Srsly Low Carb is a UK-based maker of low-carbohydrate bread, pasta, noodles and pizzas. Founder Andy Welch started the business in 2019 as a ketogenic-friendly company.
The ketogenic diet ultimately involves consuming minimal carbohydrates and a high amount of fats to keep blood glucose levels low. The liver then produces what are called ketones – a type of chemical – which the body uses in the absence of glucose, in much the same way as fasting. When ketones accumulate in the blood by burning fats for energy instead of glucose, the individual is said to enter a state of ketosis.
Go deeper with GlobalData
Keto diets have received a fair amount of criticism in recent years but they are followed as a complementary therapy for a host of health afflictions, primarily high blood pressure and heart disease, as well as diabetes or prediabetes.
Welch spoke to Just Food to discuss the benefits of a keto diet, how those suffering with diabetes can benefit from Srsly’s low-carb products and the issues with ultra-processed foods.
Just Food: What inspired you to set up Srsly?
Andy Welch: I knew nothing about it beforehand. All the industries I’ve worked in before, none of them have ever been food and drink. They’ve been engineering, trade, sort of things like that. Keto is avoiding the carbs, which is a real strict approach with carb-less alternatives. So, you could make your own bread, make your own pasta, make your own things, and all of it was pretty disgusting. I can’t bake or anything so whilst I was doing it, I just had that mindset of: I wonder if I could commercialise this? That’s kind of the premise of where it came about and, after a few attempts, that’s how we’ve got the company up and running.
JF: What sort of consumer were you targeting?
AW: People were trying our food for two key reasons. Number one was weight loss and number two was around managing diabetes, starting with type two across the board of reducing stabilising sugars et cetera. That’s how we’ve grown the company. You think about someone who is wanting to lose weight or manage medical diabetes, type one or type two, you don’t just do it for lunch. It’s all day from the wake-up and then going to bed. If you can make it easier to manage then that’s it but you can’t eat toast seven times a day, can you? That’s how the brand has expanded because, in looking at what else could we offer our customers, people just kept coming back saying: “This is a game changer. I haven’t been able to eat breakfast for seven years, now I can eat it.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataWe looked at the market and, as the low-carb market has grown over time, over four or five years, the smaller companies or brands have come into it, and the dominantly easier-to-market or get-to-market things are actually like snack bars and such. I thought that while it would be great to have our own brand, there are other products we’d like to focus on so we looked at to where the biggest gaps were. We’ve gone from bread and bakery into pizza. And whilst we can do condiments and those sort of things, the noodle and pasta market is really where we spent the last probably two years developing it.
JF: How has Srsly grown since inception?
AW: We went from around £30,000 ($37,160) a year to £1.6m of revenue in our first year of trading. We had a combination of things that would put us on about £3.2m treachery and probably keep on growing but that flatlined straightaway to about £2m and it’s about £2m again.
I’m not one for excuses, but there have been a chain of events that have impacted the journey. There was an inordinate amount of purchase online initially, so, when Covid was ending, where there was I think a 32% drop in online sales for Amazon and the rest of the world so we had to absorb that. But, at the same time, we were just started to sell into Europe without advertising. We were serving about 14 or 15 countries including the UK. We were getting about 5% growth week-on-week for our first year of trading in the UK. We launched about three months before the D-Day of Brexit, which we were told was not going to be an issue and we were getting about 5% growth, and then the wheels fell off on that one completely.
JF: How have you dealt with the supply-chain pressures?
AW: We’re really just launching back into Europe now but it’s been kind of one thing after the other. [Relaunching] is positive but actually you can’t get a hold of ingredients, for example. And when you can get a hold of ingredients, there’s an energy crisis that puts my baker’s costs from £5,000 a week to £26,000 a week. He’s going to pass those costs on.
I think in our first two years, we did about 3% inflation combined to try and keep it attractive but you can imagine margins eroding away. You think there’s a possibility that’s going to be okay but now it’s not with the war going on. We’ve been really challenged at the moment.
We’re at about £2m again, for the last three years we’ve been £2m. And we’ve taken probably £250,000 worth of costs out of business in the last six months, so now we’re a profitable business anyway. We were from the first year.
JF: Have you recently completed any fundraising?
AW: We had a small raise at the back end of last year with Seedrs, where we raised around £350,000 and gave away around 3% of the business. We were looking to give a large equity amount away on the Seedrs campaign. We did hit our initial target, but we expect it to go a lot higher.
JF: Are you looking to raise any more?
AW: The target in mind is £3m but what we’ve completely restructured the business. Whilst we’re in effect a young, growing business that should be spending everything on marketing and grow, grow and grow, we took a step back and prioritised that every month needs to be a profitable month, which, for the last four months, is the case. Once you’ve got that through the door for the next six months, we’ll be more serious in terms of the investment hunt, because the fact is the attractiveness of the company will be much better than it has been and then we’ll have a conversation. In the meantime, if there’s any funding that comes around to facilitate certain activities, we will look at that as individual projects.
JF: How are Srsly low-carb products made?
