Dang, that’s good! An entrepreneur’s guide to carving a niche in the healthy snacks market

By Elaine Watson contact

- Last updated on GMT

Dang Foods founder Vincent Kitirattragarn: "When we’re on shelf next to other coconut chips, we outsell them..."
Dang Foods founder Vincent Kitirattragarn: "When we’re on shelf next to other coconut chips, we outsell them..."

Related tags: Entrepreneurship

A great product, deep pockets, and entrepreneurial zeal are critical to the success of any food start-up, but there’s always an element of luck, says Dang Foods’ founder Vincent Kitirattragarn, who impressed his first major customer with his toasted coconut chips via a chance encounter at a trade show in 2011, launched his first products in 2012, and is on course to generate revenues topping $8m in 2015. 

I was at the Summer Fancy Food Show in DC in 2011, but I didn’t have a booth, so I was just walking around handing out samples guerilla-style, and the first person I spoke to turned out to be a Whole Foods buyer,”​ he told FoodNavigator-USA.

“I found out later that some buyers really don’t like this approach, but I just got lucky,” ​added Kitirattragarn, who has his ‘Eureka’ moment when his mother passed on a recipe for Thai lettuce wraps and the toasted coconut chips in them tasted so good he ditched the lettuce and started building a snack foods empire.

“We did just over $4m last year and this year we’re looking to do north of $8m."

When we’re on shelf next to other coconut chips, we outsell them

Unlike many food entrepreneurs, who spend years proving themselves in the natural channel before they attract the attention of conventional retailers, Kitirattragarn got his foot in the door of some big names early on, and his wares are now available in 6,000+ stores from Target to Safeway, as well as natural chains such as Whole Foods and Sprouts.

“Natural retailers are interested in the story and environmental attributes, whereas in the conventional channel they also want evidence that you've proved yourself in other channels, and we have that now.We’ve also got data showing that when we’re on shelf next to other coconut chips, we outsell them.

“For example, if you go to Sprout's, there's five different coconut chips in the same spot. But we’ve just got some data back showing that we performed 30% better than the second chip,” ​added Kitirattragarn, who is based in Berkeley, California, and sources, processes and packages his snacks in Thailand.

As for routes to market, he says he's still barely scratching the surface, with growth opportunities in club stores, drugstores, convenience stores, schools, college campuses and corporate offices all being actively explored.  

Dang Foods snacks
Dang Foods slices meat out of mature coconuts then gently toasts them, which brings out the natural sweetness of the coconut meat and turns it from white to a golden brown, creating a “buttery umami flavor” that founder Vincent Kitirattragarn says is a healthy alternative to fried chips. Fans also use the chips as a topping ice cream, yogurt, salads, oatmeal and baked goods.

We were piggybacking on the popularity of coconut water and oil

But why have his chips been such a hit right out of the gate?

While retail buyers were looking for simple, tasty and healthy snacks when he first started pitching his products, said Kitirattragarn, his timing was also good as coconut oil and coconut water were gaining popularity.

“Coconut was really trending up and we were piggybacking on the popularity of coconut water and oil and targeting retailers that were selling a lot of these products. But instead of selling them in the bakery aisle, we were selling them in the healthy snacks section by kale chips and fruits and nuts.”

It can be treacherous if you don’t know what you’re doing

Getting into the grocery channel is tricky and expensive, he said, while importing the product from Thailand means he’s also got a lot of working capital tied up in inventory that’s traveling across the Pacific. However, he has good gross margins and runs a very tight ship, so has so far not had to seek any outside capital, relying on his own savings, friends and family and a small business loan.

 “The cost of doing business is just crazy and it can be treacherous if you don’t know what you’re getting into,"​ he said. "People say if you manage to break even, you’re doing good.

“But I’ve taken a lot of advice from people that have done this before,” ​said Kitirattragarn, who has a degree in biological engineering and a masters in management from Cornell, and moved into sustainability research before venturing into the food industry.

His first full time member of staff was his brother Andrew, who has a background in accounting, said Kitirattragarn. “We were only about six months in and Safeway gave us a call and said they wanted us and I realized I needed his help. Next I brought in an operations person, and in this past three months we've hired two sales people, but we’re still looking for a marketing person.”

The Dang Brothers landscape
Andrew and Vincent Kitirattragarn

Consumers are looking for authenticity

So what’s next? 

“At the beginning I didn't really think, let's make this into a big enterprise,” ​he said.

“I kinda just wanted to work for myself. And then as it grew, I realized there's a good opportunity here to create a platform brand that I can launch other products with, so next year we’re going to launch something similarly disruptive and innovative. But it's not gonna be a coconut based chip…

So with our next product line, without going into too much detail, we’ll be competing with some of the biggest companies in America, so it’s going to be a David vs Goliath situation, but people are looking to eat healthy, eat whole foods, and they are looking or authenticity, and we can bring that to the table in a way that a lot of big established foods brands cannot.”

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