Gardenburger Inc. has filed for Chapter 11 bankruptcy protection, and announced that it would be reorganized as a private company designed to "to make Gardenburger a simpler and more efficient vegetarian foods company."
While the company once had annual sales of more than $100 million, it had struggled in recent years, especially in the face of heightened competition from Kraft Foods, which bought Bocca Burger, and Kellogg Co., which bought Morning Star Farms.
While the company once had annual sales of more than $100 million, it had struggled in recent years, especially in the face of heightened competition from Kraft Foods, which bought Bocca Burger, and Kellogg Co., which bought Morning Star Farms.
- KC's View:
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It strikes us that this could be seen as a cautionary tale for pioneering companies in the health/natural/organic food business.
While many of these companies have thrived for years without significant marketing budgets, the entrance of major manufacturers into the category could squeeze them out in certain cases. Not always, because some brands and products will have transcendent appeal. But it could and will happen more often than the category leaders would like to admit.
This actually was an issue that we discussed at some length during the panel discussion we moderated at yesterday’s Portland State University (PSU) Food Industry Leadership Center (FILC) executive conference in Oregon. The problem for some smaller brands, we think, will be with marginal customers thinking about testing or trying natural or organic products – they will be lured by the bigger brands that spend more money of marketing and/or advertising. Core customers are likely to remain loyal to the category’s pioneers…but that won’t always be enough.
