Warady - who left his position as general manager at allergy-friendly brand Enjoy Life Foods (acquired by Mondelez in 2015) late last year to become a strategic advisor to several startups including Catalina Snacks, said:
"I have had the good fortune of working closely with Catalina's visionary CEO and founder, Krishna Kaliannan, since he first shared the business plan with me pre-launch. Having gained expertise in 'special diet' and healthy-eating lifestyles during my 18-year involvement with Enjoy Life Foods, I'm always on the lookout for companies that have the products and positioning that can yield similar success. Catalina Snacks is well-positioned to be the market leader of the keto-friendly foods category."
He added: “The growth in our velocities and the acceptance of our additional SKUs is accelerating top-line revenues faster than anticipated."
Rapid growth
Founded in 2017 by Kaliannan, who was diagnosed with diabetes and epilepsy as a senior in high school and put on a keto diet (which is sometimes recommended to people with certain types of seizures), Catalina Crunch cereal was a hit right out of the gate when it launched in 2018, generating online revenues of almost a million dollars a month just a year later.
The brand – which has since expanded its product range with keto-friendly sandwich cookies (launched online in the spring and now shipping to retail stores) and shelf-stable smoothie kits (launched online in January 2020 and now shipping to retail stores) launched its cereals in bricks and mortar stores last October and is now available in 5,000 stores nationwide from Whole Foods and Sprouts to Hy-Vee, Wegmans, and Albertsons.
‘We launch everything online first to see how it performs’
Speaking to FoodNavigator-USA last month, Kaliannan said: “We launch everything online first to see how it performs and if it does well and gets good reviews we’ll start to explore retail opportunities as well. With the cookies, I thought we had roughly 30 days of inventory when we launched [direct to consumer], and we sold out within 15 hours.”
He added: “We are able to leverage data and insights from the direct to consumer business to help with our retail launch, so it’s helped us better understand what areas of the country are hotspots and understand who our target consumer is.”
Keto: Some folks are really hardcore… others are looking to cut down on empty carbs
Asked about the potential for food companies to tap into the high fat, moderate protein, ultra-low carb keto diet, he explained:
“There are folks that are very hardcore about it, and constantly tracking themselves, and then there are other folks that are looking to cut down on empty carbs but are not trying to maintain a state of ketosis [where they burn fat rather than sugar] 24:7, 365 days a year; we're targeting both.”
‘We’re hoping to end the year with revenues between $20-$25m’
Like fellow cereal startup Magic Spoon, Catalina has attracted new consumers during the pandemic and seen existing customers spend more as more people are now at home at breakfast time, said Kaliannan, who is planning to launch a new product line in January 2021.
“We’re getting close to [a run rate of] $2m a month, and we’re hoping to end the year with revenues between $20-$25m."
Catalina Snacks keto-friendly dark chocolate cereal contains 8g protein, 7g fiber, 0g added sugars, and 90 calories per 26g serving.
Ingredients: Catalina flour (organic pea protein, potato fiber, non GMO corn fiber, chicory fiber, acacia fiber, guar gum, turmeric), tapioca, organic high oleic sunflower oil, baking powder, natural flavors, sea salt, calcium carbonate, vitamin E, organic monk fruit, cocoa.