Grupo Bimbo makes minority investment in allergy-friendly Rule Breaker Snacks

By Mary Ellen Shoup contact

- Last updated on GMT

Backed by Bimbo Ventures, Rule Breaker Snacks is poised for widespread retail growth, says founder Nancy Kalish. Photo: Rule Breaker Snacks
Backed by Bimbo Ventures, Rule Breaker Snacks is poised for widespread retail growth, says founder Nancy Kalish. Photo: Rule Breaker Snacks

Related tags: Rule Breaker Snacks, Grupo bimbo

Rule Breaker Snacks, an allergy-friendly snack brand featuring chickpeas as its star ingredient, has secured a minority investment from Bimbo Ventures, the venture capital arm of global baking company Grupo Bimbo.

Founded in 2015 by Nancy Kalish, a health coach and former health journalist, Rule Breaker Snacks​ is entering an exciting period of accelerated growth,  and the investment from Bimbo Ventures (its first source of external funding aside from a fully-subscribed Kickstarter campaign completed last year) will help support its next chapter of brand building, she said.

For Bimbo Ventures, Rule Breaker Snacks is the company's first US-based investment since it launched its 'Bimbo Eleva' venture arm​ in 2017.

"It’s not just money, but it's their expertise. They’re there to help with everything and they’re really going to be great partners,"​ Kalish told FoodNavigator-USA.

While the brand hasn't faced any entirely unmanageable issues Kalish and her team couldn't problem solve on their own, there are certain perks to being backed by a global food company, said Kalish.

"For a small brand, we’re down the list when it comes to ingredient sourcing. We don’t necessarily get priority or the best prices. We also have certain pack sizes that are very popular with consumers, but we’re not producing them yet in an optimal way... so, Bimbo will be helping us with stuff like that, and I feel honestly that I can really turn to them for all kinds of good advice,"​ she said.

RuleBreaker_founder
Rule Breaker Snacks founder Nancy Kalish

Kalish added that the partnership will give her and her team an opportunity to focus on more "high-level"​ planning such as brand building and marketing strategy, and less time spent putting out the daily barrage of small fires (e.g. a delivery truck not showing up when it's supposed to, or a piece of equipment breaking down) that come with running a growing company.

RuleBreakerLifestyle7227 (1)

Rule Breaker products feature chickpeas (chickpea flour) as the first ingredient and are sweetened with date paste. The cookies are soft-baked and have a 12-month ambient shelf life, said Kalish.

The products are currently available in both singles and 'Bites' formats and come in four flavors: deep chocolate brownie, chocolate chunk blondie, birthday cake blondie, and (nut-free) p'nutter chocolate chip blondie.

Customer feedback led the brand to produce its Bites format, which has been a big success for the company, noted Kalish.

"That item has particularly taken off,"​ she said. "We had gotten a lot of requests from parents who felt that our cookies were a little on the big side for their kids, especially young kids."

The company also recently introduced its first limited edition seasonal flavor to the portfolio, mint chocolate brownie bites.

Supporting growth

Rule Breaker Snacks are available in over 2,500 retail locations nationwide including a 1,600-store rollout (following a successful 250-store test) to Kroger stores across the US and new distribution with Jewel-Osco and Hy-Vee.

"We have literally quadrupled our store count​ [in the last year]. We want to make sure we are supporting those retailers, and that we are driving velocity,"​ she said. 

And an appearance on Shark Tank last week also sent online sales soaring (despite the fact that the brand did not get a deal).

"We did about four months worth of sales in one week,"​ she said. 

This 'Shark Tank effect' highlighted the need for an even stronger DTC strategy across its company website and on Amazon, noted Kalish who wants online sales to account for a larger percentage of the business. 

"We have a pretty high repeat customer rate on both Amazon and our website. I have to believe that some of those Shark Tank orders are going to stay with us and come back and order some more," ​she said. 

RuleBreaker_brownie

"It’s wonderful being able to give kids [with food allergies] something they normally can’t really enjoy," Kalish said. 

The allergen-friendly category, far from niche

The allergen-friendly snacks category has expanded beyond concerned and vigilant parents of kids with food allergies (although this represents a large consumer base as food allergies among children have grown 4% annually since 1997) and adult consumers managing allergies and diet sensitivities.

According to McKinsey & Company market research​, the allergy-avoidant consumer market spends around $19bn a year on products that meet their dietary needs. 

Outside of consumers who either have or are shopping for someone who has a diagnosed food allergy (which represents 85 million consumers), an additional 75 million consumers report avoiding one of top nine food allergens as a personal lifestyle preference, according to McKinsey research.

And smaller brands seem to have a leg up in gaining consumers' share of wallet, said the firm. Its survey results show that 68% of allergen-avoidant consumers tend to trust smaller and allergy-friendly brands more than larger brands. 

These findings jibe with what Kalish has found as a small brand owner catering to allergy-avoidant consumers. 

For Rule Breaker, its audience can be broken down into two main groups: consumers buying products for someone in their household with a food allergy and a secondary group of consumers that want to eat a little better with a plant-based alternative to their favorite cookie or brownie. Kalish also finds that answering customer emails and inquiries directly about the products goes a long way in building consumer trust and loyalty (something a large food company can't necessarily do as easily).

The brand's focus in 2021 will be to drive not only repeat purchases with its core audience but to expose more consumers to Rule Breaker Snacks, said Kalish

"I know that there are a lot of people, especially those with allergies, who would really love Rule Breaker,"​ added Kalish.

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