Should You Care About Else Nutrition?

Else Nutrition Holdings Inc. (BABY.T) announced on February 22, 2022, that it has concluded a successful preclinical study on its Plant-Based Infant Formula. This marks a crucial first step towards bringing the Company’s formulation to market. However, there’s more to this press release than you’d think, so stick around.

“This is a massive step forward for the Company…Since its inception, our vision has been to fill this major gap in the market and to bring a clean label whole-food, plant-based, soy-free infant formula to millions of families worldwide. These results mark further validation of our formulation, as we continue to push ahead in seeking FDA approval,” said Hamutal Yitzhak, CEO & Co-Founder of Else Nutrition.

Having now completed its preclinical study, Else Nutrition is in a better position to approach and demonstrate the safety and nutrient bioavailability of its infant formula with the U.S. Food and Drug Administration (FDA), as well as with other regulatory authorities. What about results?

According to Else Nutrition, study results demonstrated proper growth similar to dairy-based infant formula. However, full details of this study were not included in Else Nutrition’s press release. That being said, the Company intends to present results at an international scientific conference on pediatric nutrition and growth in March 2022.

“I Am Not a Soy Boy!”

Else Nutrition boasts an extensive portfolio of plant-based products including its Plant-Based Complete Nutrition for Toddlers, Plant-Powered Complete Nutrition Shake, Plant-Powered Shake Mix for Kids, and soon its Plant-Based Infant Formula.

In addition to being plant-based, all of Else Nutrition’s products are dairy-free, soy-free, gluten-free, and contain no palm oil, corn syrup, or GMOs. In particular, the Company’s Plant-Based Complete Nutrition for Toddlers stands above the rest in the Toddler Formula Market.

Compared to Gerber Good Start Infant and Toddler Formula, which is arguably the Company’s largest competitor, Else Nutrition’s products are soy-free. Keep in mind, according to the National Institute of Environmental Health Sciences (NIEHS), infants are more likely than adults to be vulnerable to the estrogen-like effects of isoflavones in soy.

I thought I almost failed Science in high school. After stumbling across my grades, turns out I actually did fail Science. So, instead of listening to me, I am going to let Oregon State University explain what isoflavones are. Put simply, isoflavones are a class of phytoestrogen, a plant-derived compound with estrogenic activity. In other words, phytoestrogen can increase the levels of estrogen in the body.

With this in mind, soybeans and soy products are the richest sources of isoflavones in the human diet. In animal studies, the health effects of possible concern include early onset of puberty in females and alterations in the development of breast tissue as a result of increased estrogen levels.

As for human studies, when comparing infants that were fed soy formula versus infants that were fed cow-milk formula, NIEHS scientists found that girls who consumed soy-based formula displayed larger wombs and vaginal cell changes. An additional study conducted by the NIEHS suggests that infant girls fed soy formula are more likely to develop severe menstrual pain as young adults.

Unlike toddlers and adults, an infant’s diet consists primarily of milk and formula. That being said, infants on a soy-based formula diet are disproportionately more exposed to the effects of phytoestrogen. Keep in mind, infants also go through developmental stages that are sensitive to estrogen.

Bottom Line

I don’t like soy, clearly. However, I cannot definitively say whether soy is good or bad. After all, some studies show that a lifelong diet rich in soy foods may actually reduce the risk of breast cancer in women. Still, why would I pick something as controversial as soy?

Unfortunately, it doesn’t stop at soy. In 2019, a U.S. Subcommittee on Economic and Consumer Policy requested data from seven companies, including Walmart, Gerber, Beech-Nit, Nurture, Hain Celestial, Sprout Foods, and Campell Soup Co. Of these companies, only Gerber, Beech-Nut, Hain Celestial, and Nurture shared documents.

Regarding Gerber, documents demonstrated that two of Gerber’s infant rice cereal products contained inorganic arsenic levels in excess of the FDA’s limit and also failed to recall said products. However, this investigation was conducted in 2019. Gerber now claims that its baby food products are “absolutely safe” and comply with all FDA requirements.

