“We want to prove that cricket can be a viable, heavy-hitting protein alternative,” said co-founder Lars Baugh – who started the business last year with his identical twin Dave, who tried insects while he was deployed in Southeast Asia as an active-service US marine.
“People want to know, is this really a competitive alternative [to other protein sources], and the answer is yes it is,” Baugh told FoodNavigator-USA.
“Aside from the sustainability angle [cricket protein is claimed to have a lower environmental impact than meat and dairy owing to its high feed conversion rates and low inputs], cricket protein has more calcium per gram than milk and more iron per gram than beef and it contains all nine essential amino acids. So it’s highly bioavailable, although slightly slower to digest than, say, whey, but when you blend it with other proteins - as in our Cricket Complex protein blend - you can expect a higher net protein utilization.
“Our bars have a minimum of 15g protein per bar, about 35% more than bars on the market with the next highest level of protein. We’re talking 45-50 crickets in a bar [crickets contain 60-70% protein by dry weight].”
We sent hand-written thank you notes to all of our customers
That said, the customer base for Lithic Nutriton’s bars and powders [100% milled whole cricket powder, and protein powder blends], which were launched in the fall of 2016 on the company’s website, are not all hardcore bodybuilders, Paleo nuts, fitness freaks, or CrossFit fans, said Baugh.
“We got to know who was buying our products. We sent hand-written thank you notes to all of our customers and connected with them on facebook and they weren’t actually who we were expecting. We definitely still see athletes and fitness people as influencers and advocates for our brand, but what we found was that most of the people buying our products were just regular men and women of all ages."
And this bodes well for cricket-fueled products more generally, he said: “Ultimately we want this [milled cricket powder] to be a household ingredient that can be added in to virtually any recipe at home.”
Co-packer blues
While the Baughs originally went for the DIY option on the manufacturing front owing to the difficulty of finding companies willing to work with bugs (which are not kosher, and contain allergens], they have recently struck a deal with a co-packer that will hopefully start producing their products at scale in March, he said.
“We are currently in the process of tweaking our formulas so our protein bars can run on their line, and anticipate being co-packed by the end of March.”
Blind taste tests
As for suppliers, the Baughs use different grades depending on the products, he said. “We tested all kinds of different powders, roasted and milled, spray dried. So for nutrition shakes, we use a super fine powder that suspends better in liquids, whereas for the bars we use roasted milled crickets - which have a nuttier taste.
“From a taste perspective,” he added “if you’re making a bar, the natural sugars from dates and the nuttiness of almonds really work well together [Lithic Nutrition bars combine almonds, cricket powder, dates, honey, fruit (eg. banana, blueberries), sea salt and natural flavor].
“We’ve done a lot of blind tasting tests with other cricket bars and our bars have outperformed the competition 98% of the time.”
Sourcing cricket powder
So where do the crickets come from?
According to Baugh: “We source our crickets from our partner farm in Thailand. Their operation is registered with the Thai FDA, and follows GMP and HACCP standards. Our imported powder is pasteurized with heat and meets all US FDA safety standards.”
But why not source domestically? “We've found that our Thai powder has the best taste profile, in addition to an improved nutrition profile over other North American powders we've sampled,” he said.
“Eventually, we hope to source domestically, as the supply environment grows and improves in the US, but the quality, consistency, and capacity isn't there yet.”
Wholesale opportunity
While Lithic Nutrition is a branded consumer products business, meanwhile, it has also started supplying wholesale quantities of cricket powder to other small companies looking to get into the cricket food space, he said.
“We hope that other emerging businesses in this space can come to us for the best priced, highest quality, wholesale cricket powder. Chirps Chips, for example, sources their powder from us to create cricket powder cookie mixes. Chirps [which uses North-American-sourced, Non-GMO cricket powder for its chips] was also on Shark Tank last week, and got a deal with Mark Cuban! Woohoo!”
But why wouldn’t small companies just buy directly from the same sources that Lithic Nutrition is using and cut out the middleman?
“In short,” he said, “it isn't cost or environmentally effective for the Thai manufacturer to export a lot of orders to the US. As their distributor, we import large shipments, alleviating the manufacturer's time spent on individual customer information management, logistics management, and relationship management.
“We handle the logistics, import process, duties, and receipt as their exclusive distributor in the U.S. We manage the US interest, customers, and ship domestically. We are able to serve the lower-volume needs here in the U.S. that would otherwise be neglected due to the large shipping expense coming from Thailand.”
As for price, he claimed: “Our powder is also priced around 30% less than what cricket powder is being sold for on a wholesale level, allowing emerging insect-based foods companies a chance to preserve their margins, and deliver more competitively priced products to their customers.”
Go-to-market strategy
Like most new food brands, Lithic Nutrition started selling via its own website, but hopes to be on Amazon Prime by April, and is now moving into gyms and fitness centers as well, he said.
“We are also distributing locally in the Denver area at CrossFit/Athletic gyms, such as Apex Movement, the largest Parkour gym in the nation, and we hope to be in about 40 gyms/wellness centers by the end of April.”
Financing: We've bootstrapped this business from the start
As for money, the Baugh brothers relied on their savings, $12k from a kickstarter campaign and about $9.5k from winning a business plan competition in Denver.
“Aside from that,” he said, “we've bootstrapped this business from the start. We have begun discussions with VC/Angel groups in Denver, and are considering a potential fundraising round later this year, as we gain momentum.”
Right now we just want people to try eating crickets
Longer term, the plan is to add additional flavors for the bars and powders, introduce baking mixes, and support other innovators who are developing cricket-fueled pastas, sauces, and baked goods, he said.
As for sustainability, while the embryonic US cricket food industry has not – yet - driven seismic changes in the food system, and will likely not do so until it moves into products that displace meat and dairy in the American diet, you’ve got to start somewhere, he said.
“Right now, we are focused on introducing edible insects to Americans. We staunchly believe that people need to have a positive experience when trying bugs for the first time, which is why Lithic products were so carefully developed. We hope that Americans can identify with the advantages of sustainability and nutrition, rather than succumbing to a negative bias about eating bugs."