How Kodiak Cakes Has Built A Platform Brand In Grocery Stores

Over two decades ago, Joel Clark and his brother John took their mom’s wholewheat pancake recipe and turned it into a business. Today, the business has grown from those humble roots across center store categories ranging from pancakes to oatmeal to frozen waffles. I sat down with Joel to learn about how they have expanded the brand and why one of their best decisions was actually not launching a product in their early days.

Dave Knox: What inspired you to start Kodiak Cakes?

Joel Clark: This whole journey was pretty homegrown, and it was actually my mom’s idea. When we were growing up my mom would make these awesome wholewheat pancakes from scratch. And she even had a wheat grinder out in the garage, and she would grind her own wheat. And honestly, we did not always appreciate all of the super healthy things we ate growing up, but we did love her pancakes. And she always had a dream to take her recipe and make a product out of it and sell it. And so when I was eight years old we made little homemade pancake mixes in brown paper lunch sacks, and we loaded up my little red wagon, and I went around the neighborhood and sold homemade pancake mixes to the neighbors. And so that is the earliest roots of Kodiak Cakes. Fast forward to 1995 and my older brother John wanted to start a business. He was talking to my mom and she said, “why don’t you take the pancake recipe and make an actual product with it and start a company? Go sell pancake mixes.” And so that is what happened. My older brother John took the recipe and created the brand Kodiak Cakes, and created the first product and asked me to help him. And so we went out and started selling this little pancake mix. And then I took the company over a couple of years later.

Knox: What was that early retail journey like?

Clark: Initially we were selling in these little gift shops in ski towns like Park City, Utah, Sun Valley, Idaho and Jackson, Wyoming. My brother John was running this on the side and he started to see pretty early on that we had to get this into grocery or we’d never make any money. The first grocery chain that actually carried it was QFC Grocery stores up in Seattle. John went up there in early 1997, sold the product in, and then they started buying it. Then we started to see like these bigger orders going out and we were like,” Oh, this is great. We’re selling a pallet instead of selling one case by UPS.” That was when we realized this is the future of Kodiak Cakes. John’s vision from the beginning was to be a mainstream. He wanted this to be a good enough product that your everyday consumer would love it, even if they were not really looking for a healthier whole grain product.

Knox: What is the mission behind Kodiak?

Clark: I really do love our mission, which is to inspire healthier eating and active lifestyles with nourishment for today’s frontier. We want to inspire people to eat better and live more active. And when we talk about nourishment for today’s frontier, it’s like we have this cool kind of frontier theme about the brand that kind of hearkens back to when life was simpler and food was real and whole. We are all about whole grains, for example. But what about today? What about today’s frontier that we should embrace, that we have learned about food? Protein is one. So a lot of our products have higher protein in them. For us, we are really trying to elevate the standard of nutrition in the center of the grocery store. When you see people eating our product, and it’s a part of their getting healthier journey, that’s incredibly motivating for me.

Knox: How have you taken that kind of mission for the company and then translated it into the culture of the business that you built?

Clark: We have five main pillars of our culture and they are all bear terms a little bit, because it’s Kodiak, right? One of them is leave the growl behind, and that’s about just great relationships and being great to work with. The other one is about to bear together. And that’s about empowering each other and collaborating. And then one is forge a fresh trail, and that’s about being passionate, being innovative. And then one is clawing through, being proactive, showing grit, and being scrappy. The last one is called get out of the bear den. And that’s a work hard, play hard mentality. And it’s about getting outdoors. It’s also just about getting out and visiting stores and seeing the retail environment. But it goes further because we have something internally called bear bucks. Everyone that works at Kodiak Cakes gets a small portion of their salary to go towards outdoor, active lifestyle purchases. It could be ski equipment, a ski pass, gym memberships, or a mountain bike. It is us putting our money where our mouth is. We want people to live an active lifestyle, and so we really enable that for our team.  One of our channels for Slack is called bear bucks where people post pictures of what they’re doing outside. Maybe they’re out on a hike, or maybe they’re out rappelling or on a trail run, or mountain biking. It’s just fun because we get to see what everybody’s out doing. That’s like a really cool way for us to just build that mission into our culture.

Knox: While you started in gift shops and then grocery, retail today is Omni-Channel.  How does Kodiak balance your go to market?

Clark: Over the last several years we have really focused on grocery, food, drug, and mass. That has been our biggest focus because there is just so much to go and do. There are so many stores out there. Recently we have been also focusing on online with Direct to Consumer and Amazon.

