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‘Retrovate’ don't ‘innovate’ granola startups, says former Kellogg’s director

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Douglas Yu

By Douglas Yu+

19-Jan-2017
Last updated on 20-Jan-2017 at 10:30 GMT2017-01-20T10:30:42Z

Granola bars play an important role in Simply Eight's overall business. Pic: Simply Eight
Granola bars play an important role in Simply Eight's overall business. Pic: Simply Eight

The increasingly crowded granola bars category has made it difficult for startups to gain ground. However, introducing new ingredients might not be the solution, suggests Ernie Pang.

Pang, who worked at Kellogg’s for 12 years, is the founder and CEO of Simply Eight, a Michigan-based firm he claims offers an “uncomplicated alternative” to popular packaged breakfast and snack brands.

Simply Eight’s key brand is Junkless, which includes a line of chewy granola bars and cookies.

Cleaning up basic family favorite flavors

Most granola bar startups focus on creating or searching for the next nutrient-dense ingredient, said Pang.

“However, we’re going in the other direction by looking to see how best we can ‘clean up’ basic favorite flavors,” he added.

“We’re more about the absence of negatives than presence of positives. Thus, we ‘retrovate’ more than ‘innovate.’”

When Pang first started Simply Eight, he was frustrated to find that national brands tended to be resistance to change, certainly when it came to removing "qestionable ingredients,” he continued.

This is because “change can introduce risks, such as increasing cost, lowering margins or changing taste profiles, with the potential of losing loyal customers,” Pang conceded.

This resistance, though, has become an opportunity for Junkless to grow.

“We’ve spent the last three years building the foundation for our business, in terms of our infrastructure, our offering and market strategies. Along the way, we’ve experienced strong momentum, growing some 70% on a compounded basis,” he claimed.

Under-represented flavors

The idea of eliminating complex ingredients has incentivized Simply Eight to come up with new varieties to its Junkless granola bar line.

Founder and CEO of Simply Eight, Ernie Pang

“We are focusing on cleaning up basic flavors rather than looking for the next superfood ingredient. That is what most startups focus on – the search of the next nutrient-dense food. We’re going the other direction by looking at the category staples to see how best we can ‘clean up’ the snack.”

Earlier this week, Junkelss released two new flavors of granola bars: 100% strawberry and cinnamon roll. Both products come in cartons of six 1.1 ounce bars, retailing around $3.99.

Pang said the company spent a “sizeable 4% of sales” on developing the new products, even though that dollar amount is “miniscule” compared to the CPG industry standards.

“These flavors represent top selling flavors in adjacent breakfast and wholesome snacks categories, like cereal bars and toaster pastries. Yet they're under-represented in the granola bar category,” Pang added.

Simply Eight is currently in the process of confirming the distribution for these products in mainstream grocery, according to the company.

“ShopRite has accepted our new flavors and will begin rolling out the products in selected locations in February and March.”

Granola is here to stay

Granola bars are perceived as candies; a result of the more indulgent candy-like ingredients that have crept in to enhance taste, Pang said.

“This includes the rising amount of sugar being added into granola bars,” he added. “Junkless contains 0.2g of sugar per gram, compared to some of the leading national brands at 0.3g of sugar per gram.”

“The [common consumer] misunderstanding is that granola bars aren't bad, and are fine for kids or adults to have as a treat. But if you do have one as a treat, isn’t it better to have one that has a lower amount of sugar?”

The bar segment has also seen a rise in savory bars, as manufacturers warm to the idea of the bar form being the future of meat snacks .

Pang explained the meat bar phenomenon is also linked to the growth in protein-rich diets, but doesn't think the protein diet is for everyone, especially kids.

“There’s always going to be a need for favorites like granola bars,” he said.

“Granola is here to stay, either as a snack by itself or as an ingredient in other snacks. I do believe the industry will introduce more complex granolas made from nutritionally clean ingredients.”

Simply Eight said it is poised for rapid growth, targeting $1m in sales over the next 12 months.

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