Supply-Side Memo: A 'Bare-Naked' Success Story

Bryndon Synnott and Kelly Flately outside Stew Leonards' in Norwalk, Connecticut. (Photo: courtesy Bare Naked, Inc.)

Early one morning about five years ago, famed independent grocer Stew Leonard Jr., founder and president of the Stew Leonard's chain of superstores, came upon two young people--Brendan Synnott and Kelly Flately--waiting for him in the lobby of his Stew Leonard's Dairy store in Norwalk, Connecticut. The pair were holding a serving tray, which contained their Bare Naked brand granola, milk and a banana. They were waiting in the lobby to catch Leonard and pitch him on their homemade granola.

Leonard tasted the granola and loved it, talked briefly to the two young entrepreneurs, and ordered 20 cases of the hand-baked granola created by Kelly Flately for his store.

As mentioned, that was just five years ago. Late last year, Synnott and Flately sold their company, Bare Naked, to the Kashi division of food industry giant Kellogg Company in a $122 million dollar deal that also included Kellogg's purchase of natural foods company Gardenburger, which shared an investor with Bare Naked. Bare Naked is the number 1 selling granola brand in natural foods stores, and the number 2 selling brand in supermarkets.

In an article in today's New York Times, Stew Leonard says when he heard the two granola empire builders had sold Bare Naked to Kellogg's, and made bank on the deal, he was thrilled.

Just five years ago when the pair of struggling entrepreneurs got that 20 case order from Mr. Leonard, they had to spend the entire night baking enough granola just to fill the order. Just five years later, when they sold Bare Naked to Kellogg's last year, the company had sales of $65 million, and was growing by double-digits annually.

As the Times' piece explains, the company became a local success story in Fairfield County, Connecticut. This is do in large part to the way the pair marketed their granola products: lots of personal product sampling in local grocery stores, word of mouth advertising, community-event support, and using humor to create their brand, first among the locals and then nationally.

That humorous, fun approach has been key to the company's success. For example, there's a huge sign outside their corporate headquarters building in Norwalk, that reads: "Do You Get Bear Naked?" Additionally, their website is packed with puns on the "Bare Naked" name, such as "Get Bear Naked" and "Live Bear Naked." They also sell "Bare Naked Gear" like 100% percent organic cotton "Live Bear Naked" Tee-Shirts and similar themed items like hats and sweatshirts.

By using local and community marketing techniques, as well as having a quality product, Bare Naked has built up much support in the towns where they make their granola and have their headquarters.

Of course, with the sale to Kellogg's there's a bittersweet taste in the mouth's of many locals (and it isn't from eating Bare Naked Granola), who've followed the pair's story and route to success. However, any bittersweet feelings about losing the company headquarters and the 90 jobs that go with it (Kellogg's plans to close the production facility), pale compared to the abundance of good will expressed locally for the two and their success.

For Kelley Flately, who created the granola, and Brendan Synnott, the marketing and sales chief who gained its distribution, there's some uncertainty as to what the future will hold for both of them as well. Both are under contract with Kellogg's until February 1 as part of the buyout deal, according to the Times' story. After that, they're on their own.

We aren't worried about them though. They should have enough Kellogg's money to put a roof over their heads for a bit while they figure out their next venture. There are second acts for entrepreneurs, especially for those who aren't afraid to work hard and get "Bare Naked" in the process.

Read the New York Times story by Jan Ellen Spiegel here.