Eastern Iowa food firms ask investors for capital

You might call it speed dating for money.

Three Eastern Iowa companies were among 21 food and beverage firms making pitches Wednesday for investment at the second-annual American Food Venture Forum in Des Moines. Each company had 15 minutes to make its case to angel investors or venture capital firms.

Anna Sobaski, founder of Breads from Anna based in Iowa City, delivered a fast-paced overview of her business, which produces and markets 10 gluten-free baking mixes sold in stores nationally and internationally and on the Internet.

Sobaski stressed the taste, texture, purity and nutritional value of her products as she asked for $500,000 from an angel investor.

“We plan to use $250,000 to expand our production and the other $250,000 to restructure some debt and marketing,” Sobaski said.

“We started co-packing for other gluten-free companies in July. We need to hire additional help to grow that, and we need a director of operations, some key personnel and some support staff.”

Sobaski said Breads from Anna expects to have annual sales of $2 million in three to five years. She said some projects in the works may take sales significantly higher.

A company that provides gluten-free materials, Nu-World Amaranth Inc., is seeking $1 million to expand its contract manufacturing capabilities.

Nu-World Amaranth has two production sites in Dyersville that supply gluten-free ingredients to both niche and large companies such as ConAgra.

Susan Walters-Flood, president and a co-owner of Nu-World Amaranth, said the company's ingredients are found in many products on grocery shelves.

“We also are manufacturing cake mixes and getting into ready-to-eat hot cereals,” she said. “The market for gluten-free foods grew to $1.6 billion in retail sales in 2008. By 2012, that market is expected to reach about $2.6 billion in annual sales.

“We see tremendous opportunities to work with niche and mega-brand companies to bring additional products to market.”

Irina Kratko, president of the Quadro Group LLC in Iowa City, told potential investors that her company's imported ultra-premium vodka has the potential to return them five times the annual sales in five years. Kratko was seeking $5 million, which she said could be broken down in cash infusions of $2 million the first year, $2.3 million the second year and $1.2 million the third year.

“We have a very flexible financial schedule,” Kratko said, “so we can modify our growth strategy depending on how much we get each year.”

Quadro vodka is manufactured in Russia and imported exclusively to the United States by Quadro Group. It sells for about $31 a bottle in urban areas such as Des Moines, New York and Los Angeles.