Healthy Ventures sells two products with opposite effects: Berry Sleepy is a natural sleep aid, and Berry Awake is an energy drink. The Westlake Village startup is the brainchild of James Lacey, who is taking a second crack at the natural food market. He previously founded and served as chief executive of Crunchies Foods Co., a Westlake Village manufacturer of freeze-dried natural fruit snacks without preservatives. That company was acquired out of bankruptcy by Chaucer Foods Ltd., a food ingredient supplier based in the United Kingdom, in 2014. Based on his experience developing the Crunchies brand, plus his knowledge in food distribution, Lacey believes his latest products will blossom in the growing natural food category. “We have a lot of diseases and over eating, because large companies have had reign on our food for a long time,” he said. “I’ve been working on developing myself, changing and becoming self-conscious about what I eat. And I think we can have a bigger influence on the younger generation.” The two Berry brands came to Healthy Ventures by different routes. The company gained a majority stake of Berry Sleepy last year from a couple in Kansas, who created the natural sleep aid capsules made from a blend of tart cherries, passion fruit and goji berries. Since Lacey’s involvement, the brand has expanded its offerings by adding 2-ounce drinkable shots of the same formula, and internally developing the Berry Awake line. The road ahead to become an influencer in the health food category will be challenging for a small company like Healthy Ventures. According to Renee Miller of the Miller Group, which specializes in marketing food products, the naturals category has been growing rapidly, and with that, has become a highly competitive space. “There are lot of companies that are becoming exceedingly large and big companies buying smaller companies. The competition is fierce,” said Miller. “If they don’t have an amazing product with a twist or advertising funds to reach the customers, it’s going to be an uphill battle.” Sleeper brand According to Lacey, Berry Sleepy was already gaining momentum before his involvement. The product was developed by Adrienne and Greg Doring in Kansas few years ago. The couple had a hard time getting quality rest while raising their three kids. This prompted the Dorings to partner with a pharmacist to develop a sleep aid formula that was natural and non-addictive. The product proved to be an effective one, which motivated the couple to grow and market the brand. Lacey said he met the couple last year at a natural food expo. And as a father of twin boys, he related to their situation. “The company was testing out cross-country retailers,” said Lacey. “I thought it was a great concept and got involved.” Lacey had plenty to offer when it came to securing distributors and growing a brand. He had cultivated relationships with national distributors while working as sales manager for consumer goods giant Nestle S.A. and Procter & Gamble Co.’s Gillette brand. Since his involvement, Lacey said the company has secured distribution agreements with convenience stores, Bed Bath & Beyond Inc., and the Whole Foods Markets subsidiary of Amazon.com Inc. Also, the company is negotiating for distribution in major pharmacies. But more valuable than his experience in distribution may be his experience with natural foods. Crunchies was a company that Lacey had built from the ground up since 2005. The company grew rapidly, even tripling sales in 2012 thanks to distribution deals with large retailers like Whole Foods, Sprouts Farmers Market Inc. and Costco Wholesale Corp. However, Crunchies eventually found itself in a large debt with its supplier Chaucer, which ultimately took over the brand. Lacey said growing and marketing his new venture will be more effortless than his experience with Crunchies. “When you start in your garage with an idea and escalate it over a tough economy, all the while developing a new category like freeze-dry, that’s a lot to go through,” said Lacey. “We are now moving lot faster because the sleep category is much larger.” Once in control, Lacey expanded the Berry Sleepy line because he found that there wasn’t a lot of innovation when it came to delivery method of sleep aids. “We did market research and found that lot of people didn’t like taking capsules. So, we decided to explore sleep shots,” he explained. Lacey thinks the Berry Sleepy brand will be a hit with baby boomers. For the younger generation, he has developed Berry Awake, making sure the products are on trend with where the market is going – non-GMO, made in America and vegan. “We are targeting people who are looking for the Five Hour Energy alternative,” said Lacey. “Coming from the food business myself, I know that it is very important to know where the trend is going.” Although it may sound counterintuitive for a company to sell products with opposite effects, the duality in Berry brand marketing is a common strategy, according to Michael Rosenberg, vice president of McDill Associates, a marketing company in northern California. Rosenberg said the opposition may bring cohesiveness to the brand, because it is positioning itself as a natural remedy to your body’s energy issues. “It also helps to have more than a single item. If you have multiple products on a shelf, it can create a billboard effect,” he said. “One lonely package on the shelf does not nearly have the impact of three.” Natural goes mainstream According to data, the natural food category has exploded in the last few years. The category is a complicated one, as the U.S. Food and Drug Administration does not have specific guidelines on what constitutes “natural.” However, as the record breaking $43 billion in the organic foods last year may demonstrate, the trend has been shifting to naturals for a while. Rosenberg said the natural food category is on the uptick and continues to grow every year. “Amazon buying Whole Foods is a great indicator that the natural food market is growing massively,” he said. “All the major food markets have added natural sections to their offerings. It has become mainstream.” For example, when Kashi was acquired by Kellogg Co. in 2000, it signaled that natural was in. In the eight years since the acquisition, Kashi’s sales grew 24 times. In 2014, Annie’s organic foods was acquired by General Mills for $820 million. But an expanding market means growing competition. Miller, the food consultant, attended last year’s Expo West in Anaheim, and saw four dozen companies offering sleeping aids. The category is dominated by melatonin, a popular supplement, she noted. “More and more people are looking for alternatives to prescription drugs,” said Miller. “If they find an over-the-counter product that works and is not addictive, they will be drawn to it.”
