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No pink slime in this start-up's chicken nuggets

No pink slime here: The co-founders of this frozen-food start-up say their goal is to provide healthier chicken nuggets to every kid in America.

Bay Area-based Hip Chick Farms is an organic, frozen poultry product company founded by Serafina Palandech and her partner Jennifer Johnson, former sous chef at Chez Panisse in Berkeley. The company sells organic chicken fingers, chicken meatballs, and gluten-free chicken nuggets in frozen-food aisles throughout the U.S.

"We're lucky to be a chef-led company that really understands the trends," said Palandech, the CEO.

Hip Chick Farms Co-Founders Jennifer Johnson (left), Serafina Palandech (center) and their daughter, Rubyrose.
Source: Hip Chick Farms
Hip Chick Farms Co-Founders Jennifer Johnson (left), Serafina Palandech (center) and their daughter, Rubyrose.

Hip Chick Farms says it offers a lower sodium, antibiotic-free alternative to what's currently in the marketplace — retailing at $6.99 — while its organic line retails for $7.99. The company also says its chickens are humanely sourced and raised.

Palandech says she doesn't consider Foster Farms and Tyson's as direct competitors, but rather Applegate and Bell & Evans. "We're competitively priced with [the latter two]," she told CNBC.

Palandech also says she's keeping the focus on poultry and is developing such products as organic turkey burgers and meatballs – even a children's meal.

Johnson, who has cooked for celebrities as well as President Barack Obama, is executive private chef for Ann and Gordon Getty, heir to the Getty Oil fortune, in San Francisco. According to the company's website, Johnson's work in the Getty family kitchen motivated her to start the company and share her recipes with the world.

Venture capitalist Nir Liberboim, founder of Uprise Ventures, raises the issue of scale, pointing out that the supply of organic chicken is highly limited and a lot of the large food companies have a hold on it.

Hip Chick Farms
Source: Hip Chick Farms

Palandech admitted that the supply chain has been one of the biggest challenges but said the company has been trying to work around this by developing strong relationships with farmers.

According to market research firm Packaged Facts, sales of frozen foods in the U.S. are projected to hit $23 billion in 2018, up slightly from $22 billion in 2013.

Analysts say the market for frozen-food products has remained relatively stagnant over the years, because many consumers tend to view frozen food as a less healthy alternative to fresh food. To combat this, analysts say, frozen-food companies are working to provide customers with more variety, lower prices and natural and organic products choices.

With Hip Chick Farms, its founders say they're relying heavily on in-store promotions and demos to make more customers aware of its offerings.

"Once they taste our product, learn our story, know that it's organic — we'll create new customers in the category," Palandech said. "I think one of our key elements to our success is teaching new people to go into the freezer aisle."

Hip Chick Farms
Source: Hip Chick Farms

Founded in 2011, Hip Chick Farms is headquartered in Sebastopol, California, where the co-founders live on their family farm with their daughter, Rubyrose. The company's products are sold in more than 1,800 stores nationwide, including Whole Foods, Target and Sprouts.

In 2015, Palandech and Johnson were named on Fortune and Food & Wine's second annual list of most innovative women in food and drink.

--By CNBC's Christopher DiLella | @cdilella

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