Match Made in Heaven
Here’s how Eco-Heaven LLC and Fantasy Cookie work with each other to produce and sell natural, organic and eco-friendly cookies and healthful snacks to all types of consumers.
By Dan Malovany
Once upon a time in Southern California not long ago, Tom Mosk and Joe Semder came up with the ambitious idea of creating not only the best cookies “in” the world, but also the best cookies “for” the world.
At that time, it was 2006, and the concept called Eco-Planet seemed like it was pure fantasy, even in the world of natural food products in this day and age. In addition to being organic, the animal cracker-style of cookies and non-dairy Cheddar cheese crackers are made using ecologically friendly production techniques and packaged in 100% recycled paperboard designed using soy-based inks.
As the name implies, they are better-for-you products that also are better for the Mother Earth.
“We wanted to come out with a brand that was organic and sent a message that ‘you can help change the planet. You don’t have to wait for the government to do everything,’” says Semder, president of Fantasy Cookie in Sylmar, Calif.
It wasn’t the first time that Semder, who developed the products, and Mosk, a 30-year-veteran of the natural foods industry who sold them, developed something that seemed a little bit ahead of its time.
In the late 1980s, long before energy bars become popular, function foods emerged and clean labels became the rage, the two pioneers in the healthy snack arena created an all-natural line of fruit juice-sweetened cookies sold under the appropriately named Heaven Scent brand because they tasted less “earthy” and more like they came from an unworldly place, Semder says. It just took consumers – and the industry as well – a few years to catch up with the idea.
Likewise with the Eco-Planet brand, what appeared like it was a bit on the fringe just a short time ago has found itself on the forefront of some of the hottest trends in the natural foods market.
During the past three years, for instance, the nation’s largest retailers as well as a legion of other companies have jumped on the ecological bandwagon, embraced sustainability and gone green as consumers increasingly consider environmental accountability from the businesses whose products they purchase. It doesn’t hurt that Eco-Planet products push almost every politically correct button for promoting natural foods. The cookies and crackers are organic, vegan, non-dairy, Kosher and free of genetically modified organisms (GMOs). Moreover, they’re reduced fat and contain no trans fats or cholesterol.
So intriguing was the idea of earth-friendly, organic snacks that it struck the fancy of a Los Angeles investment firm called BearTree Partners LLC, which was looking to enter the health food industry and, subsequently, purchased Eco-Planet and Heaven Scent businesses in 2007.
Following the acquisition, BearTree formed a new company called Eco-Heaven LLC, which has taken over all sales and marketing for the two brands. Doing so has allowed Semder and his brother, Rich, an executive vice president at Fantasy Cookie, to hone in on developing and contract manufacturing a variety of better-for-you cookies and other baked goods, which had become an increasingly larger part of its business over the years. In fact, Joe Semder notes, 80% of its volume comes from organic, fortified and all-natural products for an increasingly diversified customer base.
“Owning and baking one’s own brand widens the scope of concentration,” he says. “Baking for others means we get to focus and concentrate on formulation, efficient production and raw materials. The entire marketing side of the product is eliminated.”
A World of OpportunityAs with many contract manufacturing agreements, Eco-Heaven monitors sales and inventory and places orders with Fantasy Cookie every week or so. The bakery also keeps three to four weeks of inventory on hand to ensure that the pipeline for the Heaven Scent and Eco-Plant brands remain full.
Because of their shared history, however, Eco-Heaven and Fantasy Cookie have more than a conventional co-packer/client relationship. Both companies work closely together in the continued evolution of Heaven Scent and Eco-Planet lines, the latter of which saw sales climb 150% last year as Eco-Heaven expanded distribution, increased promotional efforts, redesigned its packaging and, most recently, rolled out new products.
“We have a true partnership from a production perspective and what we do from a marketing side,” notes James Sego, president and owner of Eco-Heaven. “We’re constantly talking [about] where we want to go next. What’s the next new product? How do we want to market the product and promote the product? Joe has been involved with all aspects of our business, and that’s a big difference from most co-packers.”
Previously, the two brands were primarily sold in natural food stores and supermarkets throughout Southern California and in parts of metropolitan New York. Since its purchase, Sego and Eco-Heaven have put together a network of channel-specific brokers who have broadened distribution nationally and in select international markets such as parts of Mexico, Canada and the Middle East.
“Our success is driven by a comprehensive go-to market strategy, employing multiple brokers targeted at the major retail channels, a solid promotion strategy, and, of course, the product itself,” says Sego, a food industry veteran and former head of Lincoln Snacks who was hired by BearTree Partners at the time of its acquisition.
Historically, the brands’ main avenue of distribution has been in major natural food stores, but that’s changing. Last year, Eco-Heaven rolled out a variety pack of Heaven Scent’s most popular selling products that proved to be a hit in one warehouse club chain. It’s also targeting the all-natural and organic food aisles that have emerged in many traditional retail outlets in recent years, Sego explains.
“We will continue to innovate so that we can grow that core business while at the same time targeting traditional retailers and mass merchants that are embracing the organic arena,” he says. “For us, growth is driven by our core business and the traditional retailers.”
Upon taking over the business, Eco-Heaven redesigned the packaging of the two brands to sharpen their positioning in multiple channels of distribution.