Beyond that, we have really focused our strategy on category growth, on expanding this brand into multiple categories as a platform. What we’re trying to do from a vision standpoint is elevate basic nutrition standards across the center store. And so what we’re trying to do is build a platform brand. When we were just in the pancake category, we realized,” Man, this is a small category.” And it wasn’t a category that buyers really prioritized. So it was kind of hard to break through. So early on we really, we realized we have got to be in multiple categories to really build this brand. And so that became a focus of ours pretty early on to play in a lot of places. Today we live outside of the pancake category. Oatmeal has been a really big focus for the last couple of years and so has frozen waffles. We launched into the cookie cracker space with a product called Bear Bites that is a mini bite-sized Graham cracker. Each of these category extensions has revolved around whole grains and protein. Earlier this year we went into granola bars and then we are going to be launching a really cool nut butter syrup product at the end of this year. We are continually asking ourselves what else can we do? The trick is you don’t want to overextend and go too fast. You want to build your core and not lose focus of that. But you also want to take advantage of new opportunities to really extend the brand and have growth that way.

Knox: As you have built that platform brand and moved into categories, what has been the experience pitching to new retail buyers? 

Clark: What really helped is that we started to extend outside of the pancake category early on. We saw this need to get out of the pancake category because it was kind of a tired category and didn’t have a lot of innovation.  But when it was early on and we didn’t really have this great track record established yet in pancakes, it was harder. We created a few items outside of the pancake category in 2011.  But then what happened was in 2014 the pancake category just started to work for us. That is when we launched into protein with Power Cakes. We started to see real exponential growth in that category and it was very incremental to the category. We were not just cannibalizing sales of other brands, we were actually bringing new people into the category and growing the category. And so once that happened and we started to see real wins in our core category, then other buyers starting to go, “Hey, that’s awesome. What can you do for me?” And so then other buyers really started to want to meet with us and wanted to see if we could do that same thing in their category. So that’s when it really started to hit for us.

Knox: How have you integrated your mission into your marketing strategies? 

Clark: There has been a lot of disruption in the food space from small and emerging food brands like ours. Obviously, part of it is product positioning, and people like that we are bringing a differentiated product, but there is also this authentic brand story that people really love.  They get really loyal to Kodiak Cakes. One thing that really lends itself to is you have to be good at grassroots marketing. You must remain authentic in social media, content, digital, and your influencer strategy. We used to do a ton of events before COVID, and we have had to adapt to doing more online events. But I think if you can connect well with the right influencers, then that will really help propel your brand. One of the things that is unique about Kodiak Cakes is we do have this really cool lifestyle element to the brand that for center of the grocery stores is pretty unique. That really helps us sustain this brand and is a big reason why people are emotionally drawn into this brand. We are in Park City, Utah, this cool mountain town, and we are trying to incorporate some of that outdoor active lifestyle into the boring center store grocery categories like pancake. We believe that bringing innovation to the category and then bringing this brand with these lifestyle elements really is unique.

Knox: What advice do you give to entrepreneurs that are trying to launch new brands after the two decades of experience you guys have had growing Kodiak?

Clark: The one thing for me that was just a huge lesson early on was to stick to your positioning. I remember early on when we were trying to get this little pancake product off the ground, before we had any other items in our portfolio or any other categories, it was hard and it was taking a long time to break through. We were trying to break through with a whole grain product that was healthier, that tasted good. But I remember thinking, “Gosh, this is taking forever. Maybe there are not enough people who want to eat whole grains. Maybe we need to just create a white flour pancake mix and try to make it healthier.” We even went so far that we actually formulated one. And it was good product.  But we were debating if we should launch it. Finally, we decided we should not launch it. I remember John saying to me, “Joel, if we launch this product, it will just dilute everything that we stand for. And we won’t have a unique position in the market that we are all about.” That decision of not launching that white flour pancake mix back in 1999 was one of the best things that we ever did.

Having your positioning and sticking to it and being strong to your brand and sticking to your brand identity, has served us well over the years. And although it took us a long, long time to get established, one of the reasons why we have such a strong brand today is because we did not dilute our identity and what we were all about. I think that is one thing that entrepreneurs really need to do.  Sometimes you have to make adjustments and adapt, but be very careful about that. You do not want to be all things to all people. You have got to have really clear market position and find those consumers who care about that.