As KIND Expands Into New Aisles, Experts Weigh in on When and How to Platform a Brand

Since launching with a humble fruit-and-nut bar in 2004, KIND has evolved into a “global health and wellness platform” offering over 80 snack varieties. Now the brand is taking a step further, betting its success in bars and granola can translate to a successful extension throughout the grocery store. Valued by Forbes last year at nearly $3 billion, the brand has rapidly expanded into new categories this year from confection to frozen products to snack mixes, many of these with support from minority stakeholder and candy giant Mars. The question is: how far can it go and how fast?

This summer alone, KIND has grown its portfolio with a slew of new product launches, rolling out 4-SKU oatmeal and cereal lines while also extending its FROZEN line with Smoothie Bowls and a new flavor of its FROZEN bar after a test run in Walmart last year. These products come after a batch of new launches announced in February, including chocolate KIND Bark, Fruit & Nut Clusters, Energy Bars and refrigerated Nut Butter Bars.

The new innovations come less than three years after Mars took a minority stake in the brand in 2017 in order to “to grow KIND’s product offerings and business globally, utilizing each other’s strengths,” according to a press release, and less than a year after KIND’s acquisition of better-for-you snack brand Creative Snacks.

KIND CEO Mike Barkley said in an email that KIND’s innovations each have a different path through development: in-house, joint ventures or from its acquisitions. The brand’s new Nut Butter Bar was a product developed in-house, while its Fruit & Nut Clusters are an evolution of a similar Creative Snacks product. KIND also partnered with Mars for its new Bark and FROZEN lines, part of the strategic partnership’s goal to bring the brand “to new geographies and categories.” According to Barkley, the through line for each product launch is that its first ingredient be a “nutrient-dense food recommended for daily consumption.”

“Our approach to innovation remains consistent across all categories,” said Barkley. “It must uphold our brand promise to create innovative, premium foods that are both healthy and tasty.”

KIND founder Daniel Lubetzky hinted at the full slate of new launches in a LinkedIn announcement last May about the FROZEN launch, stating that the brand would soon be found “in other unexpected places across the grocery store.” However, in that same post he also noted the significant challenges of expanding into new categories, namely developing an entry into a category that isn’t simply a me-too product, writing: “when you are building a long-term brand that aims to always exceed expectations, it is less costly to accept that you should not enter a new category unless you can meaningfully elevate the consumer experience.”

According to several food and beverage investors and brand leaders, Lubetzky is correct; platforming a brand is no simple task, with many variables at play such as determining when and how much to invest in innovation, developing unique products and selecting a pace at which to roll them out.

Acquisitions and investments can play a role in pacing and determining the right direction, experts agreed.

Stepping on the Scale

Jared Rosenbaum, former senior director of corporate development and strategy at Kellogg’s who oversaw the company’s acquisition of RXBAR in 2017, said the lifecycle of a brand can often dictate the right time to expand. When deciding whether to double down on a core product offering or reach into new categories, brand leaders should ensure their core product is “solid” and must question how quickly they want to grow.

“If you’re a $10 million company that’s going to go to 20, you can double your sales through your core product,” he said. “If you’re a $100 million brand, and you want to try to get 50% growth, it’s going to be hard to do off of a core product, so you probably need to start venturing into some other areas.”

However, many large companies in the CPG space, such as Frito-Lay brands Doritos and Lays, have found success by remaining loyal to one product form, said Will Lisman, chief commercial officer at HumanCo and former vice president and general manager of Hershey-owned Amplify Snack Brands. Skinnypop, an Amplify brand, has found success sticking to line extensions like popped mini cakes and chips that are similar thematically to its original popcorn offering.

“When you look at the billion dollar plus brands in CPG, broadly, and specifically, when you look at food and beverage, they tend to be much more narrow in terms of their category focus and footprint,” Lisman said.

John Foraker, former CEO of Annie’s and current CEO of Once Upon a Farm, noted that brands should ask themselves whether they “have any right” to enter a certain category. For example, during Foraker’s time at the brand, Annie’s launched a yogurt product that ultimately “flopped” despite General Mills’ success in the category with Yoplait because it didn’t offer anything “new and incremental” to the category. Foraker added that just because a consumer buys your product in one category, that does not mean they’ll follow you to another. He recommended brands test a new product in one retailer, as KIND did with its FROZEN bar, to get an understanding for the product before going broader with its distribution.

“Entrepreneurs and founders probably perceive that it’s easier to take that brand into other categories where there’s entrenched incumbents that have already established it,” Foraker said. “So if you’re just chasing somebody into a category and extending into it because you think your brand’s really strong, it’s really hard to do that.”

Expanding at a rapid pace may be less risky for companies at a scale like KIND, but for smaller brands who don’t have the financial or operational support of major companies like Mars or, in Annie’s case, General Mills, Foraker said expanding into new categories can “dilute focus and effort.” He noted brands are often unaware of the operational complexity this can add to its business, in terms of supply chain, shipping and storage, as well as with engaging new category buyers. He advised that brands pick one category that will likely appeal to their core consumer base to avoid extending too wide or straying too far from their original offering.

The Investment Factor

While the ability to flex into other categories could also seem like a selling point when a brand is looking to sell (and it may ultimately add a small amount of value to the brand) companies most often acquire brands for their core business, according to Rosenbaum.

In the case of RXBAR, which since its acquisition has expanded into nut butters and oatmeal, Rosenbaum said Kelloggs acquired the brand for its bar business, which had already proven to be accepted by the market. The same is true for Annie’s, with Foraker noting that General Mills helped the brand realize many of its goals for expansion but acquired the brand because of its established kids snacking business.

In general, Rosenbaum said a brand’s core product should have the “right metrics, the right growth [and] the right taste” because companies are “investing in the cash flows of the business as it exists today.” According to Lisman, whether a company considers the platform potential for a brand in the acquisition process can also often depend on the buyer.

“If the strategic is more of a pure play in a given category then you are likely to see more focus around that category,” he said. “In cases where the strategic is diversified, they will likely have a greater appetite to build a platform across categories given they have existing capabilities to leverage.”

Ultimately, Foraker noted, brands that have ample time to test out new products in retail and, like KIND, don’t have shareholders to answer to, may have a better chance at success as they expand into new aisles. Even then, however, the risk can still be fairly high.

“Even with strong brands, it oftentimes fails. Once in a while it works,” Foraker said. “If you have a long time to prove it out and you’re not subject to quarterly earnings reports, it gives you the ability to really seed stuff and build it slowly. That gives you a better chance, but it’s just hard.”