$4 billion snack maker Kind says it will spend 'tens of millions of dollars more' to market its new frozen and refrigerated products, and hit $1.6 billion in sales in 2020
- Granola bar-maker Kind is launching its biggest expansion to date, expanding to frozen bars, refrigerated nut-butter bars and snacking chocolate clusters.
- The move comes on the heels of Kind acquiring North Carolina-based Creative Snacks, and confectionary giant and M&M's and Snickers maker Mars buying a minority stake in the company in 2019.
- The company plans to spend "tens of millions of dollars more" to market each product throughout the year and will hit $1.6 billion in sales in 2020, founder and chairman Daniel Lubetzky told Business Insider.
- However, Kind still lags General Mill's Nature Valley bars and Clif Bars in market share, and the competition is only heating up.
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Daniel Lubetzky founded Kind in 2004 with a focus on wholesome ingredients and a do-gooder social agenda.
More than 15 years later, the healthy-snack company is launching its biggest expansion to date, getting into frozen bars, refrigerated nut-butter bars and snacking chocolate clusters commonly called bark, and is also introducing new grain-free versions of its clusters products.
The move comes on the heels of Kind acquiring North Carolina-based Creative Snacks in October 2019, and confectionary giant and M&M's and Snickers maker Mars buying a minority stake in the company in November 2019, pushing the valuation of the company to an estimated $4 billion, according to The New York Times.
"Our vision and mission has remained consistent, which is to bring the 'Kind Promise' of nutrient-dense wholesome ingredients in every single category," Lubetzky told Business Insider. "But we felt like we needed a different playbook to execute on that promise."
Kind sees itself playing a leading role as health and wellness becomes more important to consumers
While Kind started off making granola snack bars, the private company has since branched into breakfast bars, fruit bars and granola clusters. It claims to avoid artificial flavors, preservatives and added sugar, and that it uses "a nutritious food as the first and predominant ingredient in every food product."
But as the company saw plant-based foods take off and new entrants enter the healthy foods category, it realized that the best way to scale and tackle the growing competition was by getting investment from a bigger player like Mars, although Lubetzky did contemplate selling or taking the company public.
"Until now, our products have been shelf-stable and could hold really well, but entering into the refrigerator and freezer is a whole new game," he said. "That's where Mars comes in with its supply chain, logistics, warehouse and distribution capabilities."
Kind is also eyeing global expansion using Mars's operations and distribution network, Lubetzky said.
The company will spend 'tens of millions of dollars more' to market its new products
Though the company's immediate focus is on distributing its new products, Lubetzky said that it planned to spend "tens of millions of dollars more" on marketing. He wouldn't give specifics, but Kind is estimated to have spent $17.5 million on advertising between January and September 2019, according to Kantar.
Kind may be one of the most recognizable names in bars, but it still lags General Mill's Nature Valley bars and Clif Bars in terms of market share, according to Euromonitor, which estimated that its sales rose to $718.9 million in 2017. It's also faced some speed bumps, discontinuing its fruit bites product from shelves last year, and laying off 15% of its sales and field marketing staff.
Competition has also been heating up for the brand, with new health and wellness brands emerging and attracting VC investment and other CPG companies also expanding their portfolios, like Kellogg buying protein bar maker RX Bars and Mondelez acquiring a majority stake in nutrition bar Perfect Bar in 2019.
Lubetzky said he's bullish on the company, saying it expected to hit $1.6 billion in sales in 2020.