I am in the unenviable position of making a small number of our customers upset today. Before I do that, I am going to write a bit about what's brought us to today.
As many of you know, Kinnikinnick has been making gluten free products since 1991. 23 years. For many of those years, Kinnikinnick was one of 2 or 3 nationally available manufacturers, at a time when most people had never heard of Gluten Free or Celiac. I've written a bit about our history and how times have changed previously.
The changes in the gluten free market are driven by multiple factors.
1) The radical improvement in gluten free products from almost all manufacturers has changed the kind of products demanded by consumers. Most consumers are simply not going to put up with tasteless, dense "first generation" gluten free products. This has driven innovation across the entire sector (and driven some manufacturers from it)
2) Multinational, multimillion dollar companies have moved into the market. As gluten free has gone mainstream, it has become a target for these very large companies, changing the once entirely family owned market into one controlled by companies traded on the stock exchange. This drastically changes how a company that is not backed by hundreds of millions of dollars (such as Kinnikinnick) operates. This has caused a hollowing out of the middle range of the market. You're either big and multinational or small and local. There is very little room for a medium sized gluten free manufacturer in today's market.
3) Distributors and retailers have brought gluten free into the mainstream, which is great, however it has changed the both the way manufacturers deal with them and the distribution model. Years ago, all we had to do was release a new product and it would be automatically picked up by virtually all of our distributors, immediately. The market simply was starving for products. These days, it can take a year or more to get a product listed. And since there are so many more manufacturers, there's no guarantee there will even be shelf or freezer space for a product. Also because there are so many products out there, any products that don't sell well immediately are dropped by distributors very quickly.
4) The internet is no longer the gluten free consumer's first choice. In 1998, Kinnikinnick was the first gluten free company in North America (and maybe the world) to deliver fresh bakery products by courier. At one point direct sales to consumers amounted to 80% of our sales. We were in the top 5% of UPS shippers in Canada for several years running. Now that gluten free is mainstream and "everywhere", our internet direct sales are a small fraction of what they used to be.
Small batch production for direct customers is no longer economical.
5) Increased competition has caused a major change in manufacturing process. 15 years ago, Kinnikinnick sold 21 different kinds of bread and every one of them had some distribution. Today, we basically have distribution for our soft white and multigrain bread and distribution for our 2 new soft breads just coming on line. These breads are outselling all of our old breads combined by several hundred times.
What this all boils down to is this. We need to make a lot of very high quality bread, as efficiently and cheaply as possible.
The days of the small batch, made by hand products have been numbered for several years. Today they are done.
We regret to announce the discontinuation of the following products effective November 1, 2014.
- White Sandwich Bread
- Tapioca Rice Bread
- Sunflower Flax Bread
- Italian White Tapioca Rice Bread
- Candadi Yeast Free Multigrain Bread
- Robin's Honey Brown Bread
We know that for a small number of our customers, this will be very unwelcome news, however, this decision is based on all the factors outlined above. For the last year or more, these breads have been dropped by virtually all distributors and we have been producing every loaf at a loss. This cannot continue.
Answers to some of the questions I know we'll get.
- This is a permanent decision.
- We won't be able to release the recipes for any of the discontinued products.
- We won't be taking special orders for these products.
- We don't have yeast free or egg free bread alternatives at this time. Our new soft bagels are vegan and do not have egg so you may want to try those (they do have yeast).
We understand this is a difficult and unwelcome announcement for some of you and we wish there were options but the market conditions we find ourselves in simply make producing them impossible.