Catalina Snacks was founded in 2017 by Krishna Kaliannan who as a Type 1 diabetic missed the typical snacks and breakfast foods he once enjoyed (Cinnamon Toast Crunch and Oreos) and was growing tired of an endless cycle of eggs and nuts to maintain his blood sugar levels.
Through online research into low-carb baking, Kaliannan discovered that he could enjoy a low-carb variation of his favorite cereals, which after positive reception from friends and family he decided to turn into a business.
Launching as a direct-to-consumer brand first Kaliannan built up a loyal following of consumers who like him struggled to find low-carb options in certain carb-centric categories of the store to fit their individual dietary needs, keto being a prominent online audience for the company in its early days.
But Kaliannan said he was not anticipating the consumer attraction the brand was receiving from consumers with no particular dietary need or lifestyle choice but just general interest in reducing carbs and sugar.
"I realized I wasn’t the only one that had this interest," Kaliannan told FoodNavigator-USA, who believes in that many instances, consumers using the term 'keto' as a proxy for low-carb and low-sugar.
"You see that broadly, folks are trying to reduce the amount of carbs they eat, reduce the amount of sugar they eat and get more fiber, get more protein, etc."
Who is the keto consumer?
Acknowledging that just a small subset of its consumer base are hard-core keto dieters or diabetics managing their blood sugar, Kaliannan noted how Catalina Snacks has attracted a diverse consumer following who simply want to have feel like they have the license to enjoy cereal and sandwich cookies again without the guilt associated with consuming empty carbs and added sugar.
"It’s not just one monolithic type of consumer. There are a small group of folks that are intensely dialed into that, and then I think there’s a larger group of people who are not militantly trying to be in ketosis and testing their blood all the time," he said.
"The majority of our audience are folks that just wanted to eat less sugar and eat fewer carbs, and not necessarily keto diehards."
According to Kaliannan, the keto trend has also become so mainstreamed that consumers have come to attach their own meaning to the term.
"A lot of folks have taken insights from the keto movement and applied them to their personal health philosophies," he said. "I think what keto has done is that it's educated a lot of consumers on the harms of eating a lot of sugar and eating a lot of empty carbs, which is what most cereals [and cookies and snack mixes] are."
The company's portfolio of 22 SKUs across three product categories of cereals, cookies, and snack mixes all contain the same broad macro nutrient profile: 0-4g of sugar, 3-9g of fiber, and 3-11g of protein per serving using a mix of alternative proteins, fibers, and sweeteners such as pea protein, potato fiber, non-GMO corn fiber and chicory root fiber combined with stevia, monk fruit, and allulose.
Retail performance: 'There’s a heck of a lot of consumers that are interested in this sort of thing'
Building up its online presence and audience allowed Catalina Snacks to transition smoothly into retail, where it is commanding a larger shelf presence as retailers experience the brand's incremental growth in many center of the store aisles.
Catalina Snacks products are currently sold in over 15,000 stores nationwide in natural, conventional, and club channels at major retailers including Kroger, Whole Foods Market, Costco, Target, Publix, Albertsons, Meijer.
"Our sales velocities grew very quickly, and we have more and more retailers bringing in the product," said Kaliannan.
According to the company, Catalina Snacks has become the #6 fastest-growing natural brand in the conventional channel registering 381% year-over-year growth. It also is the #1 selling SKU and #4 brand by dollar sales in the natural cereal channel. In the Natural Cookies Channel, it is currently the #5 brand by dollar sales registering 223% growth in Q1 2022 vs. the prior 12 weeks.
"Across cereal, cookies, and crunch mix, we’re seeing category leading dollar velocity, and we’re really excited about that," he added. "Our direct-to-consumer revenue has also grown 112% year-over-year, which is a strong indication of the interest of consumers and shows me there’s a heck of a lot of consumers that are interested in this sort of thing."