Free reflects on Oh Baby sale, Blackhive ready to expand product offerings, distribution

When Fran Free started Oh Baby Foods in 2009 with $50,000 of her own money, she saw herself in an apron making baby food in her kitchen well into retirement. And despite the fact that her natural baby food passion soared to $1 million in sales last year, she’s no longer at the helm making the day-to-day decisions.

Free recently sold the business to Fayetteville-based Blackhive for an undisclosed amount. Free has stepped back into a consultant role where she still works 15 hours a week in product development, the aspect she most loved about the baby food business.

After a successful run in 2014, expanding staff and developing a private label baby food for Kroger, Free said in 2015 she found herself needing more capital to grow the business. A local investor group led by Ramsay Ball worked with Free in hopes of providing the funding needed. Because Free also hoped to step back as CEO, the local group chose a CEO replacement.

“It took me about 14 months to get to the point where I was ready to sell the business. I worked really hard growing this business for seven years and I had been working without a salary much of that time. I signed on with the local investor group and spent several months training the new CEO but then funding fell apart and I was back to square one,” Free told Talk Business & Politics.

Free said while sales were great in national distribution when Whole Foods and Kroger bought the private label formulation from her with continued royalties, but still more capital was needed if she was to launch a new product line. Free said she found herself raising a business at the expense of time with her children, now 7.5 and 3.5 years old and the main reason she began the baby food venture.

“It’s come full circle for me. My baby girl was my inspiration for this business and she’s 7.5 years old now. As the business grew the stakes got so much higher and I wasn’t there for my family,” Free said.

As it turned out Ball and the local investor group had reached out to Blackhive, a startup that sources commodity products for food companies, to be a part of their investment group. Free said she and Ryan Efurd, CEO of Blackhive, struck up a conversation and Blackhive made an offer to purchase 100% of the Oh Baby venture.

“We met with Fran and the global sourcing team at Whole Foods and did a fair amount of due diligence, but when you think about incubating a loved brand like Oh Baby into our company where my team can do the sourcing and distribution and our marketing arm Blkbox Labs can continue building the brand and Fran can create new products it seemed like a great fit,” Efurd said.

Free also saw the deal as win-win for her beloved startup. From there she said the deal was smooth as Blackhive bought 100% of Oh Baby and retained Fran as a consultant with royalties.

“One of the biggest challenges I faced year-after-year was sourcing the organic ingredients and that’s at the core of what Blackhive does – buying and selling ingredients. It’s a nice fit,” Free said.

Efurd said he’s excited to expand the footprint of Oh Baby foods and work with Free on more products. The company has six items for sale, and all baby food. He would like to see the company expand into healthy foods for children and adults so the company can grow in sync with the families who trust the Oh Baby brand.

“There are several large grocery chains we hope to pursue and there is plenty of demand fueled by consumers wanting more natural foods,” Efurd said.

Oh Baby foods will continue to be manufactured in California, close to where the products are sourced, Efurd said. Also, the west coast distributors that worked with Oh Baby in recent years are setting up offices in the Northeast to handle the brokerage and distribution for that region.

“We get calls all the time from global distributors looking to export natural baby food into China. If you think about it there’s no better place to manufacture the baby food than California, because it’s close to the fields where the ingredients are grown, and it’s near the west coast ports for shipping to Asia,” he said.

Efurd is happy to keep Oh Baby brand in Fayetteville, but Blackhive plans to take it mainstream in the coming months with an expanded distribution, nationally and globally – which is just fine with Free.

Free can definitely see herself mentoring other startups particularly helping with operations expertise, which is lacking among many of the typical angel investment groups. She said raising second and third rounds of capital for expansion is almost impossible locally, despite the active angel groups.

“I know exactly what it’s like to bootstrap a small startup, bring in investors and then grow it to national distribution and then exit. Not too many people can say that. I don’t have any regrets about Oh Baby. My goal is to give back in some way. While I love spending time with my family for now I wouldn’t be surprised if I end up with another business in a few years,” Free said. “Whatever it is, it will involve local food which is another passion of mine.”