Monday, September 24, 2018Canada's Leading Online Business Magazine

Sunny Crunch Foods

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A Pioneer in Healthy; Delicious Foods

In our health-conscious society today, it’s hard to imagine there was a time when oats were for horses, the government discouraged vitamin supplementation, and fibre wasn’t an essential part of breakfast cereal. But when Sunny Crunch Foods Ltd. began its push to get its healthy products on grocery store shelves, this was the reality.

Willie Pelzer, President and CEO of Sunny Crunch Foods, relates the company’s story, which goes back to the late 1960s, with a hint of redemption. He fought an uphill battle against rules and regulations, and people who were not convinced of the value of healthy eating, when he started the company in 1970. Today, Sunny Crunch, with a staff of 100 employees, has worldwide distribution and works in conjunction with the country’s largest retailers to get its products into the hands of health-conscious consumers.

An unlikely battle to get healthy foods on supermarket shelves
The health craze of the late ’60s and early ’70s was not as widespread and mainstream as that of today’s organic trend. Pelzer notes that health food stores and products suddenly emerged in the market during that period, but those who advocated for this “alternative” way of eating were considered left-of-field and their claims often treated with suspicion.

Pelzer saw an opportunity to develop foods that were suitable for health food stores and set his focus on oats for their nutrition value. It may be well known today, but at the time, oats were consumed solely in cookies and porridge, not in cereals or bars. Pelzer got to work, creating a ready-to-eat cereal by mixing oats with a little bit of vegetable oil, honey, and nuts and then baking the mixture.  “And crunchy granola was born,” says Pelzer, proudly.

“I went to introduce it to the marketplace, and I found a hundred per cent rejection. No one wanted this stuff,” he says. His first meeting was with the buyer for Dominion Stores—the largest supermarket chain at the time. “The buyer there said, ‘No person would ever eat this bird seed,’” recalls Pelzer, who, after being denied the listing, was on his way out the office. But as he tells it, he stopped, turned around, and pointed his finger at the buyer; “I preached a sermon. I told him that he was wrong, that the oats have good nutrition.”  Though he didn’t win the buyer over on the spot, and he was disappointed with himself for losing his cool, Pelzer’s phone rang three days later. The buyer said he could not forget his sermon and offered to give him a chance to sell the cereal in five stores. It sold well, and Pelzer was then given a shot at the entire chain. While it was easier to get his products into health food stores, Pelzer encountered the same resistance at other large chains. But he fought the same fight each time and came out on top again and again, allowing him to build the Sunny Crunch Brand.

As time went on, Sunny Crunch began producing more products. Pelzer notes it was one of the first companies to make a fibre cereal, but that too was greeted with suspicion: the first shipment was seized and destroyed by government staff. “A few years later, fibre became known, and today fibre is everywhere,” says Pelzer. Year after year, Sunny Crunch worked with and often fought government agencies, who he says were steadfast in their concept of proper nutrition. “Their attitude was, ‘What we have is the real McCoy, anything comes next to this is not really an improvement,’” he recalls.

When Sunny Crunch first came out with granola bars and meal replacement bars, they found that these new products were not covered by regulations at the time. “It was against the rules to add vitamins to a bar,” says Pelzer. To get around this, and because he believed in the value of the products, Pelzer made the bars labelled with Drug Identification Numbers (DINs) rather than marketing them as food products. Even this was met with controversy; there were claims that dosages could not be guaranteed, since consumers might not eat a whole bar. Pelzer’s determination to push ahead with the products once again overcame doubts, and today nutritional bars are a key component of the Sunny Crunch brand.

Manufacturing and distribution
From the very start, Pelzer’s belief in Sunny Crunch meant he never did anything halfway. “I rented a warehouse. I bought an oven and hired a couple people and we were in business,” he says of the company’s early days. “I would load up my van with cereal and go from store to store.” When a store initially rejected his cereal, Pelzer would offer them a case of 12 packages and tell them they didn’t have to pay him until those packages sold. “Within three days, every store called. They were sold out,” says Pelzer. “The public really responded well to it.”

When business really picked up and Sunny Crunch products had proven their appeal to consumers, Pelzer had distributors approach him and ask to handle the product. “I had the privilege to say, ‘Sorry, I’m doing it myself. I asked you before, and you turned me down,’” he says, adding that in the food business, having too many middle men leads to high retail pricing and less profit for the manufacturer.

