Soozy’s Grain-Free Celebrates 5th Anniversary; Discusses Growth, Distribution and Investment Journey

New York-based grain-free baked goods maker Soozy’s is approaching its fifth anniversary with ingredients it believes can help the company achieve more mass appeal. In addition to broadening its positioning, the brand has also expanded its product mix and distribution and brought on a new investment partner.

“Why can’t we take these common foods that people love and indulge in and make them better for you and healthier,” CEO and co-founder Mason Sexton told NOSH. “The way we position it is giving our customers real food as nutrient dense as possible and we think that’s a positioning that is not going anywhere. [As for] some of these hyper trends…is keto going to be around in five years? Ten years?”

On a quest to find gut-friendly baked goods, Sexton and roommate Susan Chen founded Soozy’s in 2017 with a line of frozen, grain-free muffins sold exclusively at HEB stores. At the time, paleo-friendly snacks and gluten-free baked goods, such as Partake and Rule Breaker Snacks, were growing in popularity. According to data published by the National Library of Medicine, gluten-free products grew at an annual rate of 28% between 2004 and 2011 with an estimated $2.6 billion in sales in 2012 and was projected to reach $6.6 billion by 2017.

But man cannot live on muffins alone. Over the next two years Soozy’s expanded its portfolio with a line of frozen, ready-to-eat donuts, which, in part, helped the brand grow its distribution to 1,400 retailers nationwide, including Kroger and Wegmans. This month it added natural products retailer Sprouts to its list, expanding its total retail footprint to over 3,000 retailers nationwide.

In 2020, the brand added two varieties of frozen bread and bagels, as well as shelf-stable cookies – marking its first move out of the freezer aisle. In celebration of its anniversary next month, Soozy’s launched a Sprouts-exclusive Birthday Cake Donut.

“The freezer has been an ally to us. But it’s also been a challenge at different times,” Sexton said. While consumers did not necessarily associate bakery items with the freezer aisle, freezing was necessary to maintain the integrity of certain key ingredients. To address that hurdle, the company said it has several more shelf-stable baked goods in the pipeline to launch in the next six to 12 months.

Most recently, Sexton assumed the CEO role in January 2020 after Soozy’s namesake, co-founder Chen, took a step back from day-to-day operations. Prior to his appointment, Sexton had operated as president of the company.

In addition to portfolio and leadership changes, the past five years have also led the brand to broaden its positioning, encompassing attributes like clean ingredients that appeal to the everyday consumer.

Soozy’s markets itself as simply “real food” that is nutrient-dense, according to Sexton, though grain-free positioning remains a “cornerstone” of the brand. Today’s packaging continues to include gluten-free, paleo-friendly and vegan callouts. This new direction has allowed Soozy’s to reach a wide array of consumers, from mothers opting to buy healthier options for their children to customers searching for celiac-friendly snacks.

Soozy’s products are currently available in both natural and conventional retailers, with the latter previously representing the bulk of its sales. Prior to its national Whole Foods rollout in 2020, 70% of the brand’s footprint was in conventional retailers. Today, the breakdown has shifted to 60% natural and 40% conventional retailers.

While many emerging brands would first look to the natural channel, Sexton said Soozy’s has operated under the mentality that natural retailers will “show up as they show up,” Sexton said. Instead, he said, the goal has always been to scale the brand as quickly as possible.

“You don’t always have the opportunity to be picky or choosy even though certain products may resonate and may do even better in the natural channel.”

Sexton continued, “I give credit across [both channels]… certainly the natural channel tends to be the more innovative, in this regard, but we’ve seen it go both ways. This was never something that was meant to be niche.”

As of 2020, the company had raised $3.5 million, including $2.5 million from a 2018 funding round led by investment firms BIGR Ventures and AccelFoods. To continue fueling growth, Soozy’s partnered with bakery giant Grupo Bimbo in August 2021. According to Sexton, the investor’s guidance has been key in scaling the business and streamlining operations.

That focus on operations has deeply benefitted the brand. Despite supply chain challenges amid the ongoing pandemic, Soozy’s has boasted a 98% fill rate in the first six months of 2022, Sexton said. The company attributes this success to strategic raw materials sourcing and its relationship with vendor partners and co-packers.

Looking ahead, Soozy’s is focused on expanding its footprint and rolling out additional better-for-you iterations of conventional baked goods in both the shelf-stable and frozen categories. According to Sexton, Soozy’s has several major retailers in the pipeline for launch within the next six months, in addition to a brand-new ambient product that is a “common household” staple.

“We’re not here to go a mile wide and entity type thing. We want to continue to penetrate our products, but we still see a lot of opportunity with what we’re doing still within that Soozy’s philosophy of better-for-you clean ingredients,” said Sexton.