Grant Thornton picks up the baton to sell Nourish Foods

As a family-owned company on a mission to replace overprocessed children's food with healthier options since 2005, Nourish Foods appeared to tick all the right boxes for a progressive, high-growth consumer-facing brand. 

B-Corp certified and stocked in the nation's leading retailers with high double-digit sales growth, the company known for its Whole Kids range launched new products earlier this year aimed at Gen Z shoppers as well as a line of healthy baby food pouches. When the Melbourne-based company was aiming to crowdfund $2 million mid-year, co-founder Monica Meldrum expected these new brands would help double revenue to $12 million in FY24.

The crowdfund fell well short of this aim however, and despite the leadership's best efforts to contain costs with a leaner team and more outsourcing-based business model following a strategic review last year, a lack of cash led Meldrum and her fellow co-founder, husband James Meldrum, to appoint Mark Everingham and Tim Heesh of TPH Advisory as administrators earlier this month.

The administrators had sought expressions of interest for a sale or investment by 13 September, but that deadline has now passed with the baton picked up by advisory firm Grant Thornton to get a deal over the line by next Tuesday (19 September).

On the day of that deadline, amidst "significant interest in the business" according to Monica Meldrum, John McInerney and Matt Byrnes of Grant Thornton were appointed as joint and several receivers and managers of Nourish Foods.

Grant Thornton highlights that not only was Nourish the first Australian kids' food company to become certified organic, but it now offers the largest range of organic foods for kids and toddlers in Australia. These products are sold in Woolworths, Coles, selected IGAs, Chemist Warehouse, and independent grocers, not to mention Nourish's partnership with Qantas and export deals in several APAC countries.

The receivers reiterate TPH's assessment that Nourish lacked the necessary working capital to sustain its operations.

Founders Monica and James Meldrum are keen to support the brand, under the control of a purchaser, to ensure that it remains available to customers and reaches its full potential, the advisory firm notes.

"Preference will be given to offers for the whole of the business and assets of Nourish, with minimal conditions," says Grant Thornton partner John McInerney.

"Assets include the various brands (Nourish Foods, Whole Kids, Offbeat Snacks and Just Add) and associated recipes, know-how, finished products, packaging and EOS promotional material for each."

Last week, Monica Meldrum posted on LinkedIn that it was hard not to feel heartbroken by the circumstances, or 'get caught up in the hysteria that comes with the prospect of losing everything'.

"Our shareholders, our suppliers, our customers, our team and our community, you mean everything to us. We are so sorry," she wrote.

"Please know that we did everything in our power to avoid this path but in the end time was against us and we were badly let down.

"I wish we had better news for you and that things had played out differently."

She wrote that she was unbelievably proud of everything that had been achieved, and the impact made over 18 years in driving forward a socially conscious and ethical business.

"Thank you to everyone who has supported, championed and believed in us. There is so much love for our brand and our business and the words of support have been overwhelming," Meldrum wrote.

"I will respond to everyone when I can but right now our focus is on ensuring Nourish is placed in the best possible hands so that it’s legacy can continue, the business can realise the significant opportunities that we have secured, and Nourish can go on to reach its full potential and everything we know it is capable of."