For the past several weeks, we’ve been checking in with some local entrepreneurs that are making a name for themselves outside the state of Arkansas with their unique brands, products, and services.
Of all of the businesses we’ve talked to so far, none has more elements of the perfect American start up story than Fayetteville-based organic baby food company, Oh Baby Foods.
The company, founded by local mom Fran Free, was established because a passionate person didn’t find what she wanted in the current marketplace.
She sold her house, simplified her life, and moved in with friends to finance the company. She worked three jobs to keep her dream alive and the business afloat. She made a few mistakes.
She didn’t take no for an answer.
And now, after several years of struggle, and a lot of hard work as a one-woman show, the company has grown to include distribution at hundreds of stores in 45 states across the country.
And this might just be the beginning.
Oh Baby Foods started in 2009 when Free was in grad school.
Growing up on a family farm in south Arkansas, Free had agriculture in her blood. She also studied environmental science and agricultural economics at the University of Arkansas, and was considering opening a bed and breakfast/brewery/salsa company on her grandparent’s historic plantation when something happened that completely changed her career trajectory. She became pregnant.
As a curious mom-to-be, Free began exploring all aspects of raising a child, which, with her background in food and agriculture, naturally led her to an interest in infant nutrition.
“I started looking at baby food, thinking ‘What is out there for my unborn child?’” she said.
Free said she knew she wanted organic food for her baby, she wanted it to be grown in the United States, and she wanted it to taste good. For the most part, however, she didn’t find what she was looking for.
“There were a couple of small brands that were organic, but none of them used all U.S.-grown produce,” she said.
Free realized she had identified a potential opportunity in the marketplace, and she decided to make an entrepreneurial leap.
She sold her home, cashed out the equity, and used her nest egg to start Oh Baby Foods.
Learning the ropes
It didn’t take long for Free to develop recipes that she and her little one enjoyed, and retailers were initially receptive to the idea of American-grown, organic baby foods. But profitability for the company, at first, did not come as easily.
“When I started, I envisioned myself growing old in this small little, cute kitchen, making baby food every day, hanging up my apron, and then I’d go home,” she said. “I did that for about two years, but I realized I was never going to break even. I was spending $96 for a case of product I could sell for $46.”
Free realized that she needed to scale the business, find efficiencies, and start producing her product at larger quantities to decrease her costs to survive.
“I knew we had to find a contract manufacturer that had the equipment, and that believed in us,” she said.
Free was turned down by the manufacturer she wanted for Oh Baby, but she didn’t take no for an answer.
“They said, ‘You’re too little, we’re not taking on anybody else, we can’t do it,’” she said.
After a bit of back and forth, Free convinced the company to allow her to just “come by and say hi.” She immediately booked a flight to their Oregon offices, and a few days later, had secured an agreement to begin producing Oh Baby Foods on a much larger scale.
Once manufacturing was in place, Free was able to focus on growing the network of retailers that carried her products.
She was also able to secure a contract with national health food chain Whole Foods, one that included a simple, low-interest loan to help finance further expansion through the company’s Local Producer Loan Program.
The financing also comes with access to Whole Foods’ network of nationwide buyers, mentorship help, and promotions inside several stores.
That relationship continues to grow.
Last month, Oh Baby Foods was cleared by Whole Foods to become a national brand, opening up additional markets not previously available to the company including key, high-volume areas in Colorado, Utah, New Mexico, and others. Oh Baby is only the eighth local producer to qualify for national brand status, Free said.
By this August, Oh Baby will be available in over 250 Whole Foods stores in the U.S., bringing the total number of stores carrying Oh Baby products to 600.
Sales have spiked as well. Free said the company now sells about 4,300 units per week, up from 400 units per week in September 2013.
“We are really seeing a lot of repeat customers once they learn about our brand,” she said.
Oh Baby is also exploring some opportunities with a private label brand, which would allow their products to be offered in even more retailers around the country.
All of this, Free said, is helping the company achieve its main objective.
“Our ultimate goal is to put more healthy food in the mouths of more babies,” she said. “Anything that can help get us to that goal is something we are going to evaluate.”
The company’s recent success has allowed Free to finally begin passing some of her responsibilities on to a growing staff of employees.
The company recently hired a full-time analyst and an office manager, and two part-time staff that prompted a move into a larger office space inside the Three Sisters Building on Dickson Street last month.
Oh Baby also plans to hire a full-time CEO in the fall, and is on track to hire for about 17 new positions in the next three years.
Being able to delegate some of her responsibilities has allowed Free to focus more on the higher-level aspects of the company including research and development, working with her board of directors, and overseeing fundraising efforts.
Not being a “one-woman show” has also allowed more time for what Free values most – and what inspired Oh Baby Foods in the first place – her family.
“I want to have some free time to be a Mom,” she said. “That’s always been extremely important to me.”