A Little Rock startup that aspires to be at the forefront of the fast-growing, multi-billion dollar food specialty market can trace part of its roots back to the public tennis courts of Hope, Ark.
Kent Wood, founder and CEO of Little Rock-based ReadtheLabl, and Jon Wood, the chief intellectual advisor for the local startup, are both former tennis pros who grew up together in southern Arkansas and have now teamed up with other nutrition-minded advisors and venture capitalists to capture a portion of the growing $140 billion food specialty market.
Kent, no relation to his former Hope tennis rival with the same last name, is the visionary behind the unique startup that specializes in developing pre-packaged, specialty-made healthy sauces and products locally in Little Rock.
In the last week, the Little Rock startup debuted its three introductory sauces — Veggie Soiree, Matcha Sriracha and Marinara Plus — locally at the Heights Corner Market and the Little Rock Marathon Expo. Over the next several weeks, the company will demo its products at several health-oriented grocery stores in Central and Northwest Arkansas. By mid-March, the original plant-based specialty sauces made from fresh ingredients with no additives will be available on the company website and at Amazon Prime, he said.
“We are cooking away and building inventory,” Wood said at the startup’s product launch.
Like many entrepreneurs, Wood is hoping to bring to the market a product that solves a current problem. For ReadtheLabl, the target audience is health-conscious consumers who are looking for whole food nutrition with great taste, he said.
For example, the company’s Veggie Soiree product is an original plant-based vegetable specialty sauce made from a dozen fruits & vegetables, providing a broad spectrum of healthy nutrients. Two portions, or 8 ounces, provide an adult with a full day serving of vegetables.
Wood said the pre-packaged vegetable product is great as a soup, dip, or topping sauce on your favorite pasta or rice dishes. “We’ve found that it’s the best thing to pair with avocado,” he said.
The Marinara sauce is aimed at the growing number of vegetarians and vegans who are looking for a natural plant-based source of Vitamin D. The former tennis pro described the vitamin-rich product as the first truly nutritious marinara sauce. “It’s the best tasting marinara you can buy in a package,” he boasted.
The Matcha Sriracha is a spicy topping sauce packed with matcha tea, hemp seeds, goji berry, maca root, avocado oil, and sweetened with dates to pack a healthy dose of micronutrients and antioxidants.
To get consumers familiar with the locally-produced product, Wood said the Little Rock startup will market locally and online first. After that, ReadtheLabl hopes to expand in Texas, New York and on the West Coast, reaching out to health-conscious consumers, marathoners and other endurance and fitness athletes looking to supplement their daily diets.
Founded nearly three years ago as Naturesauce LLC, Wood said he changed the name of his early-stage startup firm after a meeting with a marketing professional who convinced the Hope native that his former moniker was off kilter.
“He told me, ‘It seems like the only message you care about is read your label.’ Because if they read your label, they’ll see that you have the most nutritious product there is,’” said Wood. “So, I thought, that is going to be the name of my company and my brand. Turn it over, read it and you’ll buy it.”
Although Wood had no entrepreneurial background when he started his company three year ago , he brought in key advisors that he mainly knew from his years as an instructor on the pro tennis circuit in Europe and the U.S. But instead of hiring those advisors full-time and giving them hefty salaries, Wood said he gave each small amounts of equity in the firm to help him navigate the early growth stage.
For example, Jon Wood is also a former tennis pro who attended high school in Hope, Ark., with the ReadtheLabl CEO. The Harding University graduate is now the Chief Intellectual Property Counsel at Bridgestone Americas headquarters in Nashville, Tenn., and a board member of the National Inventors Hall of Fame, the Intellectual Property Owners Association, and Street Law Inc. He is aiding the Little Rock startup with its trademark branding applications and protecting the company’s secret recipe, said Kent Wood.
Other members of ReadtheLabl’s impressive advisory team include Rich Petrocelli, a New York City investment banker who will serve as the Little Rock startup’s chief financial advisor. Petrocelli has an extensive and diverse background in corporate finance, private equity and business development, and is currently the managing director and CFO at Saratoga Partners, a middle market private equity firm located on Wall Street.
Other key partners include Jeff Schafer, the Chief Revenue Officer at Metisentry, an Ohio-based startup that helps businesses builds software applications with the goal of changing the way people do business. While Schafer will serve as ReadtheLabl’s strategic advisor, Spencer Feldman, an associate at New York City-based Reitler Kailas & Rosenblatt, came on board to help the Little Rock startup find funding for its next stage of development.
Feldman’s Wall Street firm specializes in venture capital financing and fund formation, mergers and acquisitions, securities and capital markets, and litigation. “Pulling all these people in has really made me smarter,” said Wood.
Locally, Wood’s wife, Carol, his sister Buneva, and Connelly Weeks will support the company in Little Rock. Weeks, who received her nutrition degree from Texas Christian University and went on to complete her post-graduate dietetic internship at the University of Arkansas for Medical Sciences, will be responsible for product innovation and new product research and development.
“She is integral in aligning ReadtheLabl’s core values and nutritional excellence with the company’s marketing, sales, and quality control initiatives,” said Wood.
Wood said he and his wife, who handed out ReadtheLabl samples recently at the Heights Corner Market in Little Rock, have invested their own funds and time into in getting ReadtheLabl to this stage. The Little Rock food entrepreneur said he has also worked with University of Arkansas researchers and scientists in Fayetteville to come up with the perfect natural product he was looking for, produced with fruits, vegetables and other natural products.
The local startup executive said he could have farmed out the production and distribution of his new product, but didn’t want to lose control of his company’s early stage growth or water down his secret recipes for his sauces.
“That’s why most food (startups) fail, they lose control,” said Wood. “So, I basically created a whole new production process because no food industry out there is making the way we do. I am going to do it right or I’m not going to do it.”
To keep that control, Wood said he has received $130,000 from local investor Pat Riley of the Little Rock Athletic Club fame, bought his own equipment to develop his own 4,500-per week production facility, and buys all his natural products from growers and farmers locally. While the company was in the development stage, Wood said he only gave 12% of his equity as he developed his product to get to Saturday’s launch.
“I got just enough money for me to get to the stage where I am now,” Wood said of the company’s pre-revenue stage.
For the next round of funding, Wood said his advisors and lawyers hope to raise $600,000 in working capital for the next year and be profitable by the third quarter as ReadtheLabl products are sold online and get on the shelf in Arkansas grocery stores.
“So that’s the plan. Why sell the company off when you can grow it,” he said. “We want to be debt free and stay that way and use working capital to get us through 2019 and into 2020, and then build our company with ongoing revenue from then on.”
Long-term, Wood said his plan is to build ReadtheLabl into a values-driven, Arkansas-based food specialty company over the next 10-15 years, rather than grow it into a profitable startup and then sell it for a few million dollars.
“I want to build this company because I have run across a lot of (startup) CEOs and entrepreneurs who started their own companies, and almost every time they have a game-changing idea or startup, they sell it off too early,” said Wood. “And even when they are allowed to stay in charge, the vision gets lost and that is the thing that makes it great.”
To learn more about ReadtheLabl, click here.