23 Jan Digital insight is the new pepper: why we invested in Just Spices
At Five Seasons Ventures, we are proud to welcome Just Spices into our portfolio.
Just Spices is a Digital Native Vertical Brand (DNVB) providing consumers with global flavours, convenience and a digitally-enabled experience.
It may not come as a surprise that the share of meals consumed at home has increased in the last years to reach 82%. And while 93% of millennials spend at least four nights a week dining in, it is not just take-aways and frozen meals. Cooking TV shows are increasing in popularity, online food communities continue growing rapidly (#food counts more than 360 million posts on Instagram) as people rediscover the joy of cooking at home.
However, we are all facing a common problem: it is hard to cook like a chef. Adding the right blend and amount of spices to a basic meat-and-two-veg, can light up the dish and bring joy to those who eat, and satisfaction to those who cook.
That’s not how it looked on recipe book, eh? ;(
Spices and condiments account for less than 5% of the € value of an average home-cooked dish, yet some estimates indicate that up to 50% of the sensory experience of a home-cooked meal is due to spices and condiments. The category of Spices and Flavours to help home-cooking is worth €54 billion worldwide and dominated by large food corporate brands like Maggi, Knorr and McCormick. The category has seen limited innovation in Europe and North America in the past decades. It is also a high margin category, easily transportable, with a clear consumer engagement model (recipes and food pictures work beautifully on social media) and hence, possibly open to be re-invented.
So, why did we invest in Just Spices?
The answer follows the 4-T model that we started to adopt as a reference model of our investment decisions: Team, Tribe, Tech and Traction.
TEAM: fun and ambitious founders
Florian, Ole and Bela met at University and launched Just Spices in 2014. We were impressed by the bond across them and their ambition. In the first year, they embarked on a journey across continents to discover exotic and ethnic spices, which continue to inspire the products, packaging and storytelling around Just Spices’ range. For their first large order, they bought a pallet of a spice mills, emptied the grinders, changed the labels in Florian’s mother’s garage and fulfilled their first order next morning. Together they hacked their way through the harder start up times, managed to raise early capital, build a strong and recognisable brand, built a 75-strong team with a great culture that lives the values and vision of the brand and developed products that people like. They also had the bold vision that spices and cooking aids could be sold direct-to-consumer. They are also fun, very smart and ambitious.
TRIBE: the most social spice brand in DACH
With more than 247,000 followers on Instagram, Just Spices has a huge online food community in Germany. They have been using social media since the very beginning and they are masters at it. The community is an integral part of the company’s marketing strategy and its best ambassador. Its members are passionate about food and cooking and post hundreds of #JustSpices post a day, sharing (and showing off) their cooking skills.
The community is also a unique source of digital insights that helps the marketing and New Product Development team at Just Spices identify new trends, develop new flavours and test new product, very quickly. Just Spices launched the Avocado Topping Mix, after measuring an increment of avocado on toast pictures, posts and articles from various digital channels. Leveraging market research and online surveys, Just Spices is able to get representative answers on food trends and product requests out of their community, within 24 hours. Those insights are used in their agile new product development cycle.
Just Spices v1.0 (2014)
TECH: online-first and data-driven
Who would have thought that you can sell spice mixes, and a lot of them, online? Not us a few months ago. But Just Spices proved it is possible to generate more than 60% of revenues direct-to-consumer through JustSpices.de. We believe that direct access to consumers is one of the most valuable assets in the food industry today. Just Spices turns data into consumer insights, which lead to the rapid development of new spice blends and new product ranges, all of which are natural, and free of chemical additives.
In addition, they are executing a successful multi-channel strategy. They are now in 5,000+ POS in Germany and using data from the online community to inform the offline product launch strategy and local consumer activation.
TRACTION..and favourable unit economics
Since inception, Just Spices has generated an impressive growth, with a growing base of loyal customers. The organisation is now ready to scale further. This growth comes with favourable economics given their efficient logistics and transportation and gross margin profile.
We are excited about the next phase of growth of Just Spices, the expansion of the current range online and offline, new product launches and expansion into new markets.