Umpqua - which was launched in 2008 by self-described soccer moms Mandy Holborow and Sheri Price in Roseburg, Oregon, and is now based in Las Vegas – moved into the black in 2010 and is entirely funded from cash flow, Price told FoodNavigator-USA.
“We don’t owe anything and we’re not looking for outside investment. When we started the company I was teaching third grade and Mandy was in HR and we put in $5,000 each and one credit card and we grew the company with our own funds.
“We also have a great partnership now with Honeyville Grains [Honeyville Food Products in Rancho Cucamonga, east of LA]; they roll our oats for us and do our packaging.”
We try and keep them at around 300 calories
Their non-GMO Project verified single serve oatmeal cups - which contain chia and flax seeds, nuts, fruit and custom-milled whole grain oats that take four minutes to cook in the cup and have a distinctive thick and chewy ‘al dente’ texture – are now available in grocery retailers from Albertsons to Kroger, and are also performing well in coffee shops, airports, college campuses, fitness centers, corporate offices and micro markets (click HERE), said Price.
“When we started we thought of this as mainly a breakfast opportunity, but we know that people are eating our products for meals, desserts, afternoon snacks, and post-workout snacks.”
And as meals and snacks star to blur into one for many consumers who are grazing throughout the day, there is a growing opportunity for snack-type products that offer more nutritional bang for their caloric bucks given that they may be consumed as a light meal, said Holborow.
“We try and keep them at around 300 calories or lower, although sometimes they go a bit over, but consumers understand that oats are pretty high in calories, especially when you mix in nutrient dense ingredients such as nuts and seeds. But we also have a ‘Not Guilty’ variety with no added sugar [at 245 calories].”
We picked up distribution in more than 3,000 grocery stores just in the last year
From a channel perspective, said Price, “really anywhere where there is food that you can grab and go is where we want to be.
“We started in specialty coffee shops in the West Coast [where the cups retail at around $3.50] right at the time that Starbucks did, and then launched into grocery [where they retail at $2.29-$2.39]; we picked up distribution in more than 3,000 grocery stores just in the last year – where hot cereals are getting more shelf space as cold cereals sales are declining.
"But we’re also launching pouches for foodservice this year, several new flavors, and new products with ancient grains that are going to launch in the second quarter.
“We also just launched vanilla almond crunch – we were the first ones to combine oatmeal and granola in a cup, where you get that crunch and a chew at the same time.”
There are no fillers
While the cost-per serving might seem high compared with a box of cereal or packet of instant oatmeal in a grocery store setting, Millennials are prepared to pay for a superior product with on-trend ingredients such as chia and flax that’s super convenient, 100% whole grain, made in the USA and non-GMO, she said.
“It’s not mushy like the instant oatmeal you get in packets and there’s no filler, no wheat flour or barley flour added, no mush.”
We hired our CEO Fred DiCosola a couple of years ago and it’s the best decision we ever made
So what advice would they give to aspiring entrepreneurs?
Build slow, run a lean operation, know your strengths and bring in people with expertise at the right time, said Price.
“On the sales side, we were doing fine. But when it comes to running a company, once we got to about $2m in revenue we looked at each other and realized that this is not a hobby anymore.
"We hired our CEO [Fred DiCosola] a couple of years ago and it’s the best decision we ever made.”
Sometimes you have to say ‘NO’
When DiCosola arrived, it was also a time to step back and think more strategically, said Price.
“You can’t sell to everybody, and sometimes you have to say ‘NO’. It’s a really hard thing for entrepreneurs to do, but not all business is good business and not all customers are perfect for you.
“We’re very profitable now, so I’m past the stage where I’m lying awake at night worrying about the business, but I do have a notepad by my bed.”