SmartSweets, a Canadian startup that makes candy gummy bears with only three grams of sugar per bag, has raised $3 million in funding from angel investors that include Consumer Private Equity Investors founder Scott Elaine; CEO of Daiya Foods, Terry Tierney; and former chairman of Daiya Foods, Eric Patel.
Founded in Vancouver in 2015 by Tara Bosch, SmartSweets is the name behind all natural, low-sugar candy that Project Nosh states is for “a new generation of candy lovers” with no sugar alcohols or artificial sweeteners. SmartSweets was bootstrapped from the group up. Bosch states that the company was launched with $15,000 in personal savings after she noticed the poor relationship she personally had with food, and the negative effects that sugar had on human health. After buying a gummy bear mold on Amazon and googling “how to make candy”, SmartSweets was born.
“When I started SmartSweets I was really honest with myself that I understood that I really knew nothing about what I was doing, but I had the conviction in my heart that I knew I was going to figure it out,” Bosch told Project Nosh.
From such humble beginnings, SmartSweets’ products are now available in 2,000 stores across Canada, and with the backing of this latest funding from individuals who Bosch says are already her mentors, the brand is launching in Whole Foods Markets with entry into the U.S. market.
So Long Sugar
Driven by the trend toward a more healthy lifestyle and diet, consumers have recently targeted sugar as the next ingredient to reduce or eliminate from their food choices. A poll conducted on January 15, 2016 by Reuters/Ipsos found that 58 percent of adults surveyed responded that they attempted to reduce the sugar content in their diet within the past 30 days – reflecting a higher percentage compared to the percent of consumers trying to reduce calories, or fat, salt, cholesterol, or carbohydrates.
The drive to cut sugar also has extended beyond the consumer into the regulatory sphere – demonstrating that the reduction of sugar is being addressed as more than a consumer fad, but rather as a health issue that needs to be addressed for the long-term.
In January 2016 the U.S. government advised that Americans should limit the amount of added sugar in their diet to less than 10 percent of their total caloric intake – marking the first recommendation of a direct limitation by the government. And by July 2018, all food companies will be required to note amounts of added sugars on their labels.
Investors Onboard
These trends are pointing toward the nascent investment opportunity in sugar reduction technologies, and low-sugar foods resulting in the announcement of larger and follow-on funding rounds.
In September of last year, GAI News reported on two investment rounds targeting sugar-reduction technologies.
Colorado-based food tech startup MycoTechnology raised a $35 million Series B, co-led by S2G, Bunge Ventures, and Emerson Collective. Other investors included in the round were Health for Life Capital; Seventure Partners; Middleland Capital; Tao Capital Partners; Kellogg’s venture fund, Eighteen94 Capital; Continental Grain; GreatPoint Ventures; Closed Loop Capital; and Windy City LLC.
Founded in 2013 by Dr. Brooks Kelly, Jim Langan, Peter Lubar, and Alan Hahn, MycoTechnology has pioneered the development of a variety of new food processing systems using mushroom roots (mycelium), including the critical application of removing the bitter aftertaste of stevia – something that has been a challenge to food companies in their quest to cut sugar content.
Only weeks later, Israel-based DouxMatok, a developer of flavor delivery technologies, announced the successful raising of $8.1 million led by Israel’s largest venture capital fund, Pitango, and including existing shareholders, Gil Horsky, and FoodLab Capital.
Through a laboratory process that requires no artificial chemicals and is fully compliant with FDA and EU regulations, DuoxMatok can modify how sugar molecules interact with taste receptors on the tongue.
DouxMatok’s technology coats each sugar molecule onto organic ‘carriers’ using a natural mineral that transports each sugar molecule to a person’s taste receptors, significantly reducing the amount of sugar needed to gain the same taste profile. Through maximizing the efficiency of tasting sugar, DouxMatok’s technology allows consumers to perceive more sweetness for a longer period of time, thereby reducing sugar content in foods by up to 40 percent without affecting their taste.
As for SmartSweets, the company has multiple new candies in its pipeline for release this year, and plans to eventually have a portfolio of low-sugar equivalents for every traditional candy on the market today.
-Lynda Kiernan