Lupii bars were supposed to have a breakout year. Or, at the very least, be something people might have heard of.
Early in 2020, Lupii’s founders, Alexandra Dempster and Isabelle Steichen, introduced the small and chewy protein bar, made from lupini beans and in flavors like Peanut Butter Cacao Nib and Tahini Lemon Cranberry. Success came early, with the bars landing in a handful of specialty and independent grocery stores in New York City, yoga studios and even the pantries of New York tech start-ups like Foursquare.
The snack start-up was on the verge of a deal with a distributor that could put its bars on grocery store shelves all over the country. But Lupii’s big moment was sidelined by the coronavirus pandemic.
Instead, the two women were left with pallets of Lupii bars stuffed into the corners of their small New York City apartments, wondering what to do with them. “How do we get this product that no one has heard of into the market?” Ms. Dempster asked.
If there was one thing that united Americans during the pandemic it was snacking. Already growing at a rapid clip, the multibillion-dollar snack industry exploded over the past year.
This was a boom for the food giants. Mondelez sold $1 billion more Oreos, Chips Ahoy cookies and other snacks in North America last year. Likewise, Frito-Lay North America, part of PepsiCo, sold $1.1 billion more Doritos, Cheetos, Tostitos and other snacks.
But for snack start-ups, 2020 was a year of struggle. Those hoping to be discovered, to find their way into lunchboxes a few years from now or be the next big hit, like the Kind bar or Popchips, found that the paths taken by many other successful snack companies were suddenly shut down.
The highly coveted pantries, or micro kitchens, of Google and Facebook went dark. Food fairs around the country, where start-ups vie for the attention of buyers from Whole Foods and other retailers, were canceled. Places that frequently stock new and interesting snacks, like the Equinox gym chain, yoga studios and even airports, closed. And small specialty grocers in places like New York, San Francisco and Los Angeles cleared what were seen as luxury treats from their shelves to make room for essentials like toilet paper and beans.
In March of 2020, SMPL, a line of bars containing supplements to improve gut health, raise energy levels and promote calmness, was set to expand nationally to retailers like Urban Outfitters and Bloomingdales, with the possibility of landing in supermarket chains, said Ellis Fried, the chief executive.
“Overnight, 80 percent of our doors closed, and all of our purchase orders were pulled,” he said. “We had to furlough our first sales manager three weeks after we hired her.”
The process of new snack discovery may have changed in the last year, but companies — whether large corporations or small start-ups — believe that consumers will continue to seek new and interesting treats.
“Broadly, over the last few years, the incidents of snacking have risen in general because before the pandemic people were living busy lives, and we expect that to continue post-pandemic,” said David Lafferty, who leads the merchandising team for snacks and candy for Whole Foods.
Perennial visitors to some of the country’s largest food fairs, the Whole Foods team continued to search out interesting and on-trend snacks even as those fairs were canceled, Mr. Lafferty said. Instead, it conducted “virtual tastings,” a sort of snack speed dating: New companies sent samples and then got online to share their stories as Whole Foods executives nibbled.
While America kept devouring Oreo cookies and Lay’s potato chips, the food monoliths are aware that tastes are changing, that the market has become increasingly fragmented and that many consumers want healthier or even so-called functional snacks that do more than simply taste good.
PepsiCo, which has 23 snack and drink brands that sell more than $1 billion each year, bought the fruit and veggie snack maker Bare Snacks in 2018 and, the next year, the maker of PopCorners snacks.
Mondelez has gone a step further, creating a whole division in 2018, SnackFutures, to invent snacks and hunt for and make investments in start-ups. This summer, SnackFutures will run a 12-week program where nine start-ups that are looking to expand will each receive $20,000 and assistance and advice from Mondelez executives.
But getting enough traction to be noticed by retailers, let alone the food giants, was tough for start-ups. For many, the avenue to consumers turned out to be not through Google’s micro kitchen or Equinox’s gyms but, rather, through the living room. Shoppers, stuck at home and frustrated with limited selections at grocery stores, scrolled through Instagram, Snapchat and other social media accounts to find new snacks, a shift that many experts say is here to stay.
Even the giants jumped on the trend. Last May, in just 30 days’ time, PepsiCo created a website, Snacks.com, where consumers can mix and match snacks to be delivered to their home.
“What’s fascinating is all of the data we’re getting out of it,” said Michael Lindsey, the chief growth officer of PepsiCo North America. “By letting consumers pick their own mix, we’re seeing new pairings that we hadn’t thought of, like Bare apple snacks and Flamin’ Hot Funyuns.” PepsiCo is likely to use the data to create new multipacks for stores.
But for start-ups with less money to throw around, the idea of quickly shifting strategies from selling to stores to selling directly was daunting. Some built websites practically overnight. Companies that already had websites suddenly had to contend with a flood of orders and no clear delivery plans.
Emanuel Schmerling, the founder of Milkboy Swiss Chocolates, saw huge growth in online sales on his site and through Amazon, he said — but Amazon imposed limits on shipping, so he took over fulfilling online sales.
“For the next few months, me and my wife were up morning to night, packaging orders and making the dreaded trip to the post office every day to drop off the packages,” Mr. Schmerling said.
Another start-up, SnackMagic, entered to help.
Its roots trace back to March of last year, when a food delivery service called Stadium was on track to have its best month ever. Founded in 2018, Stadium carved out a niche for the business lunch where no one can decide among sushi, salads or burgers. Its group ordering systems allowed employees to pick whatever they wanted from a variety of restaurants. Stadium collected the food and delivered it to the office.
The pandemic, and New York City office closures, caused Stadium’s business to evaporate overnight, so a co-founder, Shaunak Amin, and other executives scrambled to find a Plan B. They eventually realized that a number of snack companies were sitting on tons of bars, cookies and drinks that grocery stores and others didn’t want because they were focusing on essential goods.
Stadium had a side business of allowing office workers to throw a snack — a bag of chips or a cookie — into their food order. Now, that would become Stadium’s primary business. Two months later, SnackMagic was allowing companies to send boxes of snacks to people working at home — a treat ahead of a Zoom meeting or simply a thank-you, Mr. Amin said.
When the company started, he said, it had 75 brands and 250 unique items. Now it’s up to 300 brands and 850 items, adding about 10 to 15 applications to get onto the platform each day.
As employees begin to trickle back into offices, the question for Lupii and other companies is: Where are people going to want to try a new snack?
Many are betting consumers will still want novelty at home. Others have said some office micro kitchens are cutting budgets, uncertain how many employees will return to the office on a regular basis.
While Lupii intends to continue to sell through its website and other online platforms, late last year it decided to refocus its strategy on its original plan — to get into stores. The bars are starting to appear on shelves in the New York City area and, by early summer, will be stocked at a large Pacific Northwest retailer, Metropolitan Market.
Lupii is hopeful that as people again emerge from their homes, running errands, or again enter a yoga studio, they’ll need some energy, and that they might decide they want it — why not? — from what the company calls the “small but mighty lupini bean.”