Voice of the Modern Manufacturing Economy Since 2013

Birch Benders Micro-Pancakery

by Jamie Siebrase on March 20, 2017, 09:16 pm MDT

www.birchbenders.com

Denver

Founded: 2011

Privately owned

Employees: 6

Industry: Food & Beverage

Products: Natural pancake and waffle mixes

Co-founders Matt LaCasse and Lizzi Ackerman are bringing flapjacks back to the breakfast table with their all-natural pancake and waffle mix.

It turns out hotcakes haven't been selling like hotcakes lately. From 2009 to 2014, pancake mix sales dropped 1.5 percent, according to Bloomberg. The average American spent a mere $1.16 on them annually, enough to buy one box of Bisquick every three years. Those aren't encouraging figures, but that hardly deterred LaCasse and Ackerman, Birch Benders’ respective CEO and CMO.  

The husband-and-wife duo graduated college in 2010, and promptly relocated to Colorado for the slopes and sunshine. LaCasse was working at The Kitchen Upstairs when he started poking around the natural foods aisle in search of the perfect pancake mix. He was looking for a high-quality product that tasted gourmet and required little to no effort to prepare.  

But it didn't exist yet. "The natural stuff was glorified flour. You still had to add eggs, oil, and milk," LaCasse recalls. As for the conventional mixes, he adds, "Nobody had taken time to clean them up."

When ski season ended -- and with no prior food manufacturing experience -- LaCasse and Ackerman started testing pancake and waffle mix recipes in their kitchen in Boulder. The process involved lots of trial and error, and a series of informal double-blind taste tests that had the pair sampling just about every organic flour they could get their hands on.

Once they'd locked down their favored flours, Ackerman and LaCasse got to work testing "every organic chocolate chip in the country," says Ackerman. (The things a food entrepreneur has to do for the sake of business!)   

Nine months later, the duo had finally nailed their Classic Recipe pancake and waffle mix, which uses organic wheat flour "plus all of the ingredients you'd expect to find in a pancake," says LaCasse.

By the end of 2011, LaCasse and Ackerman had prototyped four organic mixes -- Chocolate Chip, Six Grain Cinnamon, and Gluten Free, in addition to Classic Recipe -- and they were ready to manufacture. Finding a co-packer willing to work with a small start-up presented a new challenge.

"We needed a partner that could accommodate tiny orders," Ackerman explains. She called co-packers nationwide. "Most just laughed," she recalls. In Modesto, California, though, Ackerman finally found a manufacturing partner that "believed in the product," she says, and was willing to do miniscule runs.

Birch Benders has since grown into a company demanding million-unit runs, and added another partner in Hodgkins, Illinois, in 2017. The company has added a few more pancake mix varieties to its lineup, too.

"Pancakes aren't traditionally thought of as a health-conscious food," Ackerman begins. She and LaCasse began working on a functional line with Paleo and Protein mixes designed to appeal to consumers with dietary restrictions.

"Our functional line utilizes lots of alternative flours," explains LaCasse. "Our Paleo mix took 99 attempts," he continues.

"That's the hardest recipe we've ever done because it has none of the things normal pancakes have," adds Ackerman. The uniquely delicious flavor profile comes from a combination of coconut, almond, and cassava flours sweetened with monk fruit, "which is naturally sweet and tastes awesome," she adds.

The physical manufacturing "is one of the easiest processes there is," says LaCasse. High-quality raw ingredients are sourced nationwide and blended in a 250-pound ribbon blender; Birch Benders pouches are filled, heat kilned, and boxed before being sent to an Illinois warehouse for shipping and fulfillment.

LaCasse and Ackerman continue to develop recipes and oversee operations from the Birch Benders' headquarters is in Denver, but they outsource various aspects of business in order to keep their company lean.   

Birch Benders got its start in Lucky's Market in North Boulder. Back then Ackerman says, "The mix was in glass and plastic jars, and consumers added water to the fill line, shook the jar, and poured." Some consumers were baffled. "The jars looked half-empty, and we were also criticized for having packaging waste," she explains.

She and LaCasse weren't afraid to adapt their brand based on consumer feedback. Over the next two years they demoed their product often, and rebranded just in time for Natural Products Expo West in 2014, where they introduced larger versions of the sleek Birch Benders pouches you'll see on shelves today.

"We launched our 16-ounce packages in the fall of 2014 at a $4.99 price point -- and that's when things really took off," says Ackerman.

From 20 retail stores in 2014 to 1,000 in 2015, Birch Benders is now sold in over 6,000 stores nationwide, including Target, Sprouts, and Whole Foods Markets.

The company currently produces 15 varieties of pancake and waffle mixes, including seasonal flavors like pumpkin spice and sweet potato and conventional non-GMO flavors. The conventional line is a new addition offering cost-effective packages in five flavors: Original, Buttermilk, Chocolate Chip, Six Grain, and Protein.

"We developed our $3.99 retail package with Safeway shoppers and conventional buyers in mind," Matt explains. Birch Benders has done well in the natural foods channel, and Ackerman and LaCasse are ready to compete with mainstream brands by offering competitive pricing on a product that remains focused on clean ingredients.

Challenges: "As we get into larger retailers, the slotting fees are going to be tough to handle," admits LaCasse, noting that this is a difficult hurdle for any small company.

Opportunities: Birch Benders does well in the natural foods channel, and LaCasse and Ackerman intend to continue innovating in that market. This year, though, the most robust opportunity is making a mark on mainstream consumers, by growing a conventional line that appeals to a broader customer base.

Needs: Equipment and space. "Because we use co-packers, we don't have the traditional needs other companies have," says LaCasse. But he adds, "Capital is a universal need for all companies.

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