Can an Organic Chip Company Survive the Snack Aisle’s Street Fight?
Late July, in other words, has plenty of tough competition. There’s Beanitos (better than they sound) and lentil chips (meh). There’s that ubiquitous all-natural cheese puff, Pirate’s Booty, and the air-popped Popchips, both of which have been boosted by investments from former executives at Glacéau (better known as Vitaminwater), which was sold to Coca-Cola in 2007 for $4.1 billion. There’s regional tortilla stalwart Green Mountain Gringo. And there’s even the brand Dawes’s father started, Cape Cod.
Even here in Massachusetts, Dawes has her hands full. The Needham-based Food Should Taste Good tortilla chip company started in 2006, and the next year pulled in VC cash from local fund Sherbrooke Capital. The company possesses just about every do-gooder bona fide that Late July has — the GMO-free, seed-embedded multigrain tortilla and sweet potato chips, the baked-then-fried approach — everything but the organic certification.
The truth, though, is that it’s hard for consumers to judge whether a chip is truly organic. While Dawes has the USDA Organic symbol on her side, other brands use language that can leave you wondering. The Garden of Eatin’ brand, for instance, puts “Made With Organic Blue Corn” on its bag even more prominently than Late July’s own USDA certification. Sounds good, but what does that really mean?
Even trickier is the issue of “all-natural,” the largely undefined catchall phrase that companies like Frito-Lay have begun using as a way to battle for consumers who may be interested in the environmental and pesticide-free attractions of organic, but who aren’t necessarily familiar with the precise meaning of the various designations. The proof of the effectiveness of the all-natural label is in the numbers. Sales of chips, pretzels, and snacks labeled “all-natural” grew 14 percent in 2011, more than twice the 6.4 percent growth rate of their organic counterparts. “It’s a lot cheaper to be just GMO-free, or just local, or to pick one component of the regulations that works for your business,” Dawes says. “That’s not a commitment to change, that’s what’s convenient for you. They have marketers that are very good at what they do, and I’m concerned they’re going to undermine the whole organic program.”
Dawes doesn’t have the funds to employ an army of marketers to explain why organic is what’s best for your family. And without that kind of talking power, the ultimate success of Late July — and its ability to fulfill its higher mission of spreading organic values — rests largely with the consumers. If they don’t do things like pause in Whole Foods to watch a two-minute video, and then decide to support entrepreneurs such as Dawes, organics will remain a niche instead of a large force for change.
One option, of course, would be for Late July to simply follow the well-worn path to venture capital, which might pay for a lot of that talking power. But Dawes says she isn’t interested. Despite the fact that VCs have been sniffing around the company since it first put cookies on the shelf, Dawes says she’s going it alone. Yes, a surge of financing could accelerate growth, but she’s wary of losing control or having her mission diluted. “The death of my father changed my views on that topic,” she says. “Entrepreneurs believe they’re going to live forever. I want to make sure this brand proves itself and will always be the way I’ve envisioned it.”