Launching a brand into a stagnant category such as sauerkraut took some imagination and foresight, said Cleveland Kitchen co-founders Drew and Mac Anderson and Luke Visnic.
"We like to talk about our sauerkraut as more of a fermented, fresh vegetable... Really it’s about re-framing what sauerkraut is, and we’ve released a product that’s crunchy, delicious, and fresh -- the way it's supposed to be," Drew Anderson told FoodNavigator-USA. Drew added that the brand has always led with taste over function, launching multiple flavors including classic caraway, beet red, gnar gnar ('Cleveland's answer to kimchi, according to the brand), curry kraut, roasted garlic, and whiskey dill.
"We’ve really been energizing not only the fermented sauerkraut space, but really picking up and growing the category," said co-founder and chief marketing officer, Mac Anderson.
Its operating facility has grown from 5,000 square feet of space to 30,000 square feet producing 2 million lbs of sauerkraut last year, according to Visnic.
No.1 brand in refrigerated sauerkraut
While still a small, niche, the refrigerated sauerkraut category is up 30% year-over-year over the last 24 weeks, according to Mac Anderson. "And Cleveland Kraut is directly responsible for 95% of that total growth," he said.
"We’ve been driving a lot of growth of the category, expanding those usage occasions, and really bringing consumers into the category."
In terms of key distribution pickups Cleveland Kitchen has gone national with Sprouts, and launched into Publix.
"We continue to grow our distribution with Target. Walmart now has us in 1,600 doors and we will continue to expand that. We’re in 600 Kroger stores right now, and we’re in talks with them to expand nationwide this year," said Mac Anderson.
"We have continue to press forward with the Aholds, the Stop & Shops of the world. We’re starting to pick up several Safeway & Albertsons divisions."
New purpose for kraut juice
With its large production scale, Cleveland Kitchen was left with loads of kraut juice that its founders knew could be used for another value-added product.
"As we were looking to product expansion, of course we had seen what Farmhouse Culture and Wildbrine had started to do with their gut shot, which is basically upcycled kraut juice... so we bottled up our kraut juice and took it to where we grew up, at the farmers' markets where we do our product tests," said Mac.
Consumers loved the product, according to the co-founders, but were asking how they could incorporate it into their day to day, which is when Mac suggested it as a component to a healthy vinaigrette.
"That was kind of our 'aha' moment when I saw the shoppers' eyes light up," he said.
"We did a deep dive into the [refrigerated dressing and marinades] category, and it turns out people want something that’s functional, that’s delicious, new, and exciting. And they’re willing to pay more for it -- that's our customer all day long," added Drew.
After roughly a year and half of R&D, while still participating as part of Kraft Heinz Springboard accelerator program, Cleveland Kitchen launched a complete line of plant-based, dairy-free, fermented dressings and marinades that will sit in the refrigerated dressing section of produce sections in most retail customers. The line of dressings and marinades include Hail Caesar, Sweet Beet, Roasted Garlic, and Gnarly Miso Jalapeno (available July 2020).
"It's a much larger category for us to play in and go head to head with some very big players and we're tremendously excited about the challenge," Mac added.