5 Ways To Grow A Manufacturing Startup

In guiding Catalina Crunch from sassy startup to the next levels of scale in the consumer-packaged-goods business, Joel Warady has brought not only domain knowledge but also experience and strategic sensibilities that only a seasoned executive can brandish in getting a fledgling outfit to the next level.

Since he changed his role from mentoring founder Krishna Kaliannan to becoming president of Catalina Crunch in 2020, Warady is applying at least five approaches that CEOs in similar positions can learn from. These lessons range from how to maintain a sense of purpose in scaling up a company to how to make the difficult decision about where to do manufacturing for the long term.

“I took the job because at this point in my career, and from what I’d already done, I look at businesses that are on trend and are changing the way people eat forever,” Warady told Chief Executive.

Warady not only was a veteran of the CPG business but, specifically, a member of the vanguard of the better-for-you revolution that overtook the industry during the last quarter-century. Over 18 years, he was a board member and in various top-executive roles for Enjoy Life Foods, a pioneer in the “free-from” category with products that lacked common food allergens. Mondelez International acquired Enjoy Life in 2015.

Catalina Crunch makes breakfast cereals and snacks friendly to the “keto” diet that emphasizes low carb consumption and high protein intake, and Kaliannan was able to grow the company into at least a $12-million brand pre-pandemic. But he recruited Warady as president of his company to expand the brand and provide long-term staying power.

Here are some of the approaches Warady has been using:

• Lash the company to “purpose”: Kaliannan brought passion as well as purpose to his startup from his own dietary struggles as a youth. And Warady has made sure to embrace and codify Catalina Crunch’s purpose as he has grown the company, making it hew to its original mission as he expands its search for new customers.

“Everyone talks about a mission-driven business, but ‘mission’ can be a bit murky,” Warady said. “With Catalina Crunch, the mission is very clear: reduce consumers’ consumption of sugar an carbs and provide them with lower-sugar, high-protein but great-tasting products.”

• Squeeze what you have: Lots of better-for-you startups make the mistake of believing they can become “lifestyle” brands and simply attach their logos to any vaguely healthful or nutritional product, even if it goes far afield from their original categories. But Warady has brought the discipline to Catalina Crunch which understands that strategy can be trouble.

And he’s sticking the company to its original product line as well as easy and common-sense adjacencies into other snacks under the keto banner. “Where are the holes” in categories “where we can create a great-tasting product that meets the right [nutritional] macros?” he said. They include the company’s new cookies, and a savory “crunch mix.”

“We explored other day parts and came up with the crunch mix using our cereal as a base. We said, ‘How can we make an afternoon and evening product out of this?’”

• Apply savvy to the supply chain: “When the pandemic started, the first thing I said to everyone is that there is going to be a supply-chain issue,” Warady recalled. “In my previous business I had been importing ingredients from Asia and Europe, and I saw what was going to happen.”

So Warady launched the Catalina Crunch procurement team on a search for alternative supplies of difficult-to-obtain ingredients including chickory root and tapioca. It also was a bad year for growing pea protein, so the company adjusted.

“We certainly were experiencing what many companies were: backed up containers,” he said. “But if you plan appropriately, you can mitigate these issues. So we bought a year’s supply of ingredients last year in the first quarter. And we were able to tell retailers that if they were experiencing shortages of other brands, we had inventory for them. Many have taken advantage of it, and in turn this is expanding our distribution.”

• Make manufacturing strategic: Catalina Crunch moved its headquarters and production from New York City to Indianapolis under Warady, doubling factory space and employee count through its contract manufacturers.

“Many of our copackers are located in the Midwest,” Warady said, “so that made it efficient for us to but our business in the Midwest. And there are a lot of food companies in Indianapolis, so we’ve been able to get some experienced personnel.”

The move also has allowed Catalina Crunch “to finish goods and produce against forecasts, not against purchase orders,” he said. “We’re able to invest significantly in sophisticated [sales data] and able to look at growth in velocity as well as knowing our distribution. On a monthly basis, now we’re able to calculate within about five percent of what our forecast has been.”

• Build share of shelf: Catalina Crunch is retailed through more than 15,000 stores across the United States, but in many of those stores, the brand sells only one or two SKUs. “Yet we now have 28 SKUs that we can offer,” Warady said. “So growing distribution of more of those SKUs is a primary strategy.”