Dive Brief:
- RXBAR is introducing a nut butter spread lineup this spring, the company’s first product expansion since it was acquired by Kellogg for $600 million last fall, according to the Chicago Tribune.
- The new RX Nut Butters will make their debut this week at the Natural Products Expo West show in Anaheim, California, and will be sold in three flavors — peanut butter, peanut butter honey cinnamon and almond vanilla. The products will be sold in 10-pack sleeves of 1-ounce single servings. RXBAR CEO Peter Rahal told the Chicago Tribune they are intended to be a “snacking condiment.” Multiple-serving jars will be introduced at a later date.
- RXBAR also is planning to move its headquarters next month to a bigger space — nearly five times its current size — to another location in Chicago. The new building will support the company’s projected growth. Since the Kellogg deal was announced last October, its workforce has doubled from 70 to 140 employees. It is expected to reach 240 employees by the end of this year.
Dive Insight:
A few months after Kellogg acquired the Chicago Bar Company, which manufactures RXBAR protein bars, the clean label brand is primed for expansion beyond its flagship product. Nut butter seems like a logical venture considering RXBar’s familiarity with nuts — almonds, cashews and peanuts are among its signature few ingredients.
RXBAR also has successfully entrenched itself in the growing snacking space, targeting health-conscious, clean-label and on-the-go consumers. RX Nut Butters will further solidify this positioning.
For Kellogg, this introduction fits one of its biggest objectives in growing its presence in the snack category, particularly as cereal sales decline. Steve Cahillane, Kellogg's CEO, recently said on an earnings call that his company has transitioned to “much more of an innovative snacking business,” calling the RXBAR acquisition “a cherry on top.”
RX Nut Butters will add another layer of competition in the growing category, which is currently dominated by Justin's nut butter line. About a year after natural nut butters were identified as the top trend from the 2015 Natural Products Expo West Show, Hormel Foods took a chance on Justin’s, buying the brand for $286 million in May of 2016. The brand swiftly experienced double-digit growth, according to Food Navigator, and has since expanded into single-serve pouches and confections.
Interestingly, RXBAR’s acquisition experience also is similar to Justin’s in that the founders insisted on relative autonomy from their new owner and, at least so far, have been granted their wish. With RXBAR’s new space nearly 200 miles from Kellogg’s home in Battle Creek, Michigan, that won’t likely change anytime soon. Nor should it need to: RXBAR had its nut butters line in the works prior to the acquisition. As bigger companies look for innovative, nimble startups to diversify their own portfolios, this hands-off approach so far seems like a winner.