Exclusive interview

Kellogg to enable RXBar to expand into new food categories

By Douglas Yu

- Last updated on GMT

Related tags Venture capital

RXBar’s CEO Peter Rahal said the company has plans to expand beyond the nutrition bar category and enter the UK market soon, thank to Kellogg's $600m acquisition in October last year.

BakeyrandSnacks caught up with Rahal and Glenn Pappalardo, the RXBar engagement lead for Kellogg, at Hatchery Chicago, “Raising the Bar on Acquisitions," ​to find out how the partnership is progressing.

“Not too much has changed ... it has only been three months [since the acquisition,]" ​said Rahal.

"We are operating our business in Chicago the same way as we were. Our growth had already been baked in essentially prior to the deal.

“We view RXBar as a platform for other food categories and will be launching new forms beyond bars soon. Kellogg is going to help us,” ​he added.

Rahal said new RXbar products - which will be unveiled at Expo West (to be held in Anaheim, California, from March 8 to 11) - will deliver the same “convenience, brand fee, and nutrition. It’s not a line extension of bars.”

Helping Kellogg expand

He added the advantages of partnering with Kellogg include access to technical expertise, R&D, legal counsel and knowledge of international regulations.

“As an [small] entrepreneur, you don’t have these resources. [There is also] guidance and leadership.”

Kellogg's decision to shift its entire snack business in North America from direct store delivery (DSD) to warehouse distribution​ ​about a year ago has not affected RXBar’s business, Rahal told BakeryandSnacks.

“For us, we are warehouse business, too, just because that’s what the whole bar category is,”​ he said.

He contented RXBar could help Kellogg expand in the natural channel.

“The partnership with Kellogg down the road is all about seeking growth. Right now, we want to operate as a standalone business and leverage their expertise,”​ he said.

US nutrition bar category

The US nutrition bar category is as “dynamic”​ as it was four years ago when RXBar entered the market, and continues to see new ingredients and innovation, said Rahal.

“Our biggest competition is someone [new] coming to the market… We position ourselves as a clean-label protein bar. We use minimal ingredients and we’re pretty candid about what we make.​ 

“The thing about the bar space is its entry barrier is very low. [That’s why] we have to stay innovative and stay on top of our customers in terms of what they need.”

According to Rahal, the company is expected to grow between 200% to 300% in revenue in 2018.

Calling on startups

If you are a food startup or entrepreneur seeking investment by companies like Kellogg, stay tuned to this site.

BakeryandSnacks will be examining what qualifications are needed to catch Kellogg’s attention and on how to secure an investment from its venture capital fund, eighteen94.

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