‘Authenticity’ stressed for natural products

BOULDER — Consumers interested in diet and wellness continue to drive growth in natural and organic products sales, according to local industry leaders.

With such consumer interest, and the trend of consumers to talk about brands on social media sites such as Facebook, brand “authenticity” is key, Doug Radi, senior vice president of Rudi’s Organic Bakery Inc. and president of Naturally Boulder, the local industry trade group, said Tuesday. Radi and other industry executives spoke Nov. 13 at the latest Boulder County Business Report CEO Roundtable, which focused on the natural and organic product industry.

“In the old power structure, a brand tells a story through advertising, and that’s it,” Radi said. “The new way is that the brand tells the story and is authentic. Social media is … absolutely changing the world of branding.”

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With that in mind, it’s important for companies to back up the claims they make about their products, said Blake Waltrip, chief marketing officer at Celestial Seasonings Inc., a Boulder division of The Hain Celestial Group Inc. (Nasdaq: HAIN) based in Melville, New York.

For example, Celestial is in the middle of a months-long clinical trial to back up claims it makes about its new Sleepytime Snooz Natural Sleep Aid, Waltrip said. Once the trial is done, results will be added to company packaging, he said.

More broadly, innovation in a variety of natural and organic products is leading to tremendous growth in the market, said Liz Myslik, executive vice president for marketing and sales and an owner of Fresca Foods Inc., a food product manufacturer in Louisville.

“Obviously we’ve seen struggles in our industry, as every industry has in the last couple of years,” Myslik said. “But I’m encouraged to see such incredible growth.”

Sir Richard’s Condom Co. in Boulder fits the “brand story” trend, based on chief executive Jim Moscou’s explanation of his 2-year-old company. Moscou said his condom products are chemical-free, and that for every condom bought, one will be donated in a place where there’s a shortage of condoms, such as Haiti.

“Our motto is, ‘Doing good never felt better,’” Moscou said. “I’m dead on a stick if I just sell to Whole Foods. I’ve got to get to the mass (market), and give them a story.”

The natural and organic foods industry in Boulder is growing up, and it’s important to measure the results, said Sylvia Tawse, owner of Fresh Ideas Group, a public relations company in Boulder. Naturally Boulder partners with the University of Colorado-Boulder’s Leeds School of Business on a regular basis to do economic impact studies.

Just as important, though is the region’s “magnetic” attraction to draw other industry companies here, Tawse said. As an example, Tawse pointed to the food company Smart Balance Inc.’s (Nasdaq: SMBL) plan to move its headquarters in 2013 from Paramus, New Jersey, to Boulder and to change its name to Boulder Brands Inc.

“I think that’s a positive milestone,” Tawse said.

Even as the industry grows, the high price of commodities continues to be a risk factor, said Steve Hoffman, owner of Compass Natural LLC and a co-owner of Best Organics Inc., which does business as America’s Best Organics.

Changing weather patterns brought on by climate change also affect the industry, said Seleyn DeYarus, CEO of Best Organics Inc.

There’s a definite shifting of availability and reliability because of inexplicable weather,” DeYarus said. “That’s the elephant in the room.”

The industry also could benefit from subsidy help from the federal government, said Tom Spier, CEO of Phil’s Fresh Foods LLC, doing business as Evol Foods in Boulder.

Marty Grosjean, CEO of Only Natural Pet Store LLC in Boulder, said his online pet-care store has expanded into Whole Foods Market stores in the region as well as Alfalfa’s Market. The company’s “I and love and you” is a line of 55 natural pet products formulated by a holistic veterinarian. Grosjean created the brand with Brendan Synnott, founder of Bear Naked granola; Chris Bentley, co-founder of Aspen Pet; and Steve Ball, a former brand manager at Nestle, General Mills and Small Planet Foods. Revelry Brands, owned by Synnott, invested $3.5 million in the company.

The event was held at the office of sponsor Ehrhardt Keefe Steiner & Hottman PC in downtown Boulder. Berg Hill Greenleaf & Ruscitti LLP also is a sponsor of the roundtables.

The Boulder County Business Report conducts CEO Roundtable discussions monthly to address key issues facing companies and industries in Boulder and Broomfield counties. The roundtables are closed to the public, but the Business Report reports on each roundtable.