By Cindy Green

Minnetonka, Minn. -- Heart-healthy oats swirled up as a decadent dessert? Sounds contrary, but "OatsCream" frozen treat is surprisingly like dairy soft serve -- with all of oats' soluble fiber intact.

"You could serve it to your kids for breakfast," says Neal Shapiro, sales manager at American Oats, Inc. OatsCream is made without sweeteners or artificial ingredients, just oats, water and natural flavors. Soft serve machines have started dishing up the soft-serve throughout the Twin Cities, at food co-ops, Whole Foods and the Good Earth restaurant.

Small but moving fast
The unusual use for oats is the brainchild of two Minnesota entrepreneurs; though their backgrounds differ, both have had a long history with oats. Buck MacDonald, of Scots descent, grew up on oat porridge. After MBA and law degrees, and a stint in international banking, he turned entrepreneur, starting up art galleries, specialty shops and a restaurant.

MacDonald founded American Oats, Inc. in 1989, and was tinkering with a frozen oat product when he teamed up with Don Maxwell in 1994. Maxwell, a food technology consultant and a former member of General Mills' R&D team, had worked on products like Cheerios.

"We recognized, early on, that the composition of oats lends itself very well to soft serve. So we had a good hunch this was possible," Maxwell says. With AURI lending funds for product development and manufacturing, the team began production at a Minnetonka facility in 1996. OatsCream is packaged as a liquid mix for soft serve machines.

Maxwell says developing a product in an entrepreneurial company is strikingly different from General Mills, "where there are experts and specialists that do every known thing under the sun." Here, "it's a wildly unstructured environment, but we have the advantage that we can move fast."

Treat the kids
OatsCream tastes a bit like dairy soft serve, but not as sugary. A delicate, slightly sweet flavor with a hint of oats complements its silky smooth texture. Adults, expecting the taste of ice cream, might be puzzled at first by the taste. But youngsters take to it. Two-year old Sulia Altenberg, shopping with her dad Eric at North Country Co-op in Minneapolis, dipped in for one mouthful after another. "When you see a little kid who really likes the product, you can suffer through a lot of corporate problem solving," Maxwell says.

OatsCream is swirled up in cones and cups from the same type of soft-serve machine used by Dairy Queen. It comes in chocolate, cappuccino, black cherry and mango flavors, and an 8-ounce serving costs around $2.00. "We're positioning as a premium product," Maxwell says. "We don't want a cheap replacement for milk." OatsCream isn't packed in take-home containers yet, but some food co-ops are doing their own packing and freezing for customers.

The team has resisted suggestions to add sugar, wanting OatsCream to be completely nutritious. "The average American eats a third pound of sugar a day," MacDonald says.

OatsCream contains about the same amount of soluble fiber as oatmeal -- almost a gram per serving. (The FDA has approved a claim that three grams of soluble fiber a day can lower cholesterol and reduce the risk of heart disease.) And OatsCream's fat content is a low 1.5 grams per half cup. "People who eat it are loyal, almost fanatical," Maxwell says, noting that one in five Americans are lactose intolerant and can't eat regular ice cream.

American Oats has patented its process for turning cooked oats into a whipped dessert. "We're not aware of anything else like it on the market," Maxwell says. Other frozen desserts made with grains such as rice have added fats and sweeteners, but oats' natural fats and soluble fibers make the dessert creamy without emulsifiers or stabilizers.

Moving into position
A year ago, Crystal Schachterle joined American Oats as a volunteer administrative coordinator after trying OatsCream at her natural food store. "It's worth every minute I've put in. I eat OatsCream three times a day," Schachterle says, explaining it doesn't leave her with the blood sugar letdown she gets from ice cream.

Schachterle is part of an American Oats' management team that is expanding the experience it needs to launch a new enterprise, from product development to customer service to sales. Several months ago, food-marketing expert Neal Shapiro joined the team. He formerly owned the company making Kettle potato chips.

"What impresses me most about American Oats is all the experience on their team," says Steve Olson, manager of AURI's Marshall office. "And they're also careful in how they approach things; they're not running loose."

OatsCream distribution recently expanded into Madison, Chicago, Milwaukee and Indianapolis, and now American Oats is tapping California markets. Even a private school in Burbank is considering the frozen oat treat for school lunches, initiated by OatsCream's exhibit at an Anaheim, Calif. food show. "We're sending samples all over the country and to other countries," Shapiro says.