“We dramatically changed the Heaven Scent premium cookie packaging so that it would literally jump off the shelf,” Sego notes. “We made some subtle changes on Eco-Planet that allow the consumer to more easily see the different flavors. The impact has been well received by both the consumers and retailers.”
Over the last year, he adds, Eco-Heaven has targeted the bulk of its resources more toward the high-growth potential for the Eco-Planet line because the brand is so unique. However, it also has put significant efforts in revamping the more indulgent, all-natural portfolio of Heaven Scent products.
Available in Natural Vanilla, Cinnamon and Vanilla flavors, Eco-Planet Organic Cookies are packaged in 1.5- and 6-oz., traditional animal cracker-style boxes. To reinforce the brand’s support of renewable choice energy, the certified-organic products come in four unique shapes, including a sun that represents solar energy, a globe to appear earth friendly, a windmill that signifies wind energy and a green car for hybrid automotive technology.
On its packaging and Web site, Eco-Heaven explains how consumers and businesses can be better stewards of the environment. In fact, the company is a member of the “1% for the Planet” organization, which is a coalition of businesses that donate a portion of their sales to the natural environment.
Moreover, a logo on its packages promotes that its Eco-Planet and Heaven Scent products are made using renewable wind power energy. The company purchases wind energy credits that allow it to make this claim.
“We’re living and breathing what’s on the package,” Sego says.
Eco-Planet’s 100% recycled packaging also is made from 75% post-consumer material, which means three-quarters of the box had been in a consumer’s home at some time, then put on a curb and recycled, he adds.
“If I could find 100% post-consumer packaging, I would buy it, but nobody makes it at this time,” he says.
The strategy is to leverage its eco-organic image on more than one level, but to do so in a way that promotes the product to all ages.
“We play in a natural world, and the world is getting greener and eco-friendly,” he explains. “As we came out with Eco-Planet and noted it was launched with 100% wind power, we got some positive feedback from consumers and customers, so we thought why don’t we take that same concept and do that with the Heaven Scent cookies.”
A World of New IdeasOrganic may still be a niche, but it continues to grow at a rapid level, which can be significant for a smaller player of Eco-Heaven’s size.
To expand sales, the company relies on on-shelf merchandising and in-store sampling to encourage consumer trial. Around Earth Day in early April, for instance, the company organized an end-register campaign where merchandisers in the Southern California natural food chain handed out samples of its Eco-Planet cookies, which were available for impulse-sale at the counter. The lift in sales, Sego notes, can be as much as 10 times as normal sales during the month.
“It’s not a price point-driven event,” he says. “It’s a sampling event.”
Although Eco-Planet products have a 12-month shelf life, they are shipped six cartons to a case instead of the more conventional 12 boxes to a case to improve the turnaround component and ensure freshness.
“Even though there is a cost component, we feel [the six-pack cases] are very important pieces for us to maintain because we’re a smaller player in the marketplace,” Sego explains. “As we grow, we’ll certainly evolve into a 12-pack case.”
Additionally, the company offers ready-built displays that can be opened by personnel at the store level.
This year, new products are playing a a part in expanding the Eco-Planet brand. In addition to rolling out a gluten-free, hot cereal, Eco-Heaven is working with Semder and the bakers at Fantasy Cookie to introduce an Eco-Planet Milk and Cookie product, in which one 30 g. serving has the same amount of Vitamin A, D and calcium as an 8-oz. glass of milk.
In their research, Semder and Sego discovered that 60% of the population doesn’t get its recommended daily intake of calcium or they are lactose-intolerant and are forced to drink soy milk. Eco-Planet dairy-free Cheddar cheese snack crackers also are for lactose-intolerant shoppers.
For convenience, the cookies will come in single-serve pouches that can be easily placed in school lunches. For shelf appeal, the prototype features the pouches packaged inside a half-gallon milk carton to reinforce the image of the milk and cookies concept.
“We want moms to feel good about their kids having a great-tasting treat, and it still provides a healthy nutrition base for them as well,” Sego says. “If it doesn’t taste good, no matter how good it is for you, the consumer is not going to eat it.”
Developing the product took time, partly because the ingredient technology wasn’t readily available. Semder notes that Fantasy Cookie finally located encapsulated supplements that provided the right amount of nutrition, didn’t have a gummy flavor or texture and tasted like conventional cookies in the end.
“We finally got our lab verifications back that we have exceeded our goals of getting the nutrition of an 8-oz. glass of milk into a serving size of cookies, and that’s how we get milk into cookies,” he explains.
Fortification, Sego adds, will be integral to expanding the healthful image of the Eco-Planet brand.
“People are looking for better nutrition in everything they eat, and that’s been one of the tickets to our growth,” he says. “People are looking to put healthier ingredients into their bodies.”
By partnering with Fantasy Cookie, Sego notes, Eco-Heaven plans to significantly expand its sales by creating innovative products in categories that will drive distribution into new channels and new customers.
“Where the real wins will come from is finding a niche that has not yet been exploited,” he says. “Then, how do we take Joe’s expertise in baking a great cookie and combine that with the niche in the marketplace that hasn’t yet been filled?”
In the end, the answer to that question could result in a match made in heaven for years to come.
Editor’s Note: Go to www.snackandbakery.com to read more of SF&WB’s feature articles.