AW: The complexity of our products, in terms of making them, is difficult. There’s always an element of further development when we’re doing the production runs. To give you an example: bread has about 10% to 12% gluten in it but ours has around 60%, 70% or 80%. It is very difficult to work with and therefore one machine is either too sticky or it’s too tight and won’t proof. There are all sorts of challenges we get with it.
We’ve got five or six manufacturing companies that work on different categories. We’ve got bakery, pizzas and pasta is our biggest project we’re working on right now. In our structure, we will look at either developing more of an ownership manufacturing structure with the skill set but we bring in some of the machinery or begin to bring things in-house as well. It’s going to be a transitional thing over time but on the whole, it is all outsourced manufacturing.
JF: Are you looking to expand the company away from its online shop?
AW: So we do have plans to continue growth on B2C [business to consumer]. Because we have products that are not necessarily bread that goes off in ten days but we have got other products such as our ramen pots which are a complete gap in the market, especially in America and we’re talking to some very large retailers in America.
We’ve got an exclusive agreement with Gourmet Food International in the US that has relationships with the majority, if not all, the key retailers. But whilst we’re shipping products out there, we can also facilitate Amazon quite easily so that’s kind of a focus on B2C and in products to expand the network and geography and, in the same way, we’re doing that with Europe.
On the retail side, when we first took on retail events, we had queues from all of the retailers, including Lidl, Aldi, Subway, Tesco, Sainsbury’s and more. The conversations were never quite there yet and a lot of conversations were all about price as you can imagine.
But, the traction and the effort and investment required to gain traction, we just are not set up to have a team of five or six people to take different regions. I think there’s going to be a large growth in retail but we’re not focusing necessarily on the larger quantities as it were. Until we hit the real gap: our lower-risk products, which is our ramen pots and our pasta which have a much lower risk of food waste where I think we will reengage with the retailers to see if they’re interested in trying some.
JF: Have you seen differences in consumer behaviour between Europe and the US?
AW: The UK often follows the trends really quickly with whatever it is from the US. I think that was slowed down – and from a nutritional perspective for a low-carb and keto for the generic consumer, not from the medical stuff we’ve got within the NHS or anything like that. Keto is still the largest diet in the US. Now, therefore, we see an opportunity there but it’s much more mature.
The longer shelf-life products that we’re looking to introduce – the healthy versions of those products like a healthy ramen pot – that is a clear gap in the market. So whether that be in the US or Europe is kind of irrelevant. You know, it’s based on our product category that we’re looking to drive up.
The opportunity in Europe is definitely there. I think it’s bigger than it is in the UK at the moment.
The opportunity in Europe is definitely there. I think it’s bigger than it is in the UK at the moment. But, rather than opening our doors to every country, what we’ve got to do now is decide which one are we going to focus on. We can still do that on Amazon and our website but actually we’re going to do a marketing campaign, get influencers and do all the right things we need to do to really drive it. Let’s just do it on a per-country basis. We’ve got a limited number of countries we’re looking to do. The other areas of interest are India and the Middle East.
JF: How do you see health and wellness trends progressing and affecting Srsly’s business?
AW: There’s two sides of a health and wellness coin. There’s one side which is all about faster, stronger and gym, with a focus on protein. And, by default, if you’re taking out a lot of carbohydrate as a macronutrient from a thing, it needs to be filled with other things such as protein or fat and we tend to let the fats naturally come into the ingredients. Predominantly, Srsly has huge amounts of protein and huge amounts of fibre and, as a nation, we are woefully lacking on in fibre intake.
The other side of the health coin is helping people manage, prevent, overcome or take control. And that for me is where a lot of our customers also sit as well in terms of their choice to manage their weight. People can all be whatever weight we want to be but, if someone wants to lose weight, and they struggle with the typical highly processed foods that they get from supermarkets, it scientifically works. I’m not saying our products are scientifically proven but their structure has had many, many studies around the world.
Low-carb is common sense nutrition. We are low-carb because that’s our brand, that’s the mindset, that is us compared to the current state of products today. But are we low-carb? Or are we just the right amount of carbs?
JF: Is being ‘clean-label’ important for you?
AW: The companies providing real, true, value in their products, the ones that really focus on it, tend to be younger companies, emerging companies. I think there’s more of a mentality of thinking about clean ingredients and sustainability. They’re not backed by scientists who are pretending that food is tasty, and making people need more of it and getting higher sales revenue. You know, we’re generally not that skilled, unfortunately. We just need to make it low-carb, taste good and feel like bread, and we haven’t got access to all these crazy things. So naturally, our products tend to be cleaner label because of the way our knowledge allows us to go, ‘well, let’s just try these basic things.’ You know, it’s not necessarily rocket science. It’s common sense, without all the trickery that goes around it.
So our ingredients list is definitely on the right road. We do have a very small amount of seed oil in some of our products, which is not necessarily a super clean product. You can get good quality seed oil, not all seed oils are the same. We would love to not use seed oil but the cost is quite prohibitive in terms of the ingredients now and introducing it will potentially push it too far from our customers price-wise.
