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Umpqua Oats on course to double revenues this year as consumers trade up in the hot cereal aisle

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By Elaine Watson+

30-Aug-2017
Last updated on 30-Aug-2017 at 16:40 GMT2017-08-30T16:40:06Z

Umpqua Oats revenues on course to double this year

Umpqua Oats is on course to double revenues this year after expanding beyond oatmeal cups – a category it pioneered in the specialty coffee shop market – into multipacks of oatmeal sachets and organic cups as it ramps up its presence in grocery stores.

Henderson, Nevada-based Umpqua  - which was launched in 2008 by self-described soccer moms Mandy Holborow and Sheri Price – made its name with oatmeal made from custom-milled whole grain oats that take four minutes to cook in the cup and have a distinctive thick and chewy ‘al dente’ texture.

The brand – which debuted in the coffee shop market – has since built a presence in around 6,000 grocery stores from Safeway to Kroger and Whole Foods, plus Costco, airports, college campuses, fitness centers, corporate offices and micro markets, Holborow told FoodNavigator-USA.

It’s also dedicating resources to working with Amazon, she added: “We’ve always had distributors selling our products on Amazon, but we just hired a new Amazon broker, because I think this channel has huge growth potential for us.”

Incremental growth to the category

She said: “Our growth has been tremendous; we’re hoping to double by the end of this year over last year. Right now our distribution is still strongest in the northwest [the brand began in Roseburg, Oregon] but we’re really focused this year on growing grocery sales in the east coast and hitting foodservice really hard. We’ve also been offering deep discounts in stores to encourage trial when we launch.  

“What retailers like about us is that we can show that we are generating incremental growth, we’re bringing new consumers into the category. The key age group buying our products is 22-44 years, which is a younger demographic for the [hot oat cereal] category.”

We don’t cut corners

She added: “Retailers also like the fact that our product is distinctive, we don’t cut corners, it’s not mushy like the instant oatmeal and there’s no fillers, colors, gums and manufactured flavorings, no wheat flour or barley flour added for weight.

“When we go into sales meetings, we bring paper plates and we pour out competitor products next to ours dry and before they even taste it, they can see which one is the better product. Our oats have not been bleached, they are a whole rolled thick oat, not a smaller instant oat.”

Mandy Holborow (left) and Sheri Price (right): 'Once we got to about $2m in revenue we looked at each other and realized this is not a hobby anymore'

Organic options

The organic cups – which Umpqua has deliberately priced at a fairly small premium to its regular products in order to encourage trial – are performing well, she added:

What’s interesting is that when we first developed them, we thought they would go into stores that have separate natural and organic sections, but a lot of retailers are putting our regular and organic SKUs side by side in the conventional aisle."

Right now, Umpqua’s products are co-packed by Honeyville Inc in Rancho Cucamonga, east of LA, while the oats are rolled in Utah. However, co-packing will shift to a new manufacturing facility Honeyville is building in Ogden, Utah, this year, she said.

“It makes sense to bring both parts of the operation to Utah.”

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