Better For You Snacking

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1:53Marla Felton:You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevek on Bloomberg Radio. We spend a lot of time talking about crude oil, the sharp war-driven surge that we've seen. Even after today, it's up significantly from where it was at the beginning of the year. Other commodities, inputs for fertilizer, chemicals and more. Soybean oil futures, Carol, up a whopping 37 % so far this year.

2:19Lauren Berger:Yeah. I mean, that surge in energy prices over the last few months, I mean, if you think about it, has boosted demand for alternative fuel feedstocks. But this whole thing in terms of the war, the environment, the macro, we have seen a real change in the narrative, especially when it comes to input prices. And it has played its way through the economy, the global economy.

2:38Marla Felton:Curious how Lauren Berger and Marla Felton are looking at this. They're the co-founders of Real Cookies. They join us here in the Bloomberg. interactive broker studio welcome it's been three years since you were last year i wasn't even here when they were last year matt miller was here you were here cookies i was trying to remember

2:53Lauren Berger:because matt loved them took them home to his little ones he probably only had one little one then yeah he did only have one he's now certainly expanded yes he has um so you guys do not use

3:03Marla Felton:soybean oil in in the cookies but other ingredients go in that are affected by the commodity price shocks that we've seen thus far. Just talk to us about the last seven weeks and how you've adjusted to higher energy costs and potential other supply chain disruptions.

3:19Lauren Berger:Well, since our business is now national, we have to ship product from one part of the United States to another part of the United States. And sending products in trucks becomes more expensive when fuel prices are higher. You know, Marla, come on in on this, because I do think we wanted to start macro because every business, every business owner, CEO, head of an institution has had to kind of grapple with what's been going on in the macro. What of the macro does most concern you? You guys talked about transportation. That's certainly one of them. Yeah, transportation, but also because of our products are made with real ingredients.

3:55Lauren Berger:Almond flour, almonds are the base of our cookies. So, and we use maple syrup. So, these are real foods. They're not chemicals, right? A lot of foods out there, a lot of processed foods. If you look at the back of the, the back of it, it's, it's frightening, right? And if you look at our ingredient list and we have a yes, no on the back there, you can see on the real cookies. We have a very short list of ingredients. So we always have to have redundancy, right? So we have multiple suppliers. We have to make sure that we can get our product something like maple syrup if there's weather issues right in vermont we have to or we have maple syrup if if we're coming from canada right uh tariffs yeah so there's always challenges in thinking about how we are going to produce these cookies all right so i'm just showing for everybody so here's the ingredients on the cookies as as our guys push in i mean it's

4:54Marla Felton:not but there's the list on to the other side too the green part and the red part so yes almond

4:59Lauren Berger:coconut so look at this guys oh okay yes almond flour yes real vanilla yes maple syrup yes premium chocolate yes natural peanut butter no gluten no grain no dairy no eggs no corn no soy no artificial sweet sweeteners but it's really funny and you've got some other products that we're going to talk about i mean it's just a couple of ingredients um how much more difficult tim and i talk about food a lot we both care he's got a lot too talk about it there's banana here there's other stuff There's other stuff. But how difficult is it to really get healthier products? Talk about that supply chain. Talk about the costs and talk about that process.

5:36Lauren Berger:Well, we're always managing costs and our costs of goods are continuously increasing. But we want to give products to consumers that are made out of real food. So our goal is to keep our ingredient list very short and get as much real food to as many people as possible. Is it tough? Is it a tougher nut? Because I think there are reasons that people throw a lot of other different ingredients when you're doing something like this. So is it tougher to kind of restrict it? And what are those supply chains like? It is, again, because there literally can be a shortage of almonds or a shortage of maple syrup.

6:10Lauren Berger:And so you're not getting it. But I think that today people are really caring about what they're eating. There's a lot more awareness of how food is not just to feed you, but it's to feed your body. It's for health. So I think even though prices can rise and products can be more expensive than some of the mass market foods, I think that people are willing to pay a little bit more for better quality real food and to know that they're feeding their family something that's good for them. You guys have obviously seen it. The business has grown. And maybe talk about that. Tell us about, last time we talked was three years ago, right?

6:53Lauren Berger:Like, what have you guys seen since then? Well, we've had some exciting news with our merger. So we did merge with another company, Creations Foods. And this merger has really created a vertically integrated platform for us. So we have greater resources to do ingredients, supply chain synergies, to do R &D development, to move and get new products to the market quicker.

7:18Marla Felton:What are you doing with R &D? I mean, if you think about the portfolio of snacks that you have as a result of this merger, where do you see the opportunity for white space or like, you know, what is out there that's not there yet? Because this is an incredibly competitive landscape.

7:36Lauren Berger:Yeah, well, with the increase of GLP-1 usage, the way we snack and the way we eat is changing dramatically.

7:42Marla Felton:Meaning high protein.

7:43Lauren Berger:High protein, low sugar, fiber. So we are formulating with all of that in mind.

7:49Marla Felton:Are you reformulating existing things as a result?

7:51Lauren Berger:We are looking at reformulating existing things, but we're also, we have a very long innovation plan of products that we want to bring to market that are just better and improved on what we have.

8:02Marla Felton:Like?

8:04Lauren Berger:Well, we're actually, we have a whole breadth of items from sweet to more savory.

