CORE Nutrition was sold to Keurig Dr. Pepper late last year for US$525m.
CORE Foods, initially founded in 2010 in California, specialized in oat-based meal replacement bars, but its old products are being phased out in favor of newly-developed probiotic and fiber-rich refrigerated products set to launch next month.
Made with gluten-free oats, the functional CORE bars come in six flavor variants, including peanut butter chocolate and lemon poppy seed, and will be available nationwide across Whole Foods and Amazon and some regional retailers.
'I had seller's remorse...'
Lance Collins, CEO of CORE Foods, said the acquisition of the snack firm in October last year came about just weeks ahead of the closing of the deal to sell CORE Nutrition to Keurig Dr. Pepper.
“I had seller's remorse because I loved the CORE trademark. So, we had to buy the food company because we wanted to continue the legacy,” Collins told FoodNavigator-USA. “We bought this sleepy little bar company and, you know, with our marketing muscle and our distribution muscle we feel we can compete with some of the big boys because we're very well-capitalized.”
CORE Foods was funded by money from his last four company exits, he said.“We call it the bank of Lance Collins; it's from Fuze, NOS, Body Armor, Core Nutrition – a plethora of great innovations and exits.”
Asked if the goal is to eventually sell CORE Foods as well, he said: “We're going to be in it for at least four or five years, then we'll see how big we are before we start talking about other avenues.”
Collins said that while it is hard to make solid growth projections on any new venture, the goal is to establish a $100m brand within a minimum of four years.
Brett Hartmann, chief marketing and innovation officer at CORE Foods, said that goal was realistic.
“If you look at the shelf-stable bar category, that barely scratches the top ten; it's not a crazy number. And certainly, Lance's track record would suggest it's do-able based on the timeline and size of other businesses he's scaled up,” Hartmann said.
Ahead of the sale to Keurig Dr. Pepper, CORE Nutrition had grown at an annualized rate of around 115% and secured retail sales in excess of $200m in the year prior, according to figures released at the time.
To affinity and beyond...
Collins said while CORE Foods was his first venture outside of beverages, he remained confident in growing the company and un-phased by the competition.
“Every brand in consumer packaged goods has challenges. It's fiercely competitive and the percentage of winners is very, very minute. But I think I have a pretty good track record in beverages that can translate into food and healthy snacking and I'm looking forward to that opportunity because I seem to defy the odds.”
One aspect behind the challenge in growing CORE Foods, he said, would be drawing consumers into fresh snacking, although smart marketing pair-ups could help that.
“I have a very good relationship with Keurig Dr. Pepper and we're going to have what's called an affinity program with CORE Water and the bars,” he said, where discounts would be given where the bars and beverages are bought together.
“We're going to be actively pursuing that kind of stuff throughout grocery and convenience.”
However, Hartmann said the program with Keurig Dr. Pepper would not be a license pair up and CORE Foods remained a totally separate company. While affinity programs would certainly give the brand a boost, he said the product itself hit on a number of important trends.
“There's two megatrends going on within the supermarket and that is the growth of the fresh space around the perimeter and then the growth of snacking. And so, this product really is the intersection of those two megatrends – fresh and snacking.”
The bar also hit on other trends, including oats, gut health and better-for-you snacking, he said.
According to Mintel, the fresh snacking category in the US grew 8% in the 52 weeks ending April 22, last year vs previous years.
Retailers and coffee shops
But how will CORE Foods remain competitive?
“In the case of where we are in fresh snacking, there are some products that lean much more heavily into things like protein, and that's not what we're doing,” said Hartmann.
“We believe we're offering unique consumer benefits to shoppers, to the retailers, that are not currently being offered within the fresh snacking space. And that's about the probiotics and no sugar added and, again, the kind of balanced nutrition that leads to a happy core.”
Over the next year, CORE Foods will launch additional bar variants to its line and then next year expand into alternative product categories. The company will also look to eventually secure nationwide coffee shop listings.
“This is single-serve, portable snacking," said Hartmann. "It works very well in coffee shops and convenience stores and anywhere single-serve beverages are sold and that's how Lance has built his career – there's a lot of similarities in terms of go-to-market strategies."