In Business, Creating Sustainable Enterprises & Communities

ORGANIC GRANOLA COMPANY FEELS ITS OATS

In Business, July-August, 2005, Vol. 27, No. 4, p. 14

Two dedicated health foods entrepreneurs bring an environmental icon back to its grand roots - and well-deserved shelf space in food stores.

GRANOLA has long been a product and term that symbolized the earthy essence of the environmental movement in the 1970s, 80s and 90s. Now a company called GrandyOats of Brownfield, Maine is gaining success by offering a complete line of organic granola from coast-to-coast. Timing of their organic granola conversion couldn't be better, as food industry experts cite whole grains as one of the hot trends for 2005. “The new FDA guidelines confirm what we have been touting,” says Aaron Anker, Chief Granola Officer (CGO) for GrandyOats. “Servings of whole grains like our granola are essential for a healthy diet.”

HISTORY WITH SOME PASSIONS
GrandyOats was born in northwestern Maine. In 1979, Sarah Carpenter and Penny Hood, two great friends, decided to start baking granola for a couple of local health food stores. What began as a once a week get together and social baking hour bloomed into a full fledge business within a few years. They were selling to stores in Boston, New York City and all over Maine. They hired employees, had lots of fun and were able to bake a lot of granola, and spend some quality time together.
By the mid 1990s, they were ready to move onto other passions, including land conservation and art therapy. They didn't just want to sell to the highest bidder, or just another granola company, they wanted to pass it onto other like minded people.
Nat Peirce owned a local café and bakery in Bridgton, Maine called Bountiful Berry. Here he made vegetarian entrees, breads and pastries. It was a good business, but Nat aspired to try a wholesale business and supply a product to stores in the area. He even thought of granola. He mentioned this to a faithful customer one morning. The rest is history; the customer connected the two women with the ambitious young baker. In 1996, Nat bought GrandyOats from Sarah and Penny; after weeks of training, they moved the bakery from the Farmington area to Bridgton, Maine. Years passed and Nat continued the business, expanding it slightly, but as an individual it was difficult.
In the late 1990s, Aaron Anker moved to Maine after running a vegetarian and vegan bistro in Colorado. He began working for the rapidly growing Fresh Samantha Juice Company. After a couple of years of great experience selling and promoting juice, Aaron was ready for his own endeavor.

NEW PARTNERSHIP
Nat and Aaron partnered in GrandyOats in the spring of 2000. With Aaron's sales experience and Nat running the bakery, they expanded their sales base throughout the East Coast. Now, GrandyOats sells across the country and has created a few more brands.
In the fall of 2001, Uncle Roy's - a New England granola company - sold to GrandyOats. Aaron likes to say, “it made oatal sense”. They became a granola cluster. In the summer of 2002, Nat and Aaron moved the bakery to a historic dairy barn located in Brownfield, Maine. The new space allowed for more room to make granola and other products.
In the fall of 2003, Nat and Aaron announced a new line called Organic Trails - a variety of organic trail snacks, designed for the road. The new line is sold in bulk and in small, individual packages.
In 2004, sales had grown to over $700,000. As of 2005, Nat and Aaron now have 11 people working for them and are nationally distributed. They are on target to do $1.1 million dollars in sales in 2005. Through the first four months of the year, they are growing at 85 percent. With sustained growth and over 55 new products, Nat and Aaron have grown GrandyOats into a full-fledged business.

