Power Pitch

Start-up milks a camel for all it's worth

Start-up milks a camel for all its worth

One start-up is betting on a new super food to shake up the dairy aisle.

"We're America's new dairy generation, and we sell camel milk," said Walid Abdul Wahab, the founder of Desert Farms, the first start-up producing its own line of camel milk in North America.

He told CNBC he wants to provide the U.S. with what he calls a "clean and better dairy alternative" that is already popular in Saudi Arabia, his native country.

Desert Farms offers three varieties: raw, pasteurized and kefir. Currently, 150 retailers across the U.S. carry the milk, including Whole Foods, and it's sold online. Some stores carry the milk fresh, but most keep the product frozen.

Wahab told CNBC his customers prefer frozen camel milk because it gives it a longer shelf life without adding any preservatives.

The camel milk is served in both eight-ounce and 16-ounce bottles and retails for between $18.99 and $21.99.

The Skinny

Jean Terminiello, former Coca-Cola sales VP and founder of the Big Beverage Co., was concerned the product is too expensive for the average consumer.

She wondered how people have responded to the price so far. Despite the $20 price tag, Wahab said his customers are drinking it up.

"The response that we get from most consumers is that they haven't been able to drink milk for the last 10 years until they discovered camel's milk," Wahab told CNBC.

Alicia Syrett, board member of the New York Angels, questioned what dairy category camel milk fits in.

"Camel milk is in its own category," Wahab told CNBC. According to the founder, some studies found that children with dairy allergies were able to consume camel milk.

Camel milk
Source: Desert Farms

Wahab also said he believes camel milk has more health benefits than other dairy beverages. "It has three times the amount of Vitamin C, almost 10 times the amount of iron and almost half the amount of fat," he said.

But the start-up enters a crowded shelf space, competing against leading dairy options such as cow's milk, and popular alternatives like soy and almond milk.

Market Research firm IbisWorld estimates that in 2015, the Dairy Farms industry generated $35.6 billion in revenue. The research firm also found that the soy and almond milk industry generated an estimate of $1.2 billion in 2015, after growing 7.2 percent year over year since 2010.

Still, the start-up might be well on its way to getting over the hump, as the founder likes to say.

According to Wahab, Desert Farms has 100,000 customers and has hit $1.5 million in milk sales since its January 2014 launch. Wahab also told CNBC the start-up is selling more than 5,000 bottles a week.

Its largest customer base is parents of autistic children. According to Wahab, autistic children can easily digest the milk, but camel milk has not been scientifically proven to treat autism. He also claims the camel milk may help improve motor skills, but this is anecdotal.

While the start-up is headquartered in Santa Monica, California, Desert Farms produces and bottles its milk at camel farms in Missouri, Indiana and Ohio. It is self-funded with $25,000, with no outside investments.

Wahab told CNBC he plans to expand the product line to include chocolate flavored milk, ice cream, even yogurt, and is also working on an infant formula.

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