Following a year plagued by out-of-stock issues and high shipping costs, plant-based food and beverage brand New Barn is scaling back retail distribution for its product portfolio to service only the West Coast as it focuses on integrating an omnichannel strategy in 2020.
Speaking with BevNET this week, New Barn co-founder and CEO Ted Robb said the four-year-old company had been exploring a revised go-to-market strategy for at least 18 months. However, the company moved into action this year when it faced supply chain and out-of-stock issues that arose as it transitioned from plastic to paper packaging on its almond milks last year.
“It’s not a secret in this industry that trade spend continues to go up, then there’s freight costs, there’s a lot of pressure to play the game,” Robb told BevNET. “For us, we felt it was really important to take a look at where we saw the possibilities, what the economics per unit were and ultimately what channels do we think we can be most successful in.”
New Barn will reduce its retail footprint by over 2,000 stores nationwide, keeping roughly 3,000 locations on the West Coast which Robb said the company is in a better position to service. To date, the company has manufactured exclusively in California and has shipped across the country through a partnership with Organic Logistics, the distribution arm of dairy co-op Organic Valley. While Robb hopes to eventually once again expand nationwide, he said New Barn will work on securing production capacity on the East Coast before it seeks out new retail partners.
New Barn is also looking towards opportunities in ecommerce and food service, as well as expanding beyond the natural and specialty retail channels into convenience, drug and conventional outlets.
“One of the things we heard again and again and again from our consumer is ‘I have to drive two hours to Whole Foods to find [New Barn products]’” Robb said. “We would send them a list of independents that were closer to them, but they would just ask, ‘Why aren’t you in whatever MULO store?’ How do you explain to the end user that we’re not in MULO because we can’t afford the slotting?”
In March 2018, New Barn raised $3.75 million in a Series A round led by New Food SPV, but has otherwise sought to limit institutional investment in the company. According to Robb, the scale back was largely driven by a desire to remain independent and avoid taking on debt or selling stake in the brand.
In addition to the pull back on distribution, New Barn is also refining its product portfolio. The brand has dropped the entirety of its flavored almond milk varieties and abandoned plans to launch a line of cold brew coffees unveiled earlier this year at Natural Products Expo West. The company also dropped a line of dairy-free dips that were briefly available in Southern California region Whole Foods stores this year. However, Robb said the dip line received “huge interest” and may relaunch in the near future once the company has solidified its distribution strategy.
Going forward, New Barn will retain its unsweetened and Barista Blend almond milk SKUs, and will launch two additional products — unsweetened coconut milk and an unsweetened almond-coconut milk blend — in the first quarter of 2020. The company is also still producing its Almondcreme line of non-dairy ice creams and its plant-based Buttery Spread.
Robb said the company has more innovations set to launch next year, some of which will be intended for specific channels, such as food service. As well, New Barn will sell larger pack sizes of selectproducts, such as the Buttery Spread, exclusively to food service accounts. He added that the company is in discussion with several distributors that service the channel as well as some large chain customers, but declined to name which companies until the deals are finalized.
“It’s exciting,” Robb said. “Marketing isn’t the same as retail, there’s no trade spend, there’s a different distribution model. We’re really pumped about it and we see a lot of opportunity in front of u. It’s sort of a sell-in we’ve not really done before and we’re starting to get new resources behind our team to help us understand the channel and the margins.”