Food Service & Agriculture, Retail, and Small Business & Startups

Firm feeds growing food trend

Noticing a lack of gluten-free options upon celiac diagnoses, brothers create their own snacks.

May 12, 2017
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Gluten Free Bar in Grand Rapids is poised to capitalize on the growing trend for gluten-free foods.

The gluten-free market is expected to be worth $7.59 billion by 2020, with the fastest-growing segments coming from gluten-free cereals, snacks and bakery products, according to projections issued last year.

Marshall Rader, co-founder of Gluten Free Bar, said he believes the growth in gluten-free sales is due to increased diagnoses of celiac disease and gluten intolerances, as well as health and wellness perceptions around a gluten-free diet being healthier.

Marshall and his brother, Elliott Rader, founded Gluten Free Bar after being diagnosed with celiac disease in 2009 and 2012, respectively.

Marshall Rader said there were very few gluten-free snack and bar options on the market at the time of their diagnoses — particularly that both tasted good and offered a good dose of protein — so the brothers decided to create their own.

“We wanted something that tasted great and had a good amount of protein and kept you going for a while,” he said.

The pair founded their company in Chicago, where they were living at the time; they are originally from Grand Rapids.

Elliott Rader said rather than spend a couple of years in development, which is a more traditional approach in the food industry, they decided to dive in by creating a product they could sell first and worrying about packaging and marketing second.

“Our approach was to start making something as soon as possible,” he said.

Gluten Free Bar launched with two flavors of bars that were sold in corner stores and markets around Chicago.

As it expanded to more and more stores, the business soon outgrew the local bakery where the pair first started making the bars, and they began searching for a co-packer to produce the product for them.

Marshall Rader said finding a co-packer didn’t work out and when they were presented with an offer from Meijer to sell their bars, they decided to continue making the product themselves.

They said bringing the business to Grand Rapids made the most sense at that point.

“We decided to do it in Grand Rapids because we are from here and because it made more sense cost-wise to do it here,” Marshall Rader said. “We leased a 3,000-square-foot facility in Ada.”

Gluten Free Bar has relocated twice since coming to Grand Rapids, most recently this past fall, when it moved into its current 28,000-square-foot home at 4053 Brockton Drive SE.

“Every time we’ve moved, it’s been because of growth,” Elliott Rader said.

Today, Gluten Free Bar offers six flavors of its bars and six flavors of its bites, and just last month, the company began making a Power Breakfast that comes in three flavors.

Elliott Rader described the newest product as similar to instant oatmeal.

The products are sold in retail stores across the country, as well as in Canada. They also are available online through Amazon and the Gluten Free Bar website.

“About 65 percent of our business, in terms of overall sales, is in the Midwest and northeast Midwest, and we are expanding out west right now with popular chains like Sprout and Kroger, and we have about 10 percent in Canada. Our website and Amazon sales are about 10 percent of our business,” Elliott Rader said.

The company has a staff of 30, 28 of which reside in Grand Rapids. One person is located in Seattle and focuses on sales in the western United States and in Canada, and the other person is in Missoula, Montana, and focuses on product development.

The brothers say they have big plans for growth.

“We are trying to grow 150 percent by this time next year, and that is through introducing new products, expanding current product lines and continuing to listen to our customers,” Elliott Rader said.

They also hope to expand from 9,000 stores to as many as 20,000 stores in the next few years.

As they expand, their competition is expanding, too.

“Bars are a competitive category today,” Marshall Rader said. “There are probably a hundred brands that have launched since we did, at least 20 of which have a strong market presence.”

He said one thing that continues to set Gluten Free Bar apart is that it continues to produce all of its products at its own facility, which is GFSI, gluten-free and kosher certified.

“You can control the quality, and it helps from a financial standpoint,” he said.

It also presents some challenges, however.

“It’s a lot to manage. That’s why many companies choose to outsource production and focus on branding, marketing and sales,” he said.

It also helps Gluten Free Bar contribute more to the Grand Rapids community, particularly by keeping more jobs local.

“This is part of who we are and we want to have a bigger impact on the community,” Elliott Rader said. “When we first started the company, we had goals around things we wanted to achieve, and we were concerned with hiring local people, offering living wages and recycling.”

The company recently solidified its corporate social responsibility commitment in a big way; it became a Certified B Corp in 2015.

While being a B Corp still has minimal impact on customer purchases, Marshall Rader said retail buyers are aware of the designation and are placing a greater importance on it.

When asked if the ultimate payoff would be to get an offer to sell their business from a major food maker like a Kellogg Company, Marshall Rader said it’s not something on their minds too much right now.

“I think the simple answer is we want to focus on making the best stuff we can make for our customers,” he said. “If something like that were to happen — I think we’d have to grow more — but I think at this point, all options are open as long as we keep making great products.”

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