CEO T.J. McIntyre sees capacity-building through a bigger and better facility as the key to continued growth for the natural foods brand.

Photos Jonathan Castner

When McIntyre joined Bobo’s in 2015, he was looking for a change of pace from his previous role as an executive VP at Boulder Brands.

“At Boulder Brands, we achieved a lot of success,” he says. “We were $750 million in revenue at our peak and publicly traded. I was yearning to go back to something that was a little bit more grassroots, certainly not public, and Beryl Stafford had built this company very much on her own. She was doing $7.5 million in 2015, and she was profitable.”

He adds, “There was nobody in sales, nobody in marketing, she had internal manufacturing and somebody answering the phone, and a part-time bookkeeper, and that was really her team.”

It was a refreshing change of pace from Boulder Brands, he says. “We were chasing trends, and the food that we sold, a lot of it I didn’t bring home. It was clean, but it was co-manufactured and it was really automated and it was marketed based on trends and positioning.” The products he did bring home “invariably were internally manufactured,” he adds.

That lined up with Stafford’s approach to Bobo’s. The story goes back to 2003, when she invented its flagship oat bars — which are vegan, non-GMO, and gluten-free — with her daughter, “Bobo,” on a rainy afternoon. “She [Stafford] held the product in the highest regard. It was the foundation of the company, and it was never about positioning,” says McIntyre. “What was sweet and valuable about the Bobo’s brand is just how totally unintentional it was. Maybe unintentional isn’t the right term, but it certainly had not been routed through an agency.”

And that remains the case today, as annual revenue soared to nearly $50 million in 2021, up 40 percent from 2020. “This last year [2021], we had tremendous growth,” says McIntyre. “In 2020, we grew a little bit, but COVID impacted us with so many people staying at home baking banana bread and sourdough.”

He adds, “In the bar category, there’s some titans like Clif and Kind that we compete against, both well over $1 billion [in annual revenue],” says McIntyre. “We’re kind of the king of the second tier, if you will, categorically.”

The Bobo’s catalog has grown as well, from oat bars and bites in 2015 to also include toaster pastries. The company’s cereal bars currently drive the most revenue, notes McIntyre, but toaster pastries are growing the fastest. “I think we’ve really upgraded the category,” he says of the latter. “We’re commanding a bigger price point for it, too. But people love it.”

Bobo’s took over the former Canyon Bakehouse facility in Loveland to supplement baking at its Boulder headquarters in late 2018, and now operates out of about 55,000 square feet of facilities in both cities.

“We came to recognize we were running out of capacity in Boulder,” says McIntyre of the 2018 decision to expand to Loveland. “We were trying to run 24/7 and capture capacity that way, but the night shift was just a total disaster. It didn’t work.”

The company is now readying a 125,000-square-foot facility in Loveland with $10 million in capital upgrades in order to boost manufacturing capacity by 250 percent (and 400 percent in the longer term). It is slated to commence operations at the beginning of Q3 2022 when the company will consolidate its manufacturing and warehousing in Boulder and Loveland under one roof, then move the offices to a new headquarters location in Boulder.

“We’ve totally outgrown the combination of these two facilities,” says McIntyre. “This year, we’ve been capacity-constrained since the middle of the second quarter, and we’ve lost a lot of revenue opportunity this year. We’ve wanted 50 people the entirety of the year and have not been able to get them, and that’s even after engaging seven temp agencies throughout the year.”

There was a board-level discussion of pursuing private equity, but it was ultimately rejected. “Now is not the time,” says McIntyre. “What we need to do is go solve our operation’s challenge and automate and get away from such a dependency on labor as we grow.”

Packaging automation from Victory Packaging is a big part of that. “There’s not a lot of value that’s created by using labor to fill and close boxes,” says McIntyre. “It’s such a gift to have their [Victory’s] automation know-how on this entire project.”

“We don’t want to change the product,” he explains. “We still manufacture like we did when we were under $10 million, we just do it with more people and more ovens.”

“We’ll continue to use dual-rack ovens,” say McIntyre. “We’re not tunnel-ovening anything, because we don’t want to change the product. Our Bobo’s bars and bites will continue to be made one at a time in their own pan, which is part of the secret sauce of our product.”

Challenges: “Our supply chain is completely upturned,” says McIntyre. It’s not because of cargo jams at the ports: The yield of the North American oat crop was 44 percent of the historical average in 2021. “And we don’t have any reason to believe that we’re coming up on some lush year as far as rainfall, so we’ve got to make sure that we’re resourced in Europe and South America, and that we have a variety of suppliers in North America, too.”

“We’re having to look long and hard at our supply chain, and we’re bringing in some expertise that is better able to navigate global sourcing.”

Opportunities: Growth within the existing product line can be realized with more capacity, says McIntyre. “We’ve missed so many opportunities with our current products,” he explains. “Fantastic food businesses are not overly reliant on expanding into as many categories as possible. We’re doing very well in nutrition bar and cereal bar and toaster pastry, let’s just focus on quality and capacity and see how fast we can get to $100 million without looking at other aisles in the center of the store to get there.”

He adds, “We have a lot of ideas for other things we can do in the baked goods category, but it’s very difficult to launch innovation in this pandemic window. Consumers are increasingly using e-commerce and they’re also ordering their groceries and going and picking them up. They’re not lingering around and seeing what Whole Foods has on the shelves like they used to. . . . Maybe that changes in 2022, but I don’t think shopper behavior’s going to revert to where it was pre-pandemic for quite some time.”

Needs: Labor, says McIntyre, but the move to the new Loveland facility in mid-2022 should help. “Not one of our hourly employees live in Boulder,” he notes. “We’re trying to do our best to have employees who have been with us a few years or longer really grow into their positions and manage a more complex operation than where they started. We have to balance that with internal infrastructure and bringing on directors and VPs who can bring much-needed experience that we don’t have in our company.”

After pushing sales and marketing since 2015, “I’m realizing I need leadership in demand planning and in production scheduling and in procurement — things we have not really prioritized,” says McIntyre.

But he recognizes a need to continually upgrade the value proposition for employees as well. In this new facility, the equipment is going to be a lot more sophisticated than how we’ve been operating, so we’ve already begun a pay-for-skills program where there will be very clearly defined levels of compensation that are tied to experience and qualifications,” says McIntyre. “I think it’s going to provide a much better career path for hourly employees that are with us, where if they ever wanted to move on from Bobo’s after working here, they’re almost in a light engineering position and they can go and command a really good pay rate, especially at a large CPG manufacturer.”

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