One company that appears to have nailed it is Los Angeles-based YouBar, which has built a hugely successful ‘build-your-own-nutrition-bar’ business that gives its clients exactly what they want. It has no minimum order quantities (unlike most contract manufacturers), and still turns a healthy profit.
The brainchild of Anthony Flynn – co-author of The New York Times bestseller Custom Nation – YouBar was originally envisaged in 2006 as a b2c online operation making it easy for consumers to create their own bars for events… or just for the thrill of having a bar with their name on it… just as Customink enables you to create your own tee-shirt for your sports team, or Walmart lets you print a mug with your holiday snaps on.
But as the orders started coming in, said Flynn, it quickly became apparent that the real business opportunity was in the b2b market, serving the needs of a growing number of enterprising entrepreneurs looking to build a brand, from Mommy bloggers, event managers, wedding planners, crossfit gym owners, coffee shops and personal trainers; to high-profile TV personalities, diet book authors, celebrity dietitians, and fitness gurus building their own branded goods empires.
“We were getting these orders for 10,000 bars and 50,000 bars, and we realized we were onto something. And nine years on we’re still growing at an incredible rate; we doubled in size last year and expect to do the same this year.”
We handle everything
What makes YouBar special, however, is the one-stop-shop nature of its proposition. It’s not just a flexible co-manufacturer; it’s a partner, product developer, designer, marketer, branding expert and online retail expert rolled into one says Flynn, who caught up with FoodNavigator-USA after delivering a presentation at the Flavors & Extract Manufacturers Association (FEMA) fall symposium in New Jersey this month.
“We handle everything, including custom recipe development, custom package design – plus advice on what you can and can’t say from a regulatory perspective, display box design, in-house on-demand bar/shake production, package production and drop-ship fulfilment, so if you are selling online and don’t want to handle your own inventory, we can integrate into the back end of your website and handle your online orders for you.
“Whether you want 1,000 bars or 100,000 bars, we can do it. And we can help with everything from website design to marketing materials for our clients, because if our clients do well, we do well.”
YouBar also offers pilot trials of prototype bars to ensure the manufacturing/industrial feasibility of your recipe/formula, organoleptic testing, nutritional analysis, and water activity level testing to ensure shelf life stability, said Flynn, who also works with several small companies that are selling their wares into retailers such as Whole Foods, as well as through their websites or other channels.
“We makes things very easy for our clients, and they can offer their end customers bars that are unique, and packed with high quality ingredients, at a lower price than what you’d pay in a store, because they are not going through wholesalers, distributors and retailers that mark up the bars considerably.”
Our model from the start relied on being able to make a profit from a single box of bars
But if a contract manufacturer won’t get out of bed in the morning for an order short of 50,000 bars, how come YouBar is able to do it, and still make money?
Because it has a different cost structure, said Flynn: “Our model from the start relied on being able to make a profit from a single box of bars. We have a lot of custom equipment that allows us to do runs that are faster to set up, and quicker to clean. We are also extremely good at avoiding waste, so we’ll lose far fewer packages when setting up a full custom line than the industry standard.”
And as the company’s expertise has grown over the years (if all you do is make bars – using every kind of ingredient imaginable, you get a pretty comprehensive understanding of what is and isn’t possible/tasty/viable) it has also been able to help clients build bars with the ingredients and nutritional profile they want, but within parameters that make sense.
Our process has become extremely streamlined
So you’ll typically start with a base (eg. cashew butter, dates, vanilla extract), then add protein (eg. hemp), then add nuts or seeds (eg. cashews and chia), dried fruits (eg. cherries), sweeteners (eg. agave), seasonings (eg. cacao nibs, ginger), grains/cereals (eg. quinoa crispies), and then perhaps an infusion (eg. green tea, spirulina, chlorella). However, if you have your heart set on cricket powder, acai berries, or algae protein, you can do it with YouBar, he said.
“We develop so many recipes that our process has become extremely streamlined, and we can also determine instantly what changes will be required on pack in terms of allergen information and the Nutrition Facts panel every time you make a change to a recipe, and we know what changes we’ll need to make to our manufacturing process when we make recipe adjustments – we know how the bars will run through the various pieces of equipment, what settings to use.
“In other words, we’re not going in blind each time and wasting hundreds of pounds worth of product to get things right. As we’ve now got some very high volumes when you put all of our clients together, we’re also able to make procurement savings on things like packaging materials and ingredients, even though we are making custom products.”
So what’s trending when it comes to ingredients his clients are choosing? On the protein side, whey protein isolate remains the gold standard protein, he says, but more customers are now asking for pea, hemp, and rice protein, while cranberry protein powders are also gaining traction. He’s also had requests for cricket protein, beef protein powders and egg white protein.
So what’s next?
More of the same in the short term he says, given the growth the business is currently experiencing, but in future he’s looking at applying the same approach YouBar has applied to bars to protein powders and shakes.