brands on the market.
Their story - a founder with intolerance creating the food they’d want to eat - is authentic but again, not too distinctive!
What’s the potential exit opp?
The company seems to be looking for a relatively fast sale through an acquisition rather than IPO. This makes sense for the sector. They argue that, based on current sector trends, an exit could happen on multiples of revenue rather than profits. They state the multiples and potential figures in their pitch deck, so if you’re interested, go check them out!
They also compare themselves to Tyrells and Krave Jerky, which both saw exits on similar multiples of revenue. However, the scalability challenges for a fresh food brand like P + G will be different to a longer life product
The final word
Pollen + Grace are operating in a growing market with pretty solid products, a strong following and a well-executed brand. Are they unique and compelling enough in a hugely competitive market? That remains a question.
There are potentially bigger and more distinctive propositions in the theme.
This is not investment advice and Freetrade does not facilitate crowdfunding investments - if you’re interested in crowdfunding, you should make your own investing decisions after reviewing all available materials on the crowdfunding site, as well as the site’s own information on the risks, and considering your personal circumstances, or seek independent advice.
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