Every parent whose children have entered elementary school in recent years knows the routine: teachers and school administrators repeatedly send home notices sternly instructing caregivers to provide nut-free lunches. No PB&J sandwiches, no Reese’s Pieces, no granola or cereal bars.
Such edicts, meant to protect children with potentially fatal allergies, have forced parents to search the supermarket aisles—often in vain—for snacks guaranteed not to contain nuts or even nut residue.
Montreal’s YourBarFactory, a private label snack bar producer that had been rescued from bankruptcy in 2001, knew an opportunity when it saw one. In 2005, the company, which makes a variety of Rice Krispy treats and cereal bars for giant food packagers such as Kelloggs and Unilever, switched to a nut/peanut free manufacturing process. A few years later, the YourBarFactory implemented kosher food preparation techniques and received formal certification in 2009. “We’re adding credibility to our business,” says Erik Leblanc, partner and director of business development. “It sets us apart from all the other companies” in the snack bar segment.
Thanks to establishing their market niche and building on it, the firm’s export business has boomed in the past five years, jumping from $261,000 in 2007 to more than $4 million in 2012. (YourBarFactory’s 2012 revenues of $8.3 million placed it at 264th place on the PROFIT 500.)
Customize your product
The company’s move to adopt kosher food handling certification opened an important door in the export world: YourBarFactory, says Leblanc, made significant inroads in Israel, where a Unilever subsidiary had been searching for a supplier that could meet local religious requirements.
Rejigging its manufacturing and procurement processes to meet these additional ingredient requirements allowed YourBarFactory to establish a reputation as having the capacity to tailor a commodity item to meet local needs and requirements.
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Often, national food regulators determine such requirements. Leblanc cites the example of Australia, where YourBarFactory has built a presence. According to Australia’s ingredient rules, Rice Krispy treats that come coated with coloured chocolate sprinkles may not include red ones. Australia has banned the red dye used for health reasons.
To get the business, Leblanc says, YourBarFactory had to hustle to find a sprinkle producer that didn’t rely on the commonly used dye. “We have a number of key suppliers that offer a wide spectrum of the products we need,” says Leblanc, “or we can source abroad if we can’t find it at home.”
The company has further strengthened its niche positioning by creating an R&D department that will not only develop new recipes to pitch to customers, but also “co-create” new bars in partnership with international clients. In recent years, YourBarFactory has developed even more specialized recipes that are gluten free or rely only on organic ingredients.
Leblanc says the firm’s willingness to work with a client to customize a mass market item has created an attractive point of differentiation. “I don’t think a lot of companies can do that.”
Looking ahead, Leblanc says YourBarFactory intends to expand exports of cereal, high fibre and meal replacement bars, all of which tend to be more profitable than Rice Krispy bars. For those categories, he adds, the target market is the U.S., where the concern over childhood obesity is top of mind.
“Our managers are in the process of retrofitting the company’s manufacturing facilities to produce larger quantities of the new product lines,” says Leblanc. “We’re positioning ourselves to be more and more competitive in that segment.”