Skinny Pop nods to Amazon’s food clout
THE MAN who helped put Skinny Pop in lunch boxes all over America is embracing Amazon.com, the scourge of the grocery business.
The biggest food companies, notoriously slow to respond to consumer whims and losing market share to nimbler upstarts, desperately crave innovation to keep ahead of Amazon’s threat. And Jason Cohen, the Skinny Pop guy, has been there for them.
In the past, Cohen, a former insurance salesman who formed Halen Brands with fellow Van Halen enthusiast Leigh Feuerstein, placed brands like Skinny Pop and Veggie Straws with Costco Wholesale Corp. Once the products surpassed US$ 50 million ( RM225 million) in annual sales, Cohen sold them to big companies happy to embrace winning trends.
“He’s made himself the link between the new brands and the older, larger companies,” said Carl Jorgensen, director of global thought leadership for retail consultant Daymon Worldwide. “Facilitating that is a very valuable service.”
Now Cohen is rolling out a new product, a plant-based protein drink created by a husband- and-wife team of former Ivy League athletes, on Amazon. It’s an acknowledgment that e- commerce, the latest complication in the food business, has become impossible to ignore.
“If we don’t focus on that, we’ll be a dinosaur in three or four years,” Cohen said in an interview. “It’s a very expensive proposition to make a mistake on.”
W hat Americans eat and how they eat has become increasingly vexing for Big Food. In the past three years, as customers dine out more often and gravitate to the latest private-label products, the 10 biggest US food companies have seen roughly US$ 16 billion in revenue evaporate. Amazon, with its purchase of Whole Foods and its well- established distribution system, threatens to eat Big Food’s lunch.
The day the Whole Foods acquisition was announced, the largest food companies in the US, including Kraft Heinz, General Mills, Mondelez and Campbell Soup, lost almost US$ 8 billion in market value combined.
Food companies have long relied on acquisitions to drive growth and propel innovation, and they’ve started targeting smaller and smaller brand developers. General Mills and Kellogg and others have in recent years tried launching venture funds aimed at sniffing out hot new products.
Other funds are also searching for the next big thing. AccelFoods, with US$ 40 million aimed at developing the latest in natural and organic products, has backed about 30 companies since 2013. CircleUp Network has helped more than 250 food and beverage companies raise about US$ 385 million since 2012.
“Big Food has been lazy,” said Ryan Caldbeck, CircleUp’s chief executive officer. “There isn’t much choice but to acquire the innovation that they fail to produce internally.”
Enter Fairfield, New Jerseybased Halen Brands. Its biggest success, in 2015, was steering Skinny Pop to the first- ever US$ 1 billion initial public offering for a snack food. Cohen said his firm is in talks with at least two packaged-food companies on a novel plan: They’ll send their undeveloped ideas to Halen, let Cohen and his crew work their magic, then buy them back.
“They have ideas they don’t want to mess up, things they realise would languish inside their infrastructure,” Cohen said. “We’re experts in getting that first US$ 50 million” in sales.
Cohen was a life-insurance salesman in 1999 looking for a side project when he had the idea to make biscotti with a message inside, like a fortune cookie.
He’d failed at other business ventures - a chain restaurant, water- cooler covers that looked like fish tanks and even hyperbaric chambers.
One night, at a Van Halen concert in New Jersey, Cohen happened to park next to Feuerstein, a hedge-fund employee he didn’t know, and shared some cookies. A couple years later, he ran into Feuerstein at a Starbucks near his home in North Caldwell, New Jersey. They remembered each other from the concert and discovered that when Cohen was orchestrating the sale of the cookie brand to Keebler Foods, Feuerstein had a hand in evaluating the deal. Soon after, they teamed up.
Mamma Says, the cookie business, took off after getting an order from Costco. At the time, the warehouse retailer was seen as a discounter, and foodies thought Cohen was crazy for taking his product there. But Costco had tapped into a strategy that would prove popular in the grocery business: Stocking products that can’t be found elsewhere. Cohen’s relationship with Costco took off after he developed Veggie Straws exclusively for the store chain. That business sold to Hain Celestial Group. — WPBloomberg
He’s made himself the link between the new brands and the older, larger companies..Facilitating that is a very valuable service. Carl Jorgensen, director of global thought leadership for retail consultant Daymon Worldwide