USING ORGANIC INGREDIENTS TO DIFFERENTIATE THE COMPANY
“Organic has been a powerful tool to differentiate our company from the mass of products out there,” says Anker. It took him, age 33, and Nat Peirce, 34, four years and all of their combined 20-plus years of natural product industry experience to complete conversion of their entire line.
Being a small business, GrandyOats faced the enormous challenge of trying to source affordable organic raw ingredients for all of their products. The ingredients were either not available in the quantities they wanted or were prohibitively priced. They were able to overcome this through cooperative purchasing partnerships with other small businesses and acquisition of a competing brand to increase purchasing. By diversifying to include sales of bulk items to retailers, essentially the individual components of their granola blends sold in bulk bins, they have been able to gain even greater ingredient quantities and lower prices. “Our new focus on bulk ingredients is a throw-back to the roots of granola, and its very popular especially with independent health food stores,” says Anker.
“Our products are carefully micro-baked in small batches,” notes Peirce. “We get our product to the stores fresh - often within 24 hours - and even though we use an artisan production approach, we use modern vacuum sealing to help maintain quality.”
The company operates from a restored 100-year old dairy barn nestled in the rural hills of western Maine. “Ultimately, we are what we make - granolas,” says Anker, who escaped the corporate world in exchange for the laid-back, lifestyle of a granola 'executive.'
With roots dating back to 1979, the granola line now consists of seven varieties: Classic, Consciousness Raisin, Low Fat Cranberry Chew, Berries Jubilee, Low-Fat Cinnamon Apple Crisp, Mainely Maple and Chocolate Peanut Crisp. GrandyOats also offers a line of Organic Trails snack mixes and bulk roasted nuts. For more information, visit www.grandyoats.com.

PLANS FOR THE FUTURE
GrandyOats has grown 1,000 percent in the past five years. Adds Anker: “We want to grow without having to wear helmets.” They plan on outfitting the bakery with solar and wind power and converting a delivery vehicle to biodiesel. Last year, GrandyOats contracted 100 acres of organic oats to be grown locally in Maine, with a goal to help revitalize grain farming in Maine. GrandyOats would like to become a $5 million a year company by 2009.

WHY GET INTO THE NATURAL PRODUCTS INDUSTRY NOW ... WHEN IT'S GOTTEN SO COMPETITIVE? - Aaron Anker

I remember five years ago when someone asked me a tough question when I was just starting with GrandyOats. They asked: “Why would you get into the natural products industry now, it has gotten so competitive and all the big companies have bought the small ones.” I replied that every time a big company buys smaller ones up they leave holes. They leave a niche for small innovative companies willing to take risks and do new things. It happens in every industry.
The truth five years later is I was right and I was wrong. Certainly there has been room. We have grown our business by ten times sales, while equally important we converted our products to organic and maintained our ideals and our good business practices. But the other side of that story is that a part of the person's question and statement have been true. It is increasingly competitive.
This competition is good, it makes our business stronger and smarter, but where the real challenge comes in is in resources. Their advantage comes mostly in the form of money, but also in human resources. Many of these larger companies can pay for slotting fees (placement fees just to get your products on the shelf). Also they have teams of experienced people who can manage things better.
So the real question comes down to, how have we been able to succeed?
We have been creative, realizing it takes time, and that our success will not happen over night. We have chosen to grow at a sustainable pace. Our growth has allowed us to maintain our ideals and not be so fast that it is blinding. We do a lot of event marketing and public relations. Being environmentalists, my partner and I have tried to institute our .life philosophies in the way we do business. It is not our motivation to brag about it, but promoting the fact that we do business right has given us good exposure and grown our business by letting socially conscious consumers know we are a good company. People need to know - those of us who know voting with your dollar is a great way to promote change - knowing who to support is very important.
The other thing we do is sample our product at stores, so that customers can try our products before buying them. I used to do all the samplings, as my time has become more stretched I do less of them, but I used to tell people I was the owner and they were blown away. I would be in Washington, DC doing demos and say I was from Maine and people would be surprised I had driven all that way just to pass out granola. People are not used to meeting the owner and producers in this world. Our economy is so large that we are very disconnected.
The real difference between us and many of the companies out there is we are real people making real food. Now that may sound pretty basic but it is true and a rarity. Most food companies have products made by large contract manufacturers. We produce everything. We are trying to promote this more and more and have begun a monthly newsletter. Each month we highlight a different staff member. It makes our customers know our team, or family as we like to refer to it, around us are real people making real food.
Being organic has also differentiated us. It has been the largest focus for us. Going full certified organic was expensive and took a lot of time but it was all worth it. I hope it comes through but being small can be good, people are tired of the big companies.