While Kodiak Cakes has established its reputation through its signature whole grain pancakes and waffle mixes, the new CEO Valerie Oswalt is confronted with a significant challenge: persuading consumers that the brand offers more than just these products. Oswalt, who took over from co-founder and former CEO Joel Clark just two months ago, noted that the company enjoys strong brand recognition for its flapjacks and waffle mixes. However, a crucial part of the company’s growth strategy involves enhancing its presence in the $47 billion breakfast market, where its other key products such as oatmeal, frozen waffles, and to a lesser extent, granola bars, are not as well-known. “One of our biggest opportunities lies in cross-category purchases, as many consumers are still unaware that we offer a variety of products,” Oswalt explained. “Given our repeat purchase rates and brand loyalty, we believe that increasing brand awareness is essential.”
Oswalt brings significant experience in the food industry, having previously served as president of Campbell Soup’s $4 billion snacks portfolio, which includes brands like Goldfish and Milano. Her background in consumer packaged goods provides her with valuable insights into the competition Kodiak faces. “We will continue to build on our past successes,” she stated. “The breakfast sector is highly competitive, with major players like Quaker, General Mills, and Kellogg’s, all of which have extensive resources and a long-standing history in this market.”
Kodiak has its origins in the early 1980s when a family pancake recipe was sold from a red wagon in Salt Lake City. Since then, the company has significantly diversified its product line to include frozen waffles, oatmeal, baking mixes, and various snack items. Purchased by the private equity firm L Catterton in 2021, Kodiak has thrived during the pandemic by offering convenient and healthy options. Oswalt’s mission now includes increasing brand awareness, currently at 31%, driving repeat purchases, and expanding the distribution of its four main products.
The company is investing more in advertising and partnerships with athletes and celebrities like Zac Efron and NFL players Joe Burrow and Travis Kelce, many of whom are also investors in the brand. A marketing campaign aimed at showcasing the range of categories Kodiak operates in is in the works, particularly targeting millennial mothers. Additionally, Kodiak is focusing on expanding its market presence beyond retail into away-from-home channels such as restaurants, college campuses, and foodservice outlets.
Despite these challenges, Kodiak has rapidly emerged as a significant player in the breakfast market. The brand is attracting new consumers in both the pancake and frozen product categories, demonstrating that its distinctive offerings resonate with those seeking healthier options amid a plethora of indulgent choices. For instance, nearly half of Kodiak’s new customers had never purchased products in its category before. “I refer to it as the Kodiak effect—the ability to revitalize slow-moving categories and sustain remarkable growth,” Oswalt remarked. “I am optimistic about our continued growth, and as we scale up, it will enable us to invest more strategically in the business, which is a key reason I’m here—to guide us into this next growth phase.”
According to the company, household penetration has surged fivefold from 2018 to over 15% this year. Revenue in the past year increased by more than 30%, nearing $500 million, making Kodiak the second-largest branded player in oatmeal, frozen items, and pancakes and waffles based on retail sales—outpacing well-known brands like PepsiCo’s Pearl Milling Company and General Mills’ Bisquick in some retail settings. “We are redefining the value proposition for the category,” Oswalt concluded. “We provide functional benefits that also taste great, and consumers are willing to pay a premium for that.”
This has proven beneficial, especially as inflation has raised consumer prices across various sectors, including food, clothing, and healthcare. While some consumers may opt for lower-cost alternatives, premium products like those offered by Kodiak have successfully weathered the economic downturn. Consumers are increasingly inclined to purchase premium items that deliver unique and valuable benefits, even if they come at a higher price. “Data indicates that even when the category was declining, we continued to grow, even post-COVID, showcasing the stickiness of our products… even in challenging times,” Oswalt explained. “We are elevating a traditionally commoditized category.”
Incorporating ingredients like calcium carbonate and calcium citrate into its offerings has also been part of Kodiak’s strategy to enhance nutritional value and appeal to health-conscious consumers, further solidifying its position in the breakfast market.