One of the stars of the Richmond startup scene has filed for Chapter 11 bankruptcy protection.
O’My Foods, which makes O’My Dairy Free Gelato, filed for reorganization in the Eastern District of Virginia in December. The company listed 50-99 creditors and liabilities between $1 million and $10 million. It listed assets at between $500,000 and $1 million.
Emails sent to founder Allison Monette and the bankruptcy attorney representing O’My Foods were not immediately returned.
Monette and Julie Bishop founded O’My Foods in 2017. Monette worked in marketing at PepsiCo and Altria and dreamed of creating a dessert line that catered to people with allergies and dietary restrictions. She approached Bishop, who worked at Ukrop’s in product development, about teaming up and building a company. The two worked together for two years and eventually developed a line of dairy-free gelato.
"I knew early on that I wanted to make a really clean label, delicious dessert," Monette told Richmond Inno in 2020. "I was really inspired by people impacted by allergies and dietary restrictions, so we decided to make it fully allergy-friendly.”
The company raised more than $1 million, according to the bankruptcy filing. The filing lists 17 creditors with convertible notes that were termed “unliquidated.” A 2020 Richmond Inno story said the funding came from friends and family and some venture capital.
The company grew slowly at first but got a big break when it secured Wegmans Food Markets, creating a distribution network that spanned between Virginia and Massachusetts. Eventually, the dessert was placed in Sprouts and Kroger and was distributed in 1,500 grocery stores across 48 states.
The huge growth came with many accolades. In 2019, the company was given an rvAwesome Founders Awards for achieving national distribution.
Brad Cummings, managing director at Trolley Venture Partners, which invested $200,000 in O’My Foods, said shipping costs were a real challenge for the food company over the last year. The cost pressures made it hard to build a profitable business.
“O’My Gelato has an incredible couple of founders with a great product, but they could not control transportation costs,” he said. “They were brutal. At some point in time if you can’t make a product at volume to decrease your margin costs, you are in trouble.”
Monette told Richmond BizSense the increased shipping costs were a drain. She said she hopes to find a larger company to acquire O’My, believing that would be the best way to absorb the transport costs and move the company forward, according to the report.
Besides the investor debt, the company also lists $55,743 in disputed debt with Origin Food Group of North Carolina. According to its website, Origin is a contract food production company.
