UK-based snack bars producer Eat Natural has just taken the plunge into the breakfast market with the launch of a range of mueslis. The company’s co-founder, Preet Grewal, realises it’s a tough nut to crack, boasting strong and established competition, but is relishing the challenge. Dean Best met with him at the company’s Essex HQ to check he’d had a good breakfast.
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Growing up, we’re always told that breakfast is the most important meal of the day.
That, perhaps, is no more true than for Preet Grewal, co-founder of UK snack bar firm Eat Natural. Grewal, fellow co-founder Praveen Vijh, and the rest of the Eat Natural team have just overseen the company’s move into breakfast cereals, a venture that they hope will build on the success of the Eat Natural snack bars, which have helped build a brand now worth GBP28m (US$51.2m), a decade after the company was born.
The move into the breakfast category is not without its challenges. UK consumers continue to skip breakfast with regularity, the breakfast business is relatively mature – certainly compared to the nascent snack bar business that Eat Natural first entered – and the company will be going up against some of the most established brands in the packaged food market, not to mention more direct adversaries in the good-for-you breakfast segment such as Dorset Cereals.
Nevertheless, Grewal is in an upbeat mood about the launch into breakfast when speaking to just-food at Eat Natural’s Essex factory, or as the company affectionately calls it, the “makery”.
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By GlobalData“It’s going to be very difficult, no a shadow of doubt. We have no illusions that we are just going to walk in there and suddenly transform the category,” Grewal says of the move into the breakfast market. “It’s going to be a struggle but it’s one that we’re looking forward to because we are very proud of what we’ve produced and we think it is very different.”
Eat Natural’s breakfast range of four toasted mueslis does offer something different, including unusual ingredients like Cape gooseberries and toasted buckwheat. Grewal believes the ingredients will win over consumers and that the products will bring some excitement back into eating breakfast. “The problem with breakfast is that it becomes a bit mundane, so you are more happy to miss it,” he explains. “Hopefully the idea is to produce something where people will want to spend the extra five minutes and have it before they go.”
In a crowded category, Eat Natural is hoping to stand out from its competitors by offering consumers an indulgent product that is naturally healthy. Much of the innovation in breakfast cereals focuses on oat- and granola-based mueslis, Grewal says. “Indulgent taste with natural health… hasn’t combined. In this sort of granola, muesli mix type area, it’s becoming a bit me-too-ish. We felt that we should do something exciting there and this range targets that.”
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| Eat Natural co-founders Preet Grewal(l) and Praveen Vijh(r) |
The range has been two years in the making, during which time the likes of Dorset Cereals have become firm fixtures among upmarket muesli brands. Dorset’s recent change in ownership could mean a more powerful rival for Eat Natural but Grewal seems unworried about the competition. “Provided we in ourselves are happy that we like what we are producing, compared to whatever else is out there, then we are relaxed,” Grewal says. “Horses win races and jockeys lose them – at the end of the day, we think we are riding on a good horse.”
Grewal’s quiet confidence must come from the company’s initial success in snack bars. The business, built from scratch, now exports bars to around 20 countries, with major markets in western Europe. Eat Natural’s first major listing was in fact in the Netherlands thanks to a keen, if rather gluttonous, buyer at Ahold – “he sat and ate eight bars one after the other in front of us” – and the company then won listings in the UK, as demand for healthier and more natural products started to take off.
Retailers may have snapped up the snack bars but how will Eat Natural’s breakfast range fare in a crowded category and in a climate of tension between supermarkets and suppliers over price? Grewal says that, like the rest of the industry, Eat Natural has seen its ingredients costs soar but does not foresee rising costs forcing up the retail price.
Pitching the range at the right price was a tough judgment call for the company. While GBP2.99 will probably seem a little pricey in comparison with some of the mainstream cereal brands, Grewal points out that there are plenty of specialist mueslis selling for considerably more.
At GBP2.99, he believes the company hits a price point which reflects the premium nature of the product and the specialist ingredients but which also offers consumers value in the context of the healthier cereals category. “There are a number of other premium-end mueslis out there that are selling at GBP4.99 or GBP5.99, and some even higher in more specialist stores, and we think that we have a happy medium between price and that quality that they probably pertain to be. What it isn’t is just dried fruits and nuts and oats, mixed up and put into a bag,” Grewal says. “Ultimately, we think it’s priced right. We think it’s a very, very good price for what it is and we’re not greedy in terms of our margins.”
But will consumers be ready to buy cereal at even GBP2.99 a bag in these times of anxiety over the economy? Grewal thinks so and believes that consumers, as they tighten their budgets, will eat outside the home less often, and transfer that spending to products they can eat at home. “Where as you could buy a coffee and a croissant that could cost you three quid, you could buy a whole cereal for three quid that could last you a week-plus. We actually think that it might work in our favour.”
Nonetheless, the launch into breakfast is a significant step for a company like Eat Natural. Born just over a decade ago and focused predominantly on making snack bars, a move into a brand new category will present a new set of challenges for the business. “This is a big, big move for us. This is going to take a lot of energy,” Grewal says.
He best not skip breakfast, then.
