KANSAS CITY — Putting a new spin on bagels, pancake mixes and pretzels, emerging brands are setting out to shake up sleepy categories with simple formulations and novel flavors and formats. Benefitting from an ability to respond quickly to consumer trends, such start-ups are developing new food and beverage concepts to directly challenge industry stalwarts.
Meanwhile, with the sector’s largest and more mature companies seeking new avenues for growth, many, including General Mills, Kellogg Co., and Campbell Soup, have established venture funds in pursuit of innovation and to avoid the high multiples involved in acquiring businesses later in their development.
Flipping the pancake segment
Among brands carving a niche in pancake mixes are Flapjacked, Westminister, Colo., and Birch Benders, Denver. Flapjacked, a brand of high-protein pancake and muffin mixes, began with one mother’s quest to feed her autistic son, Jace. Jenn Bacon, who co-founded the company with her husband, Dave, began adding protein powder to Jace’s pancakes for a nutritional boost.
“We started looking at the ingredient profiles and realized we were just adding junk to more junk, so I started playing around with cleaner ingredients like coconut flour and quinoa flour and came up with an application that everyone in our family really enjoyed, and that’s how it launched into where we’re at today,” Ms. Bacon said.
Today, Flapjacked products are sold in more than 10,000 retail outlets, including conventional grocery stores, natural food stores and vitamin and supplement shops. The brand offers a range of gluten-free pancake and baking mixes with 20 grams of protein per serving in such flavors as buttermilk, banana hazelnut, cinnamon apple and carrot spice.
The company recently added Mighty Muffin, a line of single-serve, microwavable muffin mixes with 20 grams of protein. Varieties include double chocolate, maple pumpkin, peanut butter, cinnamon apple, chocolate peanut butter and s’mores. The mixes are formulated with GanedenBC30, a patented probiotic that survives the baking process.
“If you walk down the conventional pancake aisle, there is not a healthy option on shelf,” Ms. Bacon said. “There are healthier options; you can buy whole wheat, gluten-free, though gluten-free isn’t always healthy. What we’re trying to do is add a balance of good healthy fats, carbs and protein.”
Bringing better-for-you options to the category was also the mission behind Birch Benders, which recently began offering its premium pancake mixes in larger packaging at a competitive price point for grocery stores in an effort to compete with Aunt Jemima, Bisquick and Krusteaz.
“These old brands that have been around forever have had very little innovation, so we think we can steal customers away from them by offering better quality ingredients, better tasting recipes, more convenience, at a very similar price point,” said Matt LaCasse, co-founder and chief
executive officer of Birch Benders. “Our goal is to steal a lot of those customers away and focus on dominating the pancake category before moving on to other baking mixes.”
Birch Benders already has established a firm foothold in natural retailers, generating strong triple-digit or quadruple-digit growth in the past three years. The company offers nine organic varieties of pancake and waffle mixes, including classic, protein, gluten-free, paleo, chocolate chip, six-grain cinnamon, pumpkin spice, gingerbread spice and double chocolate peppermint.
“I think that was the most important part about our start-up, just getting out there and testing it and seeing what people want and like, and once you hit that traction, that’s when you can put your foot to the pedal,” Mr. LaCasse said. “Unless you really have that product market fit, putting your foot to the pedal will just result in a lot of wasted dollars.”
For now, the company will continue to focus on pancake and waffle mixes, where Mr. LaCasse sees little innovation and “so much runway.”
“Obviously, the on-the-go breakfast trend is really hot and really great,” Mr. LaCasse said, “but we think that people will never really leave the breakfast table completely.”