LAS VEGAS — Bobo’s, the manufacturer of the Bobo’s oat bar brand, has been caught between the need to scale to achieve its next phase of growth and a tight supply chain as well as labor market that hindered its progress. The situation forced company management to dramatically change its manufacturing footprint and now the business is set to grow.
“We have been on allocation for two years,” said TJ McIntyre, chief executive officer of the Loveland, Colo.-based business, during an interview at the Winter Fancy Food Show in Las Vegas Jan. 15-17. “We out of stocked about 15% of our revenue last year and, even before that, we had to turn down a lot of opportunities.
“We didn’t launch any innovation, and, in fact, we killed some innovation that had been launched in 2020. We had to make very difficult decisions about what to run and what not to run.”
In October, the company opened a 125,000-square-foot plant in Loveland. Prior to moving into the new plant, Bobo’s had two bakeries and a warehouse. It was a struggle to attract and retain labor, and in 2021 the management team decided to move to a larger facility.
“We have some innovation, finally,” Mr. McIntyre said. “We held off on innovation throughout the pandemic. We held off during the window when we were on deep allocation. Now that that is freed up we have two launches here (at the Winter Fancy Food Show) and we will have another at Expo West.”
The latest new product is a protein bar that is available in two varieties, chocolate chip peanut butter and chocolate chip almond butter, and that is formulated using pea protein along with peanuts or almonds that deliver 15 grams of protein. The bars join Bobo’s oat bars, oat bites, toaster pastries and other baked foods intended for health-conscious consumers seeking a clean label boost of protein while on the go.
“We're innovating inside the categories we are already in,” Mr. McIntyre said. “A massive foot fault I see in the food business, and in natural foods, in particular, is the overextension of brands. I am guilty of employing that kind of an offense in the past. There is a lot of waste in launching products into the marketplace that aren’t going to be there that long.”
In 2023, Bobo’s is planning for sales growth in a range between 20% and 25%, but Mr. McIntyre said the company has “a solid shot at 40% growth.”
“We’re definitely focused on the categories we are in and the customers that we have,” he said. “We’re not as interested in ACV growth as we are in velocity growth.”
Despite the rise in cost of goods sold over the past few years, Mr. McIntyre said the company has not raised prices.
“We see more value in velocity that we can achieve,” he said. “The closer we can inch to Clif and Kind, the greater the long-term value we will create.”