Anda Asare, Labs of Latvia
Health technology startup Nutrameg, which runs seven different apps for weight management, expects to reach a turnover of 20 million euros this year. The company’s future plans are even more ambitious: Nutrameg aims to become the go-to for conventional medical care when it comes to healthy eating.
The idea is to create a single system where doctors register patients with diagnoses for which diet is the main treatment, such as type 2 diabetes, colitis, gastritis, high blood pressure, athritis, etc. The plan is that the doctor will register the patient, indicating the diagnosis, permitted and forbidden food items, while Nutrameg specialists will provide specific dietary and lifestyle recommendations. In an interview with Labs of Latvia, the founder of the company, Kristofs Blaus, tells us more about Nutrameg’s origins and future plans.
How did you come up with the idea for Nutrameg?
Kristofs Blaus: I was underweight myself. When I went to the doctor and the nutritionist, they asked rather superficial questions. I read up on the subject and realised that there were more factors affecting weight than could be inferred from the questions they asked. What’s more, one doctor did tests, while the other didn’t. I realised that the process is not complete: each specialist asks different questions, each has different conclusions. It was clear that we needed to be able to develop a system where we ask people everything that is relevant to their diet and weight. And if no disease is detected, weight should be addressed through proper eating and sport. So I came up with the idea of a system that suggests what to eat, keeps track of weight changes, and learns from the user’s input during this process. Many years have passed to get from the first prototype to where we are today. We’re currently developing the ninth version of the product. Compared to the first one, it’s like night and day. That’s a good thing: we learn from our experiences and improve the product all the time.
How does the product work now?
Kristofs Blaus: We have seven apps for different regions and with different focuses, such as Mediterranean, vegan, keto diet plan, etc. When people open the app, they get a lot of questions about lifestyle, health, and nutrition. They tick all the products they like or dislike and would like to use from our 180 food options, and choose the type of recipes they want to cook, like economy or varied, and how much time they can dedicate to cooking.
And then, in seconds, the system offers a tailor-made programme with all the meals of the week, from a huge number of options and variations. As a result, the person likes the food and is focused on a specific outcome: losing weight, building muscle, etc. All the foods meet the required calorie count and nutrient ratio, and are tailored to the needs of the individual in several dimensions. From then on, the user keeps track of their weight by checking how they’re doing every day. We’ve patented a methodology that learns and keeps track of whether progress is optimal. If progress is too slow or too fast, the system adjusts the diet plan. To adjust the diet plan, in a typical situation, a person would make an appointment for the next visit to a nutritionist in a month’s time and pay, for example, 50 euros to assess the results a month later. Our apps perform this analysis place every day at a cost four to five times lower.
I heard you mention a patent. What exactly have you patented?
Elīna Balode, co-founder of Nutrameg and certified nutritionist: In order to create a nutrition plan for a client, every nutritionist and dietician takes into account scientific research on what a healthy diet means, the breakdown of nutrients needed, etc. Our system also takes into account a lot of research in this field. We’ve patented a method that can develop quality nutrition plans that help users achieve their goals: to lose, gain, or maintain weight. Moreover, this is done taking into account the information provided by the user about their health problems. The second part of the patent concerns how we deal with feedback and data from users about their progress. We’ve been working for many years, we have data from millions of users – we put together scientific research, our own database, and customer experience.
Have you had any surprises about how customers are doing with the app?
Balode: The most rewarding thing is to confirm that nutritional science works: if you stick to a healthy diet, you see improvements to your health. It’s not a surprise, but a joy that diet plans work and that people have fewer health problems, such as lower blood pressure or better blood sugar levels. This is proof that technology is helping in this area too.
How widely do people use the Nutrameg apps?
Kristofs Blaus: We’re in every country except North Korea. The number of active users is confidential, but the 17 millionth user registered on the system this year.
How are active users different from others?
Kristofs Blaus: Active users are customers who are currently paying.
Which countries have the most users?
Kristofs Blaus: Western Europe and South America. Scandinavia, North America, India, and Canada are also actively attracting users.
Why do Western Europe and South America stand out?
Kristofs Blaus: We’re experimenting a lot with attracting new users, and it just so happens that Germany, France, Spain, and Italy have been the most successful. After Spain, we entered the whole South American market, because the Spanish language is predominant there. Our competitors are usually stronger in the US market, where they have 90% of the customers. We have grown in a different way, gradually taking smaller markets one after the other.
Our greatest achievement is that we offer and have localised our service in more than 30 languages, taking into account food traditions and food availability: both what is available and familiar, and the cost.
For example, in Africa, dairy products are hard to find or expensive, while in South America people eat very different foods to those in the Mediterranean. Over the years, we have taken user feedback into account and have also monitored the product ourselves to ensure that it’s suitable for use in different parts of the world. So, we can safely say that we offer a nutrition plan appropriate for each continent. This is one of the greatest localisation achievements in our industry. Compared to other companies, we’re present in three times more regions and languages than others.
What about the competition? How fierce is it?
