Michigan food incubator bets big on protein for confectionery startups’ growth

President and founder of the Michigan-based company, Chris Mattina, said he is currently testing his first line of branded protein confectionery products in the UK and Ireland. Once the concept is proven, he will launch them in the US.

Rainmaker was founded two-and-a-half years ago based on a common challenge facing confectionery entrepreneurs – health and wellness-focused consumers are drifting away from the category towards snacks, according to Mattina.

Big companies shut candy startups out

What makes the road more difficult for small candy brands is companies like Hershey and Mars are actively acquiring or investing in high-growth snack segments such as popcorn, meat snacks and nutrition bars, said Mattina.

“There are small entrepreneurs that have great ideas and don’t have the opportunity to get their products into the market… and large companies are just shutting them out,”​ he said.

However, that does not mean chocolate and candy startups are doomed, said Mattina. The consumer trend towards better-for-you snacks gives confections made with functional ingredients an opportunity to scoop up share in the health and wellness market.

“So I started Rainmaker to build up smaller brands for them to scale. We work with them from package design through to manufacturing,”​ he said. “We also just opened a warehouse, located in Wisconsin, just over the Illinois border, where we can bring those brands in and cut their logistic costs.”​

Mattina added Rainmaker helps seek funding for its partnered brands from a network of private equity firms and individual investors, and the company itself will reinvest in some of its brands in the future.

“The trick is to make sure we align the investment with the missions of their brands so that these entrepreneurs’ dreams are not shattered by someone coming in and taking over their companies and minimalizing their vision,”​ he said. 

‘We only target the better-for-you space…’

The majority of Rainmaker’s portfolio is made up of confectionery brands including Sugarpova and Sulpice – both companies use nuts or protein as a functional ingredient to give consumers an energy boost, according to Mattina.

“Certainly high fructose syrup has no place in our world because we only target the better-for-you space, so we’re very deliberate about choosing the brands that we think are valuable,”​ he said.

“When we took on the Sugarpova brand for example (founded by Russian tennis player Maria Sharapova), the first thing we did was cleaning up the product ingredients, then we moved its manufacturing to the US from Europe… we’re also going to move all of its gummy manufacturing lines from Spain to the US.”​

As for the Chicago-based artisan chocolatier Sulpice, Mattina said its latest peanut butter bites range, which contain seven grams of protein, three grams of fiber, and chia and flax seeds for omega-3 benefits, can help the company compete well within the confectionery market.

“We reduced Sulpice’s sugar content by 40% and blasted it on the front of its packages to look more disruptive on shelf,”​ he said. “We’ll introduce these new products at the KeHe Holiday show in June and they will be available to the US mass market in July this year.”​

Mattina said Rainmaker currently generates its revenue primarily through assessing a monthly retainer fee of these confectionery companies, as well as the commission of sales against their products.

“We are also looking to work with protein drinks and bars to expand our company,”​ he said.