8:10Marla Felton:When would we expect to see those?

8:13Lauren Berger:By this time next year. We'd love to be back to talk about. So it takes a long time. It takes a long time to develop products. So it sounds like also broadening. Like, I am curious in terms of the cookies. Now, Matt Miller was here last time, and he was like, I love them. And I know already somebody in the newsroom, our Sebastian, I think, who also loves them has, like, swiped a bag and is sampling them. These are adults. How much of what you guys are doing has been really for kids? How much of it increasingly even adults who do care about what they are eating is they're consuming them? And then how much of when you think about expanding, is it going to an older population or an adult population?

8:49Lauren Berger:I'm just curious about that mix. Well, for the Real brand in particular, we're focusing on the whole family. And so parents, parents with children, thinking about feeding everyone in the family from young children through adults. And actually this is something that's very important to us. And Marla and I created a program called Real Food is Fuel. And we actually go into elementary schools and teach young people how to read nutrition labels. So they know when they pick up a package how to find out what's in it and how to think about where each ingredient has come from. I love that. I mean, I've talked often on air.

9:22Lauren Berger:My daughter has been like that for years. And part of that is us. And it's taken, you know, you kind of, it wasn't that way. And maybe it was as we started to put up calories, you know, in terms of when you go to order food. But I know she's done that for a long time. And I think it's part of it is because we've increasingly done that. Yeah.

9:38Marla Felton:I also, I mean, I personally also think it has to do with getting older. Yeah. And, you know, understanding that when you're in your 20s, you, although your daughter is in her 20s but you know you can't kind of get away with what you were doing in your 20s when you're in your 30s um marla i want to go back to what you said about maple syrup and the rising costs as a result of tariffs our conversation started with the macroeconomic backdrop of uh supply crunches as a result of the war um when it comes to something like maple syrup or other of these ingredients that could be subject to tariffs what have you had to do from a pricing perspective over the last year and price adjustments like have you had to raise prices tell us what you've done or hit margins what is it what's happened I mean we have planned for larger margins so so you ate a lot of this we ate a lot of it when that happened however you know

10:26Lauren Berger:you know we aim for 50 percent margins so when something like that happens it brings it down

10:31Marla Felton:but we're still okay does it cause you to say okay well maybe we're not gonna be able to get maple syrup from Canada we're gonna have to get it from Maine or Vermont does it do that like That's the whole idea with tariffs.

10:43Lauren Berger:Absolutely. And I think it also broadens our thought. Like we've had a lot of conversation about maple syrup. I think we're probably one of the only cookie brands that uses maple syrup. And part of that is because it's expensive, but it has a low glycemic index. And then when you match maple syrup with a protein like almond, it does not spike your sugars, your insulins. Right. So it's much better for you. So we love maple syrup. But we are being creative and we're looking for other ways that we can sweeten our products naturally. We are not a fan of a lot of gluten-free products. Put a lot of stuff in there that shouldn't be in there.

11:27Lauren Berger:And a lot of people use fake sugars, right? Sugar alcohols. Things that don't feel good on your body. So I think that people also are realizing, you know, you can say, well, something doesn't have sugar. But sometimes a little bit of something is better than something that's fake or can do harm to your body. And one thing, when we came here, it was right after the pandemic. And I have to say another thing is that post-pandemic, we have learned a lot more about health. So we both come from families who have health issues. My daughter had a significant health issue for most of her life, still has a chronic health issue.

12:04Lauren Berger:But what we've learned because of all the research that has come post-COVID is that there's so much inflammation in our body. And the processed foods and these fake ingredients that we're eating are making us sick. And so if we can eat with maple syrup, so I think we're experimenting, how can we bring the amount of maple syrup down and maybe add a little bit something else natural to keep it sweet? I made a pecan pie for Thanksgiving and no sugar, but you used maple syrup. And it was really great. So it's interesting how recipes and things are substituting. You make a lot of cookies, too, around the holidays.

12:42Lauren Berger:I do. There's a lot of sugar and butter in there. I think those are sugar in them, the ones that I've tried. There's a lot of sugar and butter. She brings them into everybody there.

12:48Marla Felton:But there's only like a handful of ingredients.

12:50Lauren Berger:But yeah, yeah, no, fair. What do you make of an administration? I'm not looking for politics, but whether it's the FDA or our health and services secretary, in terms of what they're saying about health and what to eat, from what you guys are seeing, I feel like what you see in terms of consumer trends tells you a lot. You are telling me that consumers care. It doesn't matter what they're hearing elsewise or from an administration. they care and you've seen it in the uptick in your good. Is that fair? Yes, absolutely. And I think I've also worked a bunch in the patient advocacy space just because of our health challenges in our family.

13:35Lauren Berger:And I think parents especially and people who have chronic illness themselves know what they need to do. And I think the most important, and Lauren and I are both big researchers, so we read everything. And when we're sourcing our ingredients, And so everything is really well thought. But I think that my message to all consumers is read as much as you can, right? And you have to look at different sources. You have to go. And when you're reading, go and look at the scientific research yourself and look at how the studies were set up. So don't take someone else's word for what is healthy, what is good for you, what is bad for you.

14:18Lauren Berger:Really read and do your own research.

14:19Marla Felton:Lauren, have you changed the way that you eat as a result of starting this company?