Bars get fresh! Perfect Bar founder on bootstrapping, refusing to quit, and creating a completely new snacking category
Today his organic, gluten-free Perfect Bars – packed with whole food powders, organic nut butters, honey, and rice protein - are on sale in 4,000 stores from Sprouts and Whole Foods to Costco, Target, Safeway, 7-Eleven and CrossFit gyms, and Keith is being lauded for creating a completely new category.
But back in 2006/7, a year after he left college to help his father fight cancer and went into business with his brothers and sisters, the future looked pretty uncertain.
At one point, Keith recalls, he was sleeping in his car and showering at the local gym for 30 days straight doing demos at the one Whole Foods store that gave him a chance to prove his 'bar in the fridge' concept had legs.
“I remember being $200,000 in debt and I had 20 credit cards, and we’d come into work saying you know what, today could be our last day," Keith told FoodNavigator-USA. "But we just kept our heads to the grindstone and kept going.
“I’d been working on the concept at business school and I remember my teacher saying you gave a good presentation but a refrigerated bar just doesn’t make sense.”
Buyers were telling us no one will find your bars in the refrigerator
Retail buyers, meanwhile, were equally suspicious of his 'cold-pressed' bars (which have a shelf-life of nine months but have no soy lecithin emulsifiers, so the oils will separate out after a couple of weeks if they are not refrigerated), he said.
“They liked the fact that we used no chemical preservatives, artificial ingredients and emulsifiers, but they were saying your bar would be out of place in the refrigerator and no one will find it. They were also worried about giving up space in the beverages set – were they going to get the volumes they needed [to make it worthwhile]?”
Finally banks were similarly reluctant to part with money to finance a business selling something they thought “just didn’t make sense”, says Keith, who manufactures the bars in-house at a facility in San Diego and is now finalizing plans to move to a new 50,000sq ft facility.
Consumers associate refrigerated goods with freshness: If you buy a Perfect Bar and a smoothie, that’s a great meal for seven bucks
But he refused to give up, and retailers that did give him a chance did not regret stocking the bars (which range from a 23g 100-calorie bar with 5g protein to a 71g, 310-calorie bar with 16g protein), he said.
“We found a way for them to add more SKUs and take up less space with vertical boxes that fit into their beverages sets. We also went in with aggressive promotional campaigns and a huge number of demos.
“And what they started to see was that consumers associate refrigerated goods with freshness; they see our bars next to kombucha and functional beverages, and they see them differently than if they were just sitting in a sea of bars [in the regular, shelf-stable snack bar section]."
The pricing architecture is also a little different in that people will pay more for chilled products, he said. "But it's still great value. If you buy a Perfect Bar – which has a lot of protein - and a smoothie, that’s a great meal for seven bucks.”
We’re the number seven best-selling brand of snack bar in the natural channel nationwide
The fact that other players have now stepped in validates the concept, added Keith, who acknowledged that one high-profile example - Kraft’s MilkBite bars - failed miserably (click HERE), but said he believes this was less about the ‘refrigeration’ factor than the weakness of the product.
“For a long time we were the only people doing this but now I can name four or five other companies in this space.”
Today, said Keith, who is the majority shareholder, with the balance spread between his siblings and outside shareholders that worked for free for the business as sales reps in the early days, “We’re the number seven best-selling brand of snack bar in the natural stores nationwide – which isn’t bad as we’re still have only around 65% distribution in that channel.
“We’ve been more than doubling our growth for the last five years. We grew sales by 120% in 2014 compared with 2013, and we’re profitable. We’re in every channel, there’s a huge opportunity in grocery and we’re getting a lot of interest from overseas. As soon as we get the new facility up and running we’ll be able to say ‘Yes’ to a lot more people that want our product."
Bill Keith’s father - nutritionist and fitness industry pioneer Dr. Bud Keith - created the original Perfect Bar recipe as a healthy snack for his 13 children, who spent much of their childhood traveling the U.S. in a bus-turned-motor home while Dr Keith presented research and lectures on the health benefits of whole food nutrition.
“We’ve also just created a 100-calorie mini bar that goes perfectly with a cup of coffee that Starbucks is looking at right now.”
Next in the pipeline are more 'Perfect' branded products that could sit in the chiller alongside the bars, he said.
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