Summer Fancy Food Show 2018 - market investment
More than healthy and protein snacks: Halen Brands’ new creation sends hope to indulgent chocolate startups
Jason Cohen, the CEO and founder of the food venture, told ConfectioneryNews that Joyfuls was created because people tend to treat themselves with indulgent confections, but they would also like to count how many calories they have.
“This is a brand new fairtrade and non-GMO chocolate made with 60% cocoa, and we bought special equipment to put all the inclusions, fruit and nuts, on top to make it more like a mendiant, which is a popular treat in French chocolatiers and shops,” he said.
“What we are doing is taking the high-end concept and making it an individually-packed portion control item. It is also certified gluten-free and high in antioxidants.”
Joyfuls currently comes in three flavors: dark chocolate with currants, pumpkin seeds and pink Himalayan salt; dark chocolate with cranberries, almonds and pink Himalayan salt; and dark chocolate with coconut, almonds and pink Himalayan salt.
Cohen noted that, unlike some sharable products that are not hygienic to share due to their packaging, Joyfuls chocolates are individually wrapped within a bag, making them easier to carry and share.
He said all of these products were initially launched in natural and specialty stores across the US for testing three months ago, and they will be available soon in mass retailers, including Costco.
Joyfuls is expected to generate $3m to $5m in revenue in its first year, added Cohen.
Entrepreneurs need to be cognizant for product development
In an era when the food industry is creating more health-focused snacks, Cohen suggested that confectionery startups still have an opportunity to get attention from investors and big companies.
The key is “entrepreneurs need to be cognizant for what they are doing – if it’s not working, fix it,” he said. That’s what Halen Brands learned during its creation of Joyfuls.
Cohen noted Halen Brands first came up with a chocolate brand that missed its target consumer because it had too much of “a male-forward packaging.”
“We learned a lot in the last two years and redesigned our products to make them more female-focused and provide more of an upscale experience. So this is a successful second launch,” he said.
It is noted that Joyfuls is one of Halen Brands’ internal brands. The company has also invested in some external ones, such as SkinnyPop that was later acquired by Hershey.
Cohen explained the mindset behind creating brands internally or acquiring other companies depends on their own management teams.
“Some of these are new entrepreneurs, who haven’t been in the food industry before, who really need our skills and expertise, our roadmap of mistakes and knowledge of how we figure things out,” he said. “There are other serial entrepreneurs who respect what we do and want us to be their advisors who make strategic decisions and investment.”
Large companies need to build a culture, not quarterly sales
Even though food startups may seem attractive, Cohen warned that large companies that rush to acquire them to achieve instant fast growth might face trouble later on.
“There were some big acquisitions last year… but those big companies need to find a way to bring in new infrastructure and new brands created to build around that consumer that they don’t currently have,” he said. “It’s really hard to bring the consumer into a brand they don’t have experience with.
“For example, after acquiring RXBar, Kellogg needs to be transparent about how it is going run and move the business forward because keeping the founder within their company is more important than keeping the brand… The consumer follows founders [of those brands] like how they follow LeBron James. Once they lose that connection, they lose their brands,” added Cohen.
However, he noted big companies are sometimes forced to tap into fast-growing categories.
“It’s the pressure of being a public company: They are expected to have growth rates and expansion, thus they are trying to prove out big acquisitions too soon. But it eventually hurts the integrity of what they buy,” said Cohen.
He added: “It’s more of an important mindset of letting Wall Street and your shareholders know that you bought something for the long term, such as building a culture, rather than just building quarterly sales.”