Firm ‘engineers’ nutritional drink without compromise
Food scientist takes unconventional approach to create Gnubees
Ron Kendrick, a food scientist who developed Clearly Canadian and Orbitz, is hard at work again — but this time, he’s breaking all the rules.
“As a product formulator, when you’re given a task to create a product ... your mandate is the product should deliver a certain taste profile, and a certain colour and this and that, and you’re also told it needs to meet a certain price point at retail,” said Kendrick, who started his career at Pepsi and once managed 16 Clearly Canadian production centres.
“Ingredients are generally chosen on cost, ease of use, stability, on how long they will last in the warehouse,” he said. “We wanted to work backwards from that. Rather than say, ‘Let’s build the best beverage we can for 85 cents,’ we said, ‘Let’s build the best beverage we can.’ ”
Like a growing number of conventional food industry veterans, Kendrick wanted to work with natural, organic and non-GMO ingredients. But he wasn’t interested in cold-pressed juice or fruit purées. In an industry where “natural” and “pure” are all the rage, the vegetarian and outdoor enthusiast unabashedly uses words like “engineer” and “build.” Kendrick wanted to engineer a high-quality, shelf-stable, nutritional drink with none of the compromises that come with mass production.
“It’s totally against the trend,” acknowledged Sarah Wall, Kendrick’s daughter and business partner at GnuSanté Creations. “People hear ‘science’ and ‘food’ and think Monsanto.”
From a business standpoint, the whole plan sounds a little mad. Certainly, the longtime beverage industry consultant never managed to talk a mainstream client into making an investment. Finally, with his 60th birthday approaching, Kendrick took on the job himself.
Idealistic dreamer? Perhaps. But one with decades of industry expertise and $400,000 of his own savings in the game.
Working with food scientists at his 16-year-old consulting company, Catalyst Development, Kendrick came up with Gnubees, a line of nutritional drinks for children with no processed sugars, artificial or genetically modified ingredients, but five grams of fibre, seven grams of protein and 15 per cent of recommended daily amounts of 26 vitamins and minerals in each 296-ml pouch.
“Our goal was to create a product that offered comprehensive nutrition,” Kendrick said. That’s harder than it sounds. Even calcium-rich milk lacks fibre. Organic juice and coconut water don’t fit the bill either because organic doesn’t mean nutritious, Wall said. Then there’s cost. An artificial sweetener like sucralose keeps for years on a shelf, but organic pear juice concentrate comes frozen. “The ingredients themselves have to be kept frozen, not just the finished product, so there’s cost inherent in the ingredients,” Kendrick said.
Gnubees launched last fall and is now in half a dozen stores, including Meinhardt Fine Foods, Nesters Market in Squamish, and SPUD, the online grocer.
Kendrick’s business plan calls for breaking even at year three and making a profit by year five. Two and a half years in, they are “keeping our heads above water.”
Kendrick’s emphasis on quality ingredients necessitates small-batch production (up to 800 units an hour) on his own 600-square-foot production floor.
This, in turn, has meant prototyping his own small batch production equipment. By keeping everything in-house, from product development to production and distribution, he saves on third-party margins, but savings are offset by premium ingredient costs.
As the business scales up, Kendrick hopes to build additional small production “pods,” each serving a 800-kilometre radius.
“There are only a few national brands out there. Most are multiregional. They just don’t want to believe they are,” said Kendrick, a Canadian Bottled Water Association past president. “We’re servicing each region with a local product. The business case starts to make more sense when you look at the vertical integration.”
Meanwhile, Catalyst’s income, and manufacturing product for other small companies, pays the bills. “We’ve found ways to pay our bills while maintaining this idealistic, ethical platform. It is a long, slow journey,” Wall said.
With Catalyst absorbing development costs, Kendrick has been able to keep Gnubees’ retail price at $3, which allows retailers to make close to their usual margins of 30 to 40 points. Retailers are hungry for local product.
“Our customer is looking for uniqueness and quality,” said Michael Meinhardt, Meinhardt store manager. As long as price corresponds with quality, customers are willing to pay, he said.
This summer, GnuSanté expects to launch a nutritional drink for adults based on brewed coffee and tea. Flavours will include matcha, latté and mocha. GnuSanté also has a stake in 52° North, a new birch tree sap beverage.
“If the only goal we have is to make money, then we’re doing ourselves a disservice,” Kendrick said, but, as he puts it on the GnuSanté website, “I could play it safe, stay with convention and not rock the boat or I can take a risk and try to do business differently, hopefully in a meaningful way.”
“Rather than say, ‘Let’s build the best beverage we can for 85 cents, ’we said, ‘Let’s build the best beverage we can.’
RON KENDRICK CATALYST DEVELOPMENT