Fody Foods Raises $6.6M to “Bring Comfort Back to Comfort Foods”

Using his past experience building a brand catering to special diets, Fody Foods founder and CEO Steven Singer has set his sights on promoting gut health and making comfort foods accessible to consumers suffering with digestive distress. To reach this goal, the Montreal-based gut-friendly food brand has raised C$8.5 million (approximately $6.6 million USD), it announced today, to support expanded distribution and new marketing initiatives for its low FODMAP product line of sauces, dips and snacks.

The round was led by investors District Ventures Capital and Export Development Canada (EDC), as well as previous investors New Acres Capital Ag & Food and Jonathan Ross Goodman. The brand received investment from EDC, who also recently invested in fellow Canadian brands Love Good Fats and Mother Raw, through its recently introduced Matching Program which matches investment dollars from venture capital and private equity investors for brands exporting products from Canada.

Singer previously founded gluten-free brand Glutino, before working for Claridge Natural Foods, the company’s investor, and then Boulder Brands, which acquired Glutino in 2011.

Now Singer believes he’s found the next dietary trend in search of product offerings. Founded in 2016, Fody produces sauces, condiments, dressings salsas and snack bars catered to consumers suffering from food intolerances, IBS and other digestive discomforts. Across the brand’s portfolio, all offerings are consistent with a low FODMAP diet, free of ingredients that have been found to trigger digestive distress, such as onions, garlic, honey, lactose and gluten.

According to Singer, the brand had been working on a raise for nearly a year, though discussions with potential investors were halted amid the pandemic as investors placed their focus on their existing portfolio companies. Investor interest “resurfaced” this summer, Singer said, with the credibility of his previous experience growing and selling Glutino helping to “secure” investors like District Ventures Capital.

“We love innovative products in the food space – especially ones that not only taste great but enhance a consumer’s diet through a natural ingredient base,” said Arlene Dickinson, General Partner of District Ventures Capital. “Fody, a B Corp certified company, is led by an experienced entrepreneur, focused on providing clean, gut-healthy foods to aid the millions of people suffering from digestive issues.”

The brand will use the funding to expand its distribution, as it deepens its offering at current retailers and launches into additional doors. Fody products are currently sold in approximately 7,000 retailers in the U.S. including Kroger, Whole Foods, Wegmans Publix, Safeway and Albertsons, as well as retailers in Canada, the U.K. and Australia. Its pasta sauce recently launched in Kroger, and the brand will be launching its ketchup and barbecue sauces in Whole Foods Market and a new salsa verde at Sprouts early next year.

The brand has a two-pronged strategy for distribution and marketing. Newer or more niche products, such as its bars, are sold online via Amazon, Fody’s own website and other ecommerce providers. Meanwhile, its “hero SKUs” of family-focused pantry items such as pasta sauce, barbecue sauce and salsa, which can also cater to consumers simply looking for better-for-you options, are sold in brick and mortar stores.

“It would be cost prohibitive and I just don’t think it’s the right strategy right now to just flood the market with more and more items,” Singer said. “So we’re kind of trying to build the items that we have that are key to distribution.”

Some of the capital will be used for new marketing programs with retailers as well in an effort to amplify its marketing message. Despite the fact that about 10 to 15 percent of the adult population in the U.S. suffers from symptoms of IBS, according to the American College of Gastroenterology, Singer said the awareness around digestive issues like IBS is far less than the more uncommon gluten intolerance. Because of this, the brand will focus on educating consumers through partnerships with dieticians as well as calling out its gut-friendly attributes on its packaging.

In order to increase consumer awareness and drive sales, Singer said he’ll invoke a “pretty similar playbook” to the strategy he used building Glutino, both driving consumer awareness about the brand as well as the products’ use cases.

“We’re building a brand, but we’re not just a snack brand or a chip or a cracker or a beer brand where everybody already knows what the product is,” Singer said. “We have to kind of do what we did in my last life at Glutino where you’re kind of somewhat educating people on the diet at the same time of building a brand.”

Singer said that Fody has benefitted from probiotics’ rise in popularity, especially with products such as kombucha and yogurt, as this trend has played a hand in driving consumers “looking for anything to make their gut feel better” to buy Fody products even if they aren’t following a low FODMAP diet.

“One clear point that no one could dispute is just how big gut health is, and how big the market is,” Singer said. “Having a household brand that caters to people all over the world and gives them comfort foods, where right now those comfort foods are causing them discomfort, we’re able to bring the comfort back to comfort foods.”