Ditch those big candies: Little Secrets challenges M&M’s and KitKat with natural alternatives

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Little Secrets envisions a positive outlook for the next few years. Pic: Little Secrets

Chris Mears, who founded Little Secrets in Colorado, had never spent too much time at a big company throughout his over-a-decade-long career in the food industry.

He previously worked as a regional sales manager for Bear Naked and only stayed with the granola maker for a year after it was sold to Kellogg for roughly $60min late 2007.

In 2009, Mears became the VP of sales at EVOL Foods, a natural frozen foods manufacturer, yet again, he quite the job 11 months after Boulder Brands purchased the company.

Boulder Brands, which was sold to Pinnacle Foods, is now operating under a bigger umbrella, Conagra.

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Chris Mears said: “In the confectionery category, you can get the shiny penny syndrome really quickly… For us, it is more about driving focus where we know we can win.”

“I never meant to work with larger organizations to begin with; I am just really ‘not cut from that type of cloth,” Mears said.

“I have always wanted to build something that impacts change immediately, be able to make decisions quickly, which can be achieved through a startup versus big companies can be all about managing instead of growing fast.”

Traditional candies with a premium twist

When Mears returned to the natural food space four years ago, he wanted to challenge iconic confections, to which most people in the US are accustomed, such as M&M’s. That was how Little Secrets came into being.

“I always love chocolate like Reese’s, but I saw a really big white space opportunity in the natural premium chocolate category where it was mostly chocolate tablets and bars,” noted Mears.

“Some other brands have done with cups, so I thought premium chocolate can be made into other formats that haven’t necessarily been done.”

Little Secrets created its first line of M&M’s alternatives that come with five signature flavors and three limited edition varieties in 2015. The products are all made with natural colors and are stuffed with trendy ingredients such as toasted coconut and dark chocolate.

“The most important thing to us is taste in addition to creating something people remember as a kid but with a premium twist on it,” said Mears. “Our pieces are bigger [compared to M&M’s] and have a better chocolate-candy ratio.”

Since Little Secrets shipped its first SKUs, the company has expanded to 4,000 retailers across the US, including Whole Foods.

“Over time, we have learned how to be successful is really focusing on premium and natural channels, because otherwise, it will be difficult to compete with those big boys,” said Mears.

Receiving new investment and taking on KitKat

Little Secrets’ double-digit annual growth in sales has caught many investors’ attention, including Steve Hughes, who shares a similar vision for natural foods with Mears.

Hughes was the founder of Boulder Brands and worked briefly with Mears before his company became part of Pinnacle Foods.

After he left Boulder Brands, Hughes co-founded an emerging brands accelerator, Sunrise Strategic Partners, with private equity firm Trilantic North America.

“I have been in touch with Steve over the past few years. We both came to realize that consumers are shifting towards premium segment,” said Mears. “Millennials, especially, are looking for new chocolate brands and 89% of them are willing to pay more for natural products.”

Sunrise Strategic Partners invested in Little Secrets for an undisclosed sum last month, which marks its ninth investment after some other high-growth CPG brands, including Kodiak Cakes and Perky Jerky.

Hughes said: “When Chris left Boulder Brands to start Little Secrets, I was excited for him but sad to see him go. I am thrilled to be partnering with him again on such an exciting business.”

The investment will help Little Secrets increase its distribution and reach more consumers especially since the confectioner recently launched a line of wafer products nationally.

“These crispy wafers, which are made with fairtrade chocolate, are basically taking on the classic KitKat. We also have single-serve offerings,” said Mears.

Additionally, Little Secrets also named Jeremy Vandervoet, who is the former director of marketing at Nestlé USA Confections and Snacking division, to be its president and COO, according to Mears.

With a newly appointed executive and a new round of investment, Little Secrets envisions a positive outlook for the next few years.

Mears said: “In the confectionery category, you can get the shiny penny syndrome really quickly… For us, it is more about driving focus where we know we can win.”