As natural-food industry grows, small firms need to focus on standing out

BOULDER — There’s a double-edged sword to being in natural foods: although the rise of the industry means healthy, local or organic products are becoming more popular, it also means big food brands are continuously entering the space making it more difficult for  smaller companies to set their products apart.

To fight those challenges, the best thing a small natural-food company can do is show customers who they are and why they make food, not just what they do.

That was the message Blake Mitchell, president of Interact On Shelf, a Boulder-based advertising firm that specializes in the food-and-beverage industry, and Fred Hart, creative director of the firm, shared at a panel during Boulder Startup Week on Thursday.

Boulder is a hub for the natural-food industry, but it’s also much bigger than Boulder, Mitchell said. Countries like Mexico, Japan and England have companies with their own take on trend, with Mexico City in particular having entire bodegas dedicated to health food.

There are several trends on the rise as well, he said, including a desire for transparency on where products come from, freshness, plant-based products and even mindfulness when eating.

But as the industry grows, so does competition, Hart said. That can mean increasing commodification of natural foods. Go to the grocery store and look at coconut water: the packages all are similar, the taste is nearly identical. As companies look to process less and have simpler ingredients, differences in taste become fewer.

So how does someone stand out, if they can’t on taste alone?

“Saying who you are is better than just what you are,” Hart said. “Talk about who you are over what you are to heighten the conversation. Then climb to why you do what you do.”

Companies like Justin’s nut butter have been able to share their brand and mission, standing out from more generic or larger peanut butter brands.

That’s important, as competition in the industry grows.

“There’s an issue with having wolves in sheep’s clothing,” Hart said. “You’re seeing organic Doritos, organic Gatorade. Those bigger brands have more dollars, and if everyone is in a race to the bottom to have clean, natural and organic products, those brands will get there first.”

While their size can be their benefit, it can also be their downfall.

“We should all control our own destiny and part of that is telling our story,” Hart said. “Big Food doesn’t have a story to tell.”

Another trend to expect, he said, is for natural-food brands, like Justin’s, to sell to larger companies, but still keep their mission and focus.

“There’s nothing wrong with partnering with Big Food, as long as you don’t lose your soul,” he said. “If these companies keep their founders and missions in tact, then selling out isn’t bad, it’s a win for all.”