Grass Fed Coffee taps into rising interest in the keto diet to market ready-to-drink butter coffee

07-Feb-2018 - Last updated on 19-Jul-2019 at 09:00 GMT

Grass Fed Coffee, a ready-to-drink version of butter coffee, is finally ready to hit select store shelves at the end of the month – nearly two years and several “hiccups” after the brand successfully raised more than $86,000 on Kickstarter to perfect and scale-up its beverage.

“After we completed our Kickstarter campaign we had a few delays and hiccups along the way, but once our backers received their product, they were so excited and said it exceeded their expectations. I mean, I would wake up and there would be 30 messages every morning with feedback that this is amazing and the greatest product, and that really encouraged us” to continue even when there were unexpected hurdles or delays, company founder John ‘Sonic’ Ban told FoodNavigator-USA.

Company Principal Mark Yu agreed noting that as frustrating as delays in the development process were, the company never wanted to compromise on quality for speed.

“Once we began to produce the coffee, we didn’t want to a product that we didn’t fully believe in and we were not fully happy with,” he said. “So, it took us awhile, but we are very, very pleased with where we are now.”

New packaging offers a longer shelf life, better value

One of the major changes the company made in the last two years to improve the quality of its product was to switch from a can to a Tetra Pak carton.

“Originally, we were planning on launching with a can, but then we switched to Tetra Pak to get a little bit more value per unit – about three more ounces per unit – and it also increased the shelf stability and life of the product,” Ban said.

The switch also allowed the company to use an aseptic, hot fill process, which was better suited for the high-fat product, Yu said, noting that the duo “couldn’t be happier with the end result.”

The new packaging and extra time also allowed the company to design a smaller pack size that would make initial trial easier on consumers.

“Originally, we were just going to do a 12-pack, but now we have a 3-pack … which is easier for consumers to try because we are a higher priced product that retails at about $4.99 a bottle, so a case of 12 is a big investment just to try the product. … With the 3-pack, we can reduce this price to under $20,” Ban said.

Everything takes longer than expected

Some of the production delays also were out of the company’s control, including a long-wait for access to a co-packer.

“I think the assumption for people who don’t know the business is that if you have an idea or concept, then you can just take it to a co-packer and just pump stuff out immediately. But the thing is there is so much that is out of your control. Like, you can prepare your product, but after that you really are at the discretion of the co-packer and their schedule,” Yu said.

“Everything takes so much longer and is so much more expensive than what people imagine it will be. … And there really are no shortcuts, which is good to know at the beginning,” he added.

Capitalizing on the rise of keto

While the delays frustrated the young company, Ban said they also played to its favor in that at the time of the Kickstarter campaign he worried that consumer interest in butter coffee could have been waning, but now with the high-fat, high-protein keto diet going mainstream, the product has a new lease on life.

“It seems like the whole keto diet is just starting to gain momentum and hit the mainstream. About two years ago, keto was not as big as it is today. And I feel like keto is still going to get bigger and will continue to grow because of the profound effects that result from it,” Ban said. “So, now is the perfect time to come in with the butter coffee.”

Pinning the product’s marketing on keto could be risky as the diet is highly controversial and some dieticians are starting to speak out against. They warn of malnutrition, starvation and high levels of “bad” cholesterol, which his linked to heart disease.

While this could give some consumers pause, Ban and Yu say there will be plenty of people who embrace the diet in a healthy way.

“I was pretty skeptical about the diet myself, but then when I tried, I have seen some unbelievable results,” said Yu, who added that in just a few months he has “lost 30 pounds and has a six pack for the first time.”

Ban also noted that he and Yu just had their blood work done and it was “great.”

Yu also noted that the brand is uniquely positioned to tap into consumers’ demand for better sources of nutrition because the butter it uses in is product is, as the name suggests, grass-fed.

“Grass-fed butter is higher in heart healthy vitamins than grain fed butter, and even though you are eating the same fats, the quality of fat is much higher for grass fed butter, as opposed to that from grain fed cows,” Yu said. In addition, he noted, “the color of grass fed butter is outstanding. It is brilliantly yellow, whereas grain fed is super pale and it looks unhealthy.”

Ban adds that most grain fed cows also consumer genetically modified food, which “is another downside,” whereas the grass fed butter in the company’s coffee is Non-GMO Project Verified.

To best capitalize on the marketing potential of keto and its front-runner paleo, the company will heavily market and distribute its product in gyms and among fitness-focused consumers. It also will distribute its product in the natural channel in Los Angeles and California to start, with plans to eventually roll out to other markets.

As the company expands beyond the most dedicated fitness enthusiasts who likely already believe in the health benefits of a grass fed dairy and butter coffee, Yu acknowledges that the brand will have to educate consumers about the product’s benefits. It will do this through demonstrations and direct communication on the product and social media, he said.