Kind CEO aims to reach more consumers, bring the brand to other parts of the store

Kind has firmly entrenched itself as a leader in the snack bar space since its founding nearly two decades ago. But the brand, which was purchased by Mars in 2020 for an estimated price tag of more than $5 billion, has moved rapidly beyond its core bar to become a broader snacking company. 

Since the beginning of 2020, Kind, which prioritizes the use of plant-based, nutrient-dense ingredients in its foods, has expanded into refrigerated items, chocolate, soft granola, cereal bars and frozen bars. Sales totaled about $1.7 billion in 2021, according to the most recent data supplied by the company.

Still, Kind hasn’t been immune to inflation and supply chain challenges that have impacted other companies in the food and beverage space. 

The brand is currently found in an estimated 20% of American households.

Food Dive recently spoke with Kind CEO Russell Stokes about the health of the brand, what categories it’s looking to enter next and how consumer buying habits have changed recently. The interview has been edited for brevity and clarity.

FOOD DIVE: How has the Kind brand fared recently?

RUSSELL STOKES: The last 13 weeks have been the most intense that I’ve seen so far in our business. You do a little bit of reflection over the break at the start of the year. There are two really, really interesting things that are going on with all of us as consumers right now. And one of them is an old story that continues and one of them is a new story. 

So for me, the old story that continues is … and all of the health and well-being trends that Kind has been focused on since 2004 are still there. …And the other one is what I call the new occasions. And that’s the one that’s a bit different. I think COVID and inflation, and some of these things have started to shape occasions for the stuff that we make in an interesting way. …That overall health trend is shaping all of the growth that we see in the categories that we play, and shaping much of our activities as well as.

How are sales recently at the Kind brand?

STOKES: I can’t share financial details, but I can share what you see in scanner data, for example, so our business was up double digits in 2022. And that was on the back of 2021, which was also up higher double digits as well.

For businesses of our size, I think we’ve shared publicly that we’re in the ballpark of a billion dollars of sales, we consider that to be a very attractive growth rate. And more importantly, we’re focused on serving more North American families as well. …So for Kind to realize its purpose of helping people make new kinds of choices for their bodies, it needs to be relevant for more and more households as well. So we’re very focused on growing the base of consumers that use our brands as well. We’re excited about some of the progress we’re making there.

What are you seeing with shopping behaviors? Have you noticed any changes with consumers?

STOKES: We saw shopping behaviors change. We are seeing fewer trips, but they’re larger basket sizes. And I think part of that is when I talk to shoppers on the shelf, when our teams do their quantitative research, we’re seeing there are fewer trips, more stock-up behavior, but also don’t forget we’re going through a period of pretty intense inflation.

American households have been hit pretty hard by that over the past year, but I think all of those things have come together to shift pack sizes a bit larger. We’re seeing a lot of demand for what we call value packs, 20-plus bars per pack, which is obviously the most economical way to get into the product. It’s been a big focus of our packaging innovation over the past year while we all deal with higher input prices. We try and pass the minimum costs along since again we’re focused on growing the base.

But it comes with a big but. I want to make sure that we’re growing the accessibility of the brand as well. It’s no good selling just massive packs to a small portion of the population. We need to make sure we also keep entry points into the category with innovation, some of those smaller pack sizes.

Have you been able to grow points of distribution for the Kind brand? Is the healthy snacking trend showing any signs of slowing down?  

STOKES: We see continued upside on distribution. Kind is a relatively well-established brand [with] our size and scale. We’re available in many, many places. I still think there are a lot of places where we can continue to push. Again, the benchmark is, I don’t want to use a judgmental word, but “regular snacking.” I still think healthy snacking has a ways to go.

When I talk to our retail partners, they’re really excited about what that does, both in terms of their own brand, and healthy options that provide interest to their shoppers. So there are plenty of spaces where we’re seeing distribution expand.

We still see simple things, like geographic disparities, even a brand the size of ours, there are parts of the U.S. where our brand is highly penetrated and parts where the penetration is much lower. That could be a consequence of consumer tastes. … I look at that and say, if you take a fast-growing part of the country, like maybe the Sun Belt, there’s no reason why Kind penetration shouldn’t be at the same level as our national penetration. But for whatever reason, it’s not. So that’s a great opportunity.

Penetration doesn’t move rapidly overnight. But we thought we saw some positive progress last year, a lot of it driven by innovation. … We’re not trying to splurge on a lot of new ideas. But when we get a great new idea, like Kind Cereal Bar, we find that it will bring a new consumer into the brand that maybe wouldn’t have been brought in by the existing products that were on the shelves.

Are you planning to implement additional price increases? What is the appetite among retailers and consumers who are seeing prices go up for food, beverages and other everyday items for more hikes?

STOKES: I don’t think most people that grew up in this country or another developed economy are used to dealing with price changes like this. When we start with our penetration philosophy, we want to make the brand more accessible. And the way I see it in a normal year, it’s our responsibility to try and generate enough productivity in our operation so that we can deal with regular inflation without having to pass price increases to our retail partners.

I think that the category pricing, you think about snack bars, healthy snack bars in general, overall price increases of about plus 10 [in 2022], we did plus eight. We managed to deal with some of the cost pressure that we were getting. With efficiency, we’re also able to innovate some bigger pack sizes that I think helped with our heavier users. … No plans right now, to do more [price increases].

We’re still facing a lot of cost pressure just to be transparent. But we’re working hard in our supply chain operations to try and generate as much efficiency as we can to try to offset that.

The Kind brand moved into the frozen section in 2019 with the debut of frozen bars. How is that going so far?

STOKES: The bar is phenomenally successful. It has double the repeat rate of any other product in the frozen aisle, so we think we have a winner there. We’ve been focusing a lot on a narrow set of customer relationships where we were putting the product in the right place. And we’re seeing really nice growth in velocities.

We’re taking a more patient approach to growth around the bar before we innovate much more radically. We discontinued the [frozen] pints offering. It’s such a crowded space with many brands and products on the shelf, but we don’t see anything else quite like our frozen bar today.

What’s next for the Kind brand? Do you have any plans to extend Kind into other parts of the store?

STOKES: We have some really interesting ideas around other places that we can go. It’s more about what are some of the consumer occasions we might not be touching today. … Where can we take the Kind promise somewhere else?

It’s really important that we don’t get arrogant about it because the Kind promise, the brand generally means that we can convince many people to try the product one time. But, of course, to be successful, it has to be better than the other options on the shelf to drive that repeat [purchase.]  We’ve looked at almost every category.

We’ve looked at a lot of them and there’s, I would say, four or five, that we’re kind of zooming in on that we think that there’s something that we can do to bring delicious and nutritious to a new category. It would be unfair of me to say what those four or five are because we’ve got a lot more work to do.

I think that there are things we can do in savory categories in ambient sections of the store that still start with whole foods, fruits, seeds, vegetables, but do what we’ve always done, I think better than other people, which is delicious, and nutritious. You know, we’re not promising instant results. It’s not a diet product. It’s a delicious product, which is nutritious. And that’s the mantra that we’re using to try and tease out which of those four or five do we want to take. There’s so much growth potential still left in the core of the business.

We’re also going to be bringing our mission of ‘healthy and tasty’ to life for consumers to experience beyond our product with really fun activations this year. We just brought back our Secret Kind Farmers Market to New York City for folks to shop fresh, whole ingredients like vegetables, nuts and grains for free, and the market will be in Houston on March 11th.