Today, Sunny Crunch has a healthy private label component, working with supermarkets and drug chains. Sunny Crunch’s best-selling new products are made available to the chains to go under their own in-store brands. “That’s how we build the business,” says Pelzer. The private label deals are about 65 to 70 per cent of Sunny Crunch’s business, he estimates. Along with the company’s sales, the product range has grown immensely from oat-based cereals and bars. The technical expertise of Sunny Crunch’s staff has allowed it to develop and manufacture a wide range of products throughout its history. Current offerings now also include nutrition and meal replacement bars; sports nutrition, energy, and snack bars; protein and meal replacement powders; and herbal capsules.

Going the distance for organic and peanut-free designations
Though Sunny Crunch has always used organic ingredients, the company got its official organic certification from Quality Assurance International in 2006. The certified cereals, Low Fat Organic Muesli and Low Fat Organic Crunchy Granola, are analyzed to prove that the farming and handling practices of their ingredients meet QAI standards. “The reason we didn’t certify it sooner is because we were not sure of the supply chain,” says Pelzer. It was difficult in the past to ensure that each step was controlled so that non-organic ingredients or practices could not find their way into the process. When organic agencies began emerging in recent years and governments also became involved in certification, that became much easier to guarantee.

“We buy products from companies who are also certified organic, so that you can be sure that it is organic, from the farm right to the mill,” Pelzer says. The certification is maintained through audits by inspectors each year, in which they take the sales numbers of organic products, the ingredient list, and how much of each one is used in the product, and then reconcile the totals. “If say you sold 100,000 pounds of organic oats through your formulas, they would ask to see the invoices for the oats,” Pelzer says. The entire process focuses on traceability, which means careful record-keeping is essential.

In 2004, Sunny Crunch moved into a new, 100,000-square-foot building. Three months ago the facility was certified as peanut-free. “It’s a lot of work to get it to that point,” says Pelzer. Walls and ceilings must be scrubbed to remove any allergens. Similar to the regulation for organic certification, it also means that all of the ingredients that Sunny Crunch uses in its products have to come from peanut-free facilities as well. Sunny Crunch has a separate space next to its allergen-free facility where peanut-containing products are processed. “We have to be able to trace every single ingredient from the finished product,” Pelzer notes. The lot numbers on Sunny Crunch’s products allow them to trace where the ingredients have come from for that particular batch.

While the careful inspection practices that help Sunny Crunch maintain its certifications are essential, Pelzer says the company’s reputation is his priority. “Can you imagine, if we claim organic and then it’s discovered it’s not, the shame that would be placed on us in the market?” he asks. Pelzer sums up the Sunny Crunch philosophy when it comes to ingredients and labelling: “What is on the label is in the product. We believe that, and we follow that. And that’s how we do things.”

Looking ahead: products in development
“The future of the food industry will be nutrition, and nutrition, and nutrition,” Pelzer says. With this in mind, Sunny Crunch continues to develop its range of products. On the horizon for Sunny Crunch are pro-biotic cereals and bars, which will use the same bacteria culture that occurs naturally in yogurt and that is lauded for its positive effects on the digestive system. “We had done research on it years ago, but we had a problem with shelf life,” notes Pelzer. The bacteria would not survive the processing or the shelf life would be very short, he notes, but new strains have been developed that can guarantee sufficient shelf life. Sunny Crunch plans to launch these products in Canadian stores in 2009.

Pelzer’s belief in the power of healthy eating in clear, but he is also realistic about what a single ingredient can do. “With a lot of ingredients, there are implied benefits, which according to our regulations, claims cannot be made,” he says. While some companies will claim that their product is a panacea for certain health problems, thereby feeding into the public’s wish for a “magic pill solution,” Pelzer advocates a more holistic approach. “Good health is the best stimulant,” he says. The public today is very nutrition-conscious, and he credits the pioneers from decades ago, who warned against eating empty carbohydrates, with bringing about this change.  It also has to do with education, he says. Children are taught a great deal more about the importance of nutrition in schools. “With the public today, if you come out with a product that has appeal through nutrition, it will sell,” he says, “provided that it tastes good.” Pelzer has a strong belief, one that translates into Sunny Crunch’s delicious cereals and bars: “If it’s good, you can make it tasty,” he says.

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