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KIND launches energy bars as business soars amid coronavirus

KIND Founder and Executive Chairman Daniel Lubetzky joins Yahoo Finance’s Kristin Myers to discuss how the company is challenging Clif with its own line of energy bars.

Video Transcript

KRISTIN MYERS: We're now joined by Daniel Lubetzky, the founder and executive chairman of KIND Snacks. Daniel, thank you so much for joining us today. I've seen that snack sales are on the rise lately. I'm wondering if you can give us the near term, but also the long-term outlook for KIND Snacks, particularly as we are all waiting and hoping and looking forward to a post-pandemic world.

DANIEL LUBETZKY: Well, the only thing you can predict about pandemic is that you can predict anything. I mean, that's been, for all of us in the food industry, very, very tough because channels change and shift. People sometimes are pantry loading, and sometimes they're not.

Different regions are behaving differently. Different channels like, for example, obviously, the airline channel and the convenience supermarkets, are very, very quiet. But online is growing, like, crazy for us. Brick and mortar, club, and mass are also growing a lot.

And in terms of consumption patterns, a lot of more people are eating at homes. Or cereals and our oatmeal is doing really well. But we continue to sell a ton of healthy snacks because people need them when they're working from their desk or when they're in any-- they're very flexible. So KIND is actually gaining market share in our space.

And, you know, the energy bars that we were talking about that we just launched are a new foray of ours into the energy bar subsegment, which is traditionally occupied by companies whose first thing is sugar. And we're reducing the first energy bar whose first thing really is whole grain, gluten free oats.

KRISTIN MYERS: So Daniel, I want to ask you about some of those ingredients. Because you're, right now, in a sort of bar fight, if we can call it that, to be punny on this Wednesday. In a bar fight, so to speak, with Clif Bars, who essentially challenged you guys to use all organic ingredients.

There's been so many people focusing on organic, focusing on healthy snacking. Why isn't that your focus going forward? Why aren't you meeting Clif Bars on that challenge?

DANIEL LUBETZKY: Our philosophy has always been to deliver products that are wholesome. And our number one ingredient is always something nutrient dense like almonds. And sugar, whether it's organic or not, is sugar. And so the number one ingredient in Clif products is sugar. The number one ingredient in our products are either almonds or cashews or wholegrain oats or fruit. And we feel that it's much more important to deliver nutrient dense ingredients.

KRISTIN MYERS: All right, so I want to ask you about these sales again with the snack bars. I mean, I know when I go to the grocery store, snack bars are never something that are on my list. But they inevitably always end up in my shopping cart. You know, I'm pushing the cart through the aisles. I see the snack bar, and I think, OK, let me go grab one of these. I know I'm going to want to snack a little bit later.

But more and more folks aren't going to the grocery store. They're shopping online for their groceries. Are you finding that people aren't necessarily buying KIND bars as much? Or is there a difference perhaps between the shopper that is purchasing groceries online with shoppers that are still going in stores?

DANIEL LUBETZKY: Well, we're very fortunate that KIND has been the number one best-selling product in the entire grocery store over the leading online retailer like Amazon. And we also do very well on all the other online retailers. The number one bestseller of all time in all of the grocery space on Amazon is KIND Dark Chocolate Nuts and Sea Salt.

So we don't find that problem. We have a ton of people who subscribe and save. I mean, if anything, that actually reminds people that they're automatically on their list, and it replenishes automatically. But you're right, Kristin, that there's a huge shift. And it's just accelerating the shift to more and more people shopping for convenience.

But there's a lot of hybrid trends, right? A lot of people order online, but then the stuff gets delivered to them by Instacart. So we're working a lot with Instacart to do sampling and promotions. A lot of people like to deliver the-- pick up their products at the curb. And a lot of people just order online and receive online. And the entire experience is like that.

And we work with all of our retail partners across those spectrums. I do think the cat's-- what is that expression? The genie's not going to go out into the bag, or the genie or the cat. I get my expressions all mangled because I was born in Mexico. But I do think that we're going to, for good, continue seeing a growing trend of online consumption.

But a brick and mortar is a very important part of our lives, too, because people like to look at things and discover. So I think it's going to-- you know, the grocery sector, all retailers have been benefiting, you know, [INAUDIBLE] people are eating at home. And they're a much greater consumption than at restaurants. So I think our entire sector is growing a lot right now.

KRISTIN MYERS: Daniel, I only have time for one more question with you here. Shifting away from snack sales and how well KIND bars are doing right now, I want to ask you essentially about how you guys are operating your business and how you will operate your business going forward.

We've been talking to a lot of folks that are saying, listen, we're not going back into the office. We're going to keep working remotely, especially since we've been able to be profitable this way. We don't have to now pay rent for some of these office spaces. We've been seeing businesses that can be nimble, that can be innovative. They are the winners in this pandemic right now.

So what does the next year look like for KIND snacks? And have you at all shifted or changed the way that you guys think that you'll be doing business going forward?

DANIEL LUBETZKY: Yeah, it's a great question that nobody has a perfect answer to, right? Like, everybody is asking the same question. Right now, we're prioritizing our team members' health, and we're giving them full flexibility. So I would think over 90 plus percent of team members are either working out of their homes, or we have people that work in factories that don't have the option to do otherwise. And so we're putting best in class systems to protect all of our colleagues in the factories.

And moving forward, my prediction is that it's not going to be one or the other. It's not going to be the way it used to be. It's not the way it is right now. It's going to be a new way where we're going to borrow from each. So if I have to guess, because it's all that it needs is a guess, is that it's going to be somewhere in between where people have a lot more flexibility because they've proven that they've earned, that they can be trusted to work from home anytime they want.

But we do miss that creativity that comes from being with each other and connecting with each other, kind of cultural connection that you achieve from that human bond. So we're probably going to encourage our team members to come sometimes, particularly for cross-pollination, particularly for culture acclimatization. And, you know, when you have new team members that have never met people in person, you know, it just reminds you of the importance of the human connection, which we hope to re-establish when it's safe.

KRISTIN MYERS: All right, well, we will have to leave that there. Thank you so much, Daniel Lubetzky, founder and executive chairman of KIND Snacks. Thanks for joining us today.

DANIEL LUBETZKY: Thank you, Kristin.