A Bite With… Robert Broome, Founder of Mooski

Mooski is making a big push into online grocery. The chilled oat bar brand is building on its successful partnership with Hungryroot and has now expanded nationally with Misfits Market and Thrive Market, said Robert Broome, founder of the California snack startup.

It’s a path more packaged food entrepreneurs are considering in order to sidestep the staggering costs required to win in traditional retail while building brand awareness. For Broome, “online grocery is and will continue to be one of our most important and strategic channels.”

Founded in 2022, Mooski markets a line of muesli-inspired bars coated in dark chocolate and made with gluten-free oats, peanuts, almonds, olive oil and agave. Flavors include Chocolate Peanut Butter, Cookie Dough and Peanut Butter Banana.

While the bars are sold in a smattering of specialty food stores and regional grocers across the country, Broome is particularly bullish on the online grocery opportunity. Here’s why.

What are the benefits of online grocery versus traditional retail?

For starters, it can be a higher margin channel. You can go direct with many online grocery platforms, meaning cutting out the distributor, which allows the brand to charge a slightly higher price since they don’t have to account for the distributor mark-up. In addition to a higher gross price there is also less trade spend overall. It’s easy to rack up trade spend in retail – including free-fills, slotting fees, quarterly ads / TPRs, etc. There is no slotting or free-fills with online grocery, and while there are tactics to promote your products on the platforms (like TPRs), there’s not a need to do it as consistently as in retail. A high gross price and less trade spend results in higher gross margins.

Another big benefit is product availability. There is no need for merchandising support in online grocery, and you therefore don’t have to worry about out-of-stocks like you do in retail. Out-of-stocks and voids can greatly hinder a brand’s ability to drive velocities and can cost brands time and money with merchandising support.

Product freshness is also a huge benefit – especially for perishable brands. We’re able to work closely with our online grocery buyers to manage supply and demand and ensure the end customer is getting the freshest possible product. By contrast, in retail it is individual store-level managers ordering product from a distributor. Since there are a lot more people placing orders for your product on the retail side, there is more room for error when it comes to ordering the right amount and therefore more potential for spoils. There can also be a lot of turnover at the store level, so there’s no guarantee that the person ordering your product has a firm understanding of your product’s shelf-life.

Trial driving is a huge benefit of online grocery over traditional retail. It’s really hard in retail to drive new customers to your brand. A lot of people are creatures of habit when they shop in retail and there is not as much organic exploration. While every online grocery platform is a bit different, a lot seem to have a system built in where they will basically send people a curated assortment of snacks based on their algorithms – so we are essentially getting people to try Mooski without them having to “select” or buy us. As such, online grocery can function as a great sampling tool.

How is your product performing in these accounts?

Our product is performing really well so far! Hungryroot was the first online grocery platform to take us in and we’ve sold tens of thousands of bars with them in our first year. We just launched with Misfits Market and Thrive Market, so we don’t have any insight yet on performance, but forecasts for each seem really strong out the gates. I would say though that the majority of people that reach out to us either via our website or social with high praise about our product are discovering us via online grocery. I think this is a testament to how we are reaching so many different people on these platforms and how the product quality and freshness is really maximized with online grocery.

How does online grocery figure into your long-term retail channel strategy?

Through online grocery, we are able to get Mooski to places where we have no retail distribution. This is extremely valuable because it allows us to grow our customer base without geographic limitations, and it will help us build awareness and loyalty in different areas, so that when we do launch in retail in those areas, we will already have a customer base there that already likes and is aware of our product. It’s so hard as a small brand with little awareness to launch a retailer in a new region because no one in that region knows who we are. Over time, as we build our awareness through online grocery, we’ll be able to have a better baseline of awareness when we launch retail in new regions.

Why should emerging brands with a small retail footprint consider building in this channel?

For all the reasons just mentioned (margin, trial, awareness, etc.), but specifically for perishable emerging brands, this channel is a must. Shelf-stable brands are able to leverage and execute DTC pretty easily and profitably to achieve some of the same trial and awareness objectives online grocery allows for. For perishable brands though, DTC is very challenging because the logistics are more complex and expensive. For perishable products you have to pay for expedited shipping (overnight or two-day) as well for ice-packs and insulated liners. To offset such high shipping costs, perishable brands have to have higher minimums to break even. This in turn leads to a poor customer experience – high total costs and way too much product.

Online grocery is a much better experience for the brand and the customer. For the brand, we don’t have to focus on fulfilling a bunch of different DTC orders. We ship in bulk to the online grocery platform’s warehouse, and they take care of the individual parcel shipments. They also take care of managing their site and the customer service. This allows brands to forgo spending time, money and bandwidth on a traditional ecommerce manager type role.

Also, brands don’t have to spend time and money driving traffic to online grocery platforms (paid social, google search, etc.) like they would to their own website. Instead, brands get access to the millions of customers already shopping on these online grocery platforms. And for customers, they can buy much smaller quantities of the product they want because it is coming in a box with other groceries. It’s a win-win for everyone.