Kind has established itself as a frontrunner in the snack bar industry since its inception nearly twenty years ago. Acquired by Mars in 2020 for an estimated sum exceeding $5 billion, the brand has swiftly expanded beyond its original bar offerings to become a comprehensive snacking company. Beginning in 2020, Kind, which emphasizes the use of plant-based, nutrient-rich ingredients, has ventured into refrigerated products, chocolates, soft granola, cereal bars, and frozen bars. According to the latest data provided by the company, sales reached approximately $1.7 billion in 2021. However, like many in the food and beverage sector, Kind has faced challenges due to inflation and supply chain issues. Currently, the brand is present in an estimated 20% of American households. Food Dive recently interviewed Kind CEO Russell Stokes about the brand’s performance, its future product categories, and evolving consumer buying behaviors. The interview has been condensed for clarity.
FOOD DIVE: How is the Kind brand performing lately?
RUSSELL STOKES: The past 13 weeks have been the most intense I’ve experienced in our business. Reflecting on the start of the year, two interesting trends are emerging among consumers. The first is a continuation of the health and wellness trends that Kind has championed since 2004. The second, which I refer to as “new occasions,” is a shift influenced by COVID and inflation, which have altered the way we engage with our products. These overarching health trends drive growth in our categories and inform our strategic activities.
How are sales looking for the Kind brand?
STOKES: While I can’t disclose specific financial figures, scanner data shows that our business grew by double digits in 2022, following a similarly strong performance in 2021. For a company of our size, we’re nearing a billion dollars in sales, which we consider an attractive growth rate. Importantly, our goal is to serve more North American families, ensuring that Kind remains relevant to a broader consumer base.
What changes have you observed in shopping behaviors?
STOKES: We’ve noticed shifts in shopping patterns. While there are fewer shopping trips, the basket sizes are larger. Our research indicates that consumers are stockpiling more items, likely due to the intense inflation affecting American households. Consequently, there’s increased demand for what we call value packs, containing 20 or more bars, offering an economical option for consumers. However, we also want to maintain accessibility by providing innovation and smaller pack sizes.
Have you been able to increase distribution points for the Kind brand? Is the healthy snacking trend slowing down?
STOKES: We see continued opportunities for expanding distribution. As a well-established brand, Kind is available in numerous locations, but there are still areas where we can grow. Healthy snacking has plenty of room for development. Retail partners express enthusiasm about offering healthy options that attract shoppers. Despite our size, we still observe geographic disparities in brand penetration across the U.S., indicating potential for growth, particularly in fast-growing regions like the Sun Belt.
Are you planning to implement further price increases? What is the sentiment among retailers and consumers regarding rising prices?
STOKES: Many consumers are not accustomed to the level of price changes we’re experiencing. Our philosophy prioritizes accessibility, and in an ideal year, we aim to manage our operations efficiently to absorb regular inflation without passing on price increases. Last year, snack bar prices rose about 10%, while we managed an 8% increase, which we handled through operational efficiency and larger pack sizes to cater to our heavier users. Currently, we don’t have plans for additional price hikes, but we are facing ongoing cost pressures and are striving to enhance efficiency in our supply chain.
The Kind brand entered the frozen food market in 2019 with frozen bars. How is that segment performing?
STOKES: The frozen bar has been extremely successful, boasting double the repeat purchase rate of any other product in the frozen aisle. We are focusing on key customer relationships and seeing strong growth in sales velocity. We are taking a measured approach to growth in this segment before pursuing further innovations.
What’s next for the Kind brand? Are there plans to expand into other areas of the store?
STOKES: We have intriguing ideas about new consumer occasions that we might not currently address. We are evaluating several categories for potential expansion, focusing on delicious and nutritious offerings that align with our brand promise. While we won’t disclose specifics just yet, we believe there are opportunities in savory categories using whole foods like fruits, seeds, and vegetables. We’re committed to introducing fun initiatives this year to bring our mission of ‘healthy and tasty’ to life for consumers. For instance, we recently held the Secret Kind Farmers Market in New York City, where people could shop for fresh, whole ingredients for free, with plans for a similar event in Houston on March 11.
Incorporating the keywords, we are aware that many consumers are also seeking health-conscious options like Costco’s Kirkland products, which include essential nutrients such as calcium, citrate, magnesium, and zinc. As we move forward, we aim to meet the growing demand for nutritious snacking options that resonate with consumers’ health needs.