Despite the controversies surrounding many popular baby food brands, Else Nutrition appears to be as clean as the products it sells. Else Nutrition’s latest news demonstrates how important safety and nutrient bioavailability are for the Company, however, an independent pilot survey conducted in 2021 is a testament to this.

The study conducted by GetWizer, an independent third-party global market research firm, found that over three-quarters of parents whose children suffered from gastrointestinal (GI) problems such as vomiting, reflux, and spit ups whilst using another formula or supplement, reported improved symptoms after using Else Nutrition’s Plant-Based Complete Nutrition for Toddlers.

Study Efficacy:

• poor weight gain and growth problems were resolved in over 82% of cases
• GI-related symptoms improved in over 85% of cases, and approximately half reported up to 100% improvement
• bowel movements were improved in over 79% of cases and almost 100% reported change in stool consistency from abnormal to normal
• rash symptoms were improved in 86% of cases, with severity measured by frequency and length of symptoms

Looking Forward

Furthermore, according to Else Nutrition’s Corporate Update on September 23, 2021, the Company plans to launch a liquid Ready-to-Drink (RTD) version of its Plant-Based Complete Nutrition for Toddlers & Kids. Else Nutrition’s Corporate Update came shortly after the Company announced the completion of a successful commercial trial manufacturing run for its RTD drinks on August 4, 2021.

“This key milestone sets the Company on a path to penetrate the lucrative liquid format in both the Toddler and Kids Nutrition space…With thousands of families nationwide already using Else products in powder format, being able to offer Clean Label, whole-food-based Else products in convenient RTD form, opens up a further 92% of the Kids nutritional drinks market, a $1 billion category in the U.S. alone,” said Hamutal Yitzhak.

Upon receipt of FDA approval, this will enable Else Nutrition to drive growth in the Kids & Toddler RTD markets across several geographies. Additionally, this would enable the Company to offer its liquid-based products in hospital channels, which are paramount to the informative decision-making process for parents when choosing a formula for their child.

To date, Else Nutrition has secured listings for its products on major e-commerce platforms including Kroger.com and Walmart.com. Most recently, on February 2, 2022, the Company also announced the launch of its four new Kids Nutrition Shake Products at retailers serviced by KeHE Distributors. This is expected to create a potential distribution pathway to nearly 30,000 retail outlets.

“This is a very encouraging development with one of our key distribution partners…Complementing our Toddler Nutrition Product with our Kids lineup, gives us a strong boost in shelf presence, and significantly widens our audience, in service of our mission to bring sustainable, Clean Label, Whole Plant-Based Nutrition to wanting families,” commented Hamutal Yitzhak.

In conclusion, Else Nutrition has a solid portfolio of award-winning, certified, plant-based products. Moreover, the Company’s portfolio is in a pivotal stage of expansion with the potential launch of two new plant-based products, including RTD drinks and infant formula, on the horizon.

The RTD Formula Market was valued at USD$1.06 billion in 2020 and is expected to reach USD$1.127 billion by the end of 2027, expanding at a Compound Annual Growth Rate (CAGR) of 0.8%. As a whole, the Global Infant Formula Market was estimated at USD$57.12 billion in 2019 and is expected to reach USD$110.26 billion by 2026, growing at a CAGR of 9.8%.

With this in mind, both markets are comprised primarily of dairy-based products, representing a lucrative opportunity for Else Nutrition to capitalize on. Furthermore, among the vegan options available, Else Nutrition’s plant-based products are nutritionally comparable to dairy-based products without the use of soy and fillers. If you would like to know more about Else Nutrition, check out this article! Also, if you’d like to see more like this, check out my Substack here!

Else Nutrition’s shares opened at $1.20 today, up from a previous close of $1.15. The Company’s shares were up 1.74% and were trading at $1.17 as of 12:45 PM EST.

Full Disclosure: I do not own any stock in Else Nutrition Holdings Inc. (BABY.T), but I do have an interest in the Company.