Key to competing with General Mills and Kellogg’s? 'If you don’t bend, you break’, says WaffleWaffle CEO.
The waffle snacks producer has experienced a growth rate between 200% and 400% annually since it started almost nine years ago, but Rockwell said his company’s mentality has always been “partnership before product."
“We take great pride in our products, but we’re more proud of our partnerships with retailers, such as the one with Whole Foods,” he said. “The result is that we grow much faster than other companies.”
Those retail partnerships, Rockwell added, have “naturally led to the evolution of the brand, which now not only includes Liège-style sugar waffles, but also waffle crunchers and stroopwafels.”
In terms of establishing partnerships with retail customers, Rockewell said there are several important components.
“The first one is transparency; second is communication; third is flexibility; fourth is speed; fifth is quality, which to us means transparency; and the last one is innovation through collaboration.
“When we bring products in, we don’t say this is our final result. We bring in products as canvases. We offer to create the art together with the retailer, whoever that retailer may be,” Rockwell said.
“We’re not a big company, and because we’re playing in the arena of the largest manufacturers in the world like General Mills and Kellogg, how can we navigate around their grip? If you don’t bend, you break,” he added.
Penetrate various channels
How has WaffleWaffle customized its products to fit in various channels over the years, as the brand is now available from Whole Foods to Walmart and 7-Eleven stores across the US?
"What is happening today is that waffles can be a snack or dessert."
“Mass and grocery can take many more products because they have freezers in the back and they let people stock their shelves,” Rockwell said. “In c-stores, it’s much more grab-and-go oriented. There is lower term on a per-store basis because they are much smaller, so we have to create packaging that’s [suitable for] shelf-ready displays, or smaller pack sizes.”
Rockwell believed penetrating into multiple channels can turn waffles into an everyday item for American consumers.
“I think the way to educate American consumers who have been used to a certain diet is to have them try the product. Offering waffles on airlines, for example, can reduce the educational barrier because the prices are included in the fare,” he said.
“Here in the US, waffles are traditionally a breakfast item that you put syrup on. What is happening [today] is that waffles can be a snack or dessert. We can also do sandwiches as a meal,” Rockwell added.
WaffleWaffle is targeting a wide range of categories, such as frozen, bakery, dry grocery, and behind the counter in the foodservice.
Benefits from Amazon-Whole Foods acquisition?
Rockwell said major retail chains such as Walmart and Costco are starting to take what Whole Foods is good at: finding local, smaller brands that represent something of quality, whether it be organic or natural, or something of less processed.
“Amazon's acquisition gives Whole Foods the cutting edge as far as the product procurement, foraging different types of quality items, but it also gives them a unique point of distribution, which is e-commerce,” he said.
“Whole Foods is always known for small innovative brands like us, and that is how we got started. But they don’t necessarily have the reach that Walmart has, nor the buying power. With Amazon, Whole Foods can still do what they are good at, but they can have the buying power of the largest e-commerce platform in the world.”
However, Rockwell said he is unsure whether the acquisition will eventually benefit his business even though WaffleWaffle is available through both platforms.
“To be determined… but there should be an integration between what’s on their shelves and what’s on their e-commerce platform,” he said. “If our products in Whole Foods somehow become a higher rank on Amazon, it could help."
“One thing that helps consumer products is that Whole Foods is lower in margin ... if they lower their margin and increase their volume, the product will be at a lower retail to the consumer, and hopefully [that could] build volume for not only Amazon and Whole Foods, but for the suppliers,” he added.
Rockwell said WaffleWaffel is expected to reach $12m sales by the end of 2017, and over $20m in 2018.
