The Boulder, Colorado-based natural foods company has been producing nut, gluten, egg and soy-free confections through its Sun Cups brand, made with sunflower seeds.
The firm is now free of the eight major allergens after removing milk ingredients and has also moved into the chocolate bar segment.
Going dairy free
Speaking to ConfectioneryNews, Free2b Foods’ new CEO Mike Murray said it was a tough strategic choice to remove dairy.
“One of the reasons is that it's very hard to do,” he said. “It was a difficult task to deliver high-quality milk chocolate without dairy.”
Free2b Foods’ founder David Lurie previously worked in the hospitality industry as a chef and ran a company selling premium truffles to foodservice customers named Seth Ellis Chocolates,. A friend – whose son had a peanut allergy – approached Lurie in 2008 to produce a nut-free peanut butter cup for his son. “Days later he had thrown together a cup using sunflower butter,” said Free2b Foods CEO Mike Murray. This recipe was later refined and become Free2b Food's power brand Sun Cups.
The company is now using organic rice syrup powder in place of milk powder for its caramel and milk chocolate Sun Cups.
The allergen-free market
Free2b Foods entered the market as a confectionery company, but plans to expand into indulgent snacking and other food and drinks categories.
Murray said it comes as families with a food allergy sufferer in the household are seeking a wider range of good-tasting products.
“The need-state for consumers in the US is large and highly engaged,” he said.
Over 15 million Americans have food allergies and one in 13 children aged under 18 is affected, according to FARE (Food Allergy Research & Education).
Food allergies have increased in children by 50% between 1997 and 2011 and are projected to grow further, it says.
Murray said the major US confectionery players do not currently have allergen-free SKUs, but could move into the category. However, he said the challenges of an allergen-free facility were a big barrier to entry.
“The trend continues to grow quickly and that’s why we feel we have to operate urgently because they may enter,” he said.
Free2b Foods hopes to engage the community of people affected by food allergies. “We can defend against competition if we build that loyalty,” said Murray.
Chocolate bar range
The company recently expanded its confections range to add chocolate bars.
It has introduced 57 g bars in three flavors: Dark Chocolate Cherries, Sunflower Seeds and Chocolate Crunch, retailing for $3 each.
“We're more competing with Ghirardelli-type brands and Green & Black's,” said the Free2b chief.
Natural and mainstream channels
The firm is exploring multiple distribution channels for its chocolate bars and Sun Cups brand.
“Today's it's a bit more naturally driven but we are starting to expand significantly to retailers like Target,” said Murray.
The company also has sub-sets in Kroger and Ahold and sees further expansion opportunities.
“We feel the line of natural is blurring so we want to expand in both natural and mainstream retail,” said Murray. “We're also pushing alternative channels,” such as GNCs (General Nutrition Centers).
“We still have plenty of white spaces. There’s large traditional food retailers where we have no distribution like Albertsons or places where we just have some SKUs,” he continued.
Free2b Food's Sun Cups retail for $2 for a two-cup pack, while Hershey's Reese's cups sell for around $1.99.
“Our goal is not to match a Reese's Peanut Butter Cup,” said Murray. “We bring a more artisanal approach to the cups we make.”
The company sells dark chocolate, caramel and mint Sun Cups as well as the original chocolate version.
Murray said Free2b Foods’ on-shelf positioning varies widely. Some retailers position its products next to mainstream brands such as Reese’s while others place the items in dedicated premium shelves.
Free2b Foods is currently strongest on the West Coast and US North East, but is exploring export opportunities.
“We’re looking at launching in Canada first,” said Murray. “But need states exist in many countries.”
Free2b Foods hopes to ship products to Canada in the first half of 2017.
“The number one thing we will leverage is that we have a dedicated allergen-free facility – part of my strategy is to not water that down in any way as we expand,” said Murray.
He added that the company had some capacity to expand at its current facility “but it might not be too long until we’ve outgrown it – then we will move”.