- Refrigerated Greek yogurt bar brand Clio Snacks closed an $8 million funding round led by long-term investor Alliance Consumer Growth (ACG) and participation from AF Ventures.
- The snack bar brand doubled its sales over last year and saw 57% growth in distribution through expanding its current deals with Whole Foods, Target and Wegmans.
- The company did not say what it will do with the funding. Jordan Gaspar, president and managing partner of AF Ventures, said the private equity firm is “uniquely qualified to support the expansion of Clio's cold-chain footprint.”
Clio positioning itself as a functional snack bar that is indulgently better-for-you aligns well with trends in the food space today. The five-year-old company packs 8 to 9 grams of protein and a host of probiotics into each of its Greek yogurt bars, which is then wrapped in dark chocolate. This combination has not only inspired growth courtesy of consumers looking for a bite of indulgence that is a little bit healthier, but it has also gained the confidence of investors.
"The brand has found the perfect balance between indulgence and better-for-you consumption, which is evidenced by its impressive growth in terms of distribution and performance on-shelf,” Julian Steinberg, co-founder and managing partner at ACG said in a release.
The better-for-you bar space is becoming crowded with heavyweights. In 2017, Kellogg bought RXBAR for $600 million and Mars Wrigley took a minority stake in healthy-snacking company Kind. While Clio may not have the reach and brand recognition of these major players, it has not stopped investors from betting on this startup's success.
This bar also stands out because of its positioning as a refrigerated snack. Shelf-stable bars remain the dominant option on grocery store shelves today, but major plays are beginning to migrate into the cold cases. Mondelez, citing data from Mintel, said the refrigerated snacks segment generates $20 billion in annual sales and represents one-third of the total U.S. snacking market. Perfect Snacks was the first big brand of refrigerated snack bars, starting to manufacture its organic, non-GMO, nut butter-based protein bars and bites in 2005. Mondelez took a majority stake in the company last year. Last year, Kind launched a new refrigerated nut butter protein bar. Brands including NuttZo and OHi also have refrigerated bar offerings, though most of these have nut butter as a key ingredient, not Greek yogurt or any other dairy product.
While the refrigeration of the Clio bar makes it stand out, it can also limit its appeal. Consumers who are out and about for long periods may opt for products that are less likely to melt. At the same time, more people staying at home because of the pandemic may also help further drive sales, since melting is unlikely to be an issue when traveling from the fridge to the home office.
Clio also straddles the line between snack food and better-for-you desserts, allowing the brand to capitalize on these two popular segments. Junk food with a health halo has gained popularity in recent years, with consumers looking for healthier, cleaner-label versions of familiar treats. A study from the NPD Group showed that snack food consumption increased 8% in April as consumers stocked up primarily on frozen sweets along with salty snacks.
If Clio can capitalize on this trend, it will be on a clear runway to growth. However, to continue expanding at a rate close to the 100% year-over-year growth the brand experienced last year, the company will need to increase its distribution network as it works to gain more retail partners. But as a smaller startup, Clio may be better equipped than its bigger competitors in the refrigerated bar space to pivot and respond to consumer demand with innovative offerings.