Square Foods is an organic fresh baby food company utilizing the direct-to-consumer subscription model with direct shipping to customers' doorsteps. Following leading research, the meals are based on nutrition science and offer 100% daily nutrition and an allergen introduction menu. Originally, the Company was named, Lil’ Squares, LLC. In January 2018, the Company changed its name to Square Foods, LLC dba Square Baby and officially began operations.
Square Baby is a good product. It is a Science-Based Brand following AAP Recommendations (Allergen Introduction + Balanced, 100% Nutrition). It aims to disrupt the sugar-heavy baby food industry. Furthermore, the company also uses 100% recyclable and compostable packaging. The company has products in different flavors. The potential pipeline includes square bites, square smoothies, and square meals.
Today, organic and fresh options are leading the growth of the $150B (estimated by 2032) baby food market. The competitors include Happy Baby, Once Upon A Farm, Serenity Kids, Yumi, Cerebelly, and Little Spoon. The company has differentiated itself in a fragmented market by providing a very low sugar (1g against 10g) option and has focused on using organic and fresh raw materials while helping prevent food allergies in infants. The products are highly nutritious, packaging protein sourced from yogurt, plants, and animals.
The products are approved by the FDA, USDA, and other appropriate associations. They have been tested by a third party for heavy metals. It has a Clean Label certification. The company has proven relationships with its suppliers, organic farms, co-manufacturers, logistics, and fulfillment partners. It has a 75% Product Margin (50% including shipping) with national DTC distribution.
The business has proven traction with a 5:1 LTV to CAC ratio. It has a subscription model with 79% retention and 59% of customers spend an average of $1,000. LTV per baby is $560 and for those ordering 2+ boxes, LTV is $800. The company stopped production in Q2 2021 since it was handed over to a co-manufacturer. Due to COVID, the production could not be resumed till Q1 2023. Therefore, the company had no revenues in 2022. In 2023, over the last 3 months, the revenues have averaged $10,745/month, the cost of goods sold has averaged $5,000/month, and operational expenses have averaged $55,000/month, for an average burn rate of $49,255. The annual sales for 2021 stood at $106,819 and the gross profit was 50%. The company intends to be profitable in 36 months.