Kristofs Blaus: Competition is increasing every year, and work is getting more difficult. At the same time, obesity is one of the biggest problems facing adults: as many as one in three are affected by weight problems. So, the market is still big, with many solutions – nutritionists, gyms, supplements, new medicines. There are a lot of solutions, and there are a lot of people who need help in one way or another. Seven years ago, we were one of the first to offer such apps. Many people didn’t understand them. Now there are many such players, which is a good thing in a way – the service is becoming better known, users are smarter, they can appreciate the benefits of one app or another. In these circumstances, a good product is increasingly important.
One of the things that differentiates us from our competitors is high user satisfaction. Customers stay with us for a long time because we work hard to keep them happy. We are also one of the cheapest: competitors choose to sell their service for significantly more.
How much is the company’s turnover?
Kristofs Blaus: Putting all the group’s businesses and apps together, we are targeting a gross turnover of 20 million euros this year. In the second half of the year, we’ll come up with some new products and maybe we can do even better.
How difficult is it to achieve such a high turnover in this sector?
Kristofs: It’s challenging. Because we are very localised, we have to keep track of many factors. Each market has a different language, currency, payment, and eating habits.
If there is a crisis in a market, for example hyperinflation, and a currency loses half its value in a year, you have to think what to do. It’s certainly difficult to work in such a localised way.
What have been the biggest challenges so far?
Kristofs Blaus: One huge challenge comes from competitors who are constantly trying to stay one step ahead. When we come up with something, they immediately try to copy it. It’s challenging, but this is the industry practice and everyone has long accepted that it happens.
Last year, in one South American country, hyperinflation kicked in and we had to triple the price of a service to make it profitable to operate at all. We had built up a good relationship with our customers over a number of years, which was severely affected by the price change: many of them could no longer afford to pay for our app. So we had to look for a different business model and a new audience. This is one example of an external problem that affects us when working so globally.
Why have you chosen this path?
Blaus: I see where we want to be, and I am doing everything I can to get there. If we let ourselves down and don’t get there, we will survive. But the team and I wouldn’t be able to live with disappointing an investor. Investors are supposedly counting on something going wrong, but I’d feel very bad if I had to announce at a supervisory board meeting that turnover had only reached 15 million euros instead of the planned 20 million euros. I have business friends who are also going through it, but not so much that it stops them from attracting investors. They have a more sporting attitude.
In the world of startups, there are two ways to grow – on your own or by attracting investors. If we had attracted funding from investors, we would certainly have grown faster and with fewer mistakes. The partners would have given us good advice that would have saved us a lot of problems. At the same time, we work frugally and carefully, as no millions have fallen from the sky along the way.
We currently have one development plan that will not be possible without external investment. That’s why we have started talks with several investors.
I first wrote about your Mobile History project more than 10 years ago. What else have you done in the time between our first conversation and Nutrameg?
Kristofs Blaus: Yes, Mobile History, which offered the possibility to learn history on your mobile phone, at that time still via SMS, was my first business project in 2007 or 2008. This was followed by Mobile Driving School, a similar learning tool.
After that, our small team also worked as an agency developing various portals, websites and mobile apps. This was followed by Mana Balss [a digital democracy tool], which is now a standard solution for anyone who wants to improve something in the country.
In the middle of all this, Nutrameg was created. And last year, when Russia invaded Ukraine for the second time, several startups came together and launched the Entrepreneurs for Peace initiative. To date, entrepreneurs have donated more than 6 million euros, which quickly transforms into things Ukraine needs: drones, helmets, cars, fuel.
For a long time, you were rather quiet and did not talk to the media.
Kristofs Blaus: There was a time when I had quite a lot of publicity, was invited to speak at various events, interviewed and received prizes. But I myself felt that the business results were not the best. I also realised that publicity can also be negative: often during the working day I was thinking more about what to say in a lecture in the evening than about what needed to be done in the company.
So, I figured I had to cut publicity out of my life for several years. And within about a year and a half, the turnover of the company quintupled. I deliberately kept quiet all that time.
What has changed now is that we have really done something very impressive. That’s why it seems important to talk about it. We’re starting to compete with huge companies, fighting for the best talent in the market and partners, so it’s important that not only our competitors know about us.
What are your and Nutrameg’s plans for the future?
Kristofs Blaus: We’re working on a bigger initiative to motivate our most active users to not only follow the nutrition plan, but also to film how they cook these meals and post them on social media. We have users who write us a longer email every few days about how they’re doing: we’re thinking about how to reward these highly engaged people for the content they produce. We could, for example, show a breakfast recipe on the app and see which people have already tried it, watch a video, and talk about how to avoid falling back into old habits in the third week.
The next big development plan is to become a stage in conventional healthcare. There are many diseases where diet and lifestyle are the foundation of treatment, such as type 2 diabetes, colitis, gastritis, reflux, high blood pressure.
Our idea is that the attending physician registers the patient in our system, notes the diagnosis, the person’s favourite foods, and obtains a health-supportive menu. In addition, the doctor will be able to monitor how the patient is doing with the recommendations and whether there is any improvement in health.
Sounds interesting. When might something like this be possible in real life?
Kristofs Blaus: This service could be introduced in 2025. There are still a number of preparations to be made.