North Branch, Minn. — Persistence, dedication to quality and a personal approach to marketing: these values are helping a Minnesota entrepreneur build a national market for premium granola bars.

Olympia Granola makes hearty 3-ounce granola bars in flavors like lemon chamomile, mocha mint, green tea zest and honey almond. The five-year-old company is owned by North Branch, Minn., food industry veteran Bill Forsman. This fall, Forsman expanded his product line, adding a new granola bar that tastes like the campfire classic “s’more,” plus three new 1.25-ounce snack bars.

Photo by Rolf Hagberg

Olympia Granola bars are made from high-quality ingredients, including rolled oats from the Red River Valley, sunflower seeds from Crookston, honey from the St. Croix Valley, almonds, coconut, crispy rice bran and sea salt.

The bars are a good source of protein and fiber, and have no dairy, wheat or trans fats. A transparent wrapper reveals the simple ingredients, which are gently rolled together for an appealing texture — not hard and dry, not pasty or gummy. “They taste like something your grandma makes,” Forsman says.

The bars, which sell for around $3, are aimed at health-conscious consumers who read food labels and want “a natural product that’s a good source of protein and energy,” Forsman says. Olympia Granola customers “value the hand-crafting we do and are willing to pay a premium for a premium product.”

“The bars are delicious,” says AURI food scientist Charan Wadhawan, who helped Olympia Granola develop and test recipes. “Very nutty and tasty.” Although they are fairly high in calories — about 350 calories and 20 grams of fat per bar — “the calories are from good, nutritious ingredients,” Wadhawan says. “It’s wholesome nutrition.”

Food industry veteran

Forsman, a Minnesota native, has more than 20 years of food processing and marketing experience. He helped Crystal Farms expand its cheese and dairy product distribution. Later, he worked on retail product launches for Lloyd’s Barbeque, the first company to offer fully-cooked meat products at supermarket meat counters.

“That’s where I got my education on value-added food products,” says Forsman, who has a business degree from St. Cloud State University. His experiences in the food industry also taught him the importance of having “quality ingredients and a unique product.”

In 2007, Forsman was casting around for a new business opportunity. Early one morning, he was sitting in a restaurant before a business meeting. “I was thinking, wouldn’t it be neat if my next venture could be something my whole family enjoyed.”

Photo by Rolf Hagberg

Forsman and his wife, Sandra, have seven children, ages 7 to 23. They lead an active lifestyle — both Sandra and Bill are longtime runners, and Sandra and the older kids do marathons and triathlons. The family was already working together on a little cottage business making granola cereal.

One of the Forsmans’ daughters had battled anorexia. Among the few foods she would eat was a nutrient-dense energy bar called Olympic Granola. “It was a wonderful product,” Forsman says, but the unsophisticated packaging and homemade appearance made him curious about the company’s story. He saved a label, stashing it in his briefcase. Pondering his future that morning in the restaurant, he recalled the energy bars that had helped his daughter and pulled out the package.

When he checked out the company on-line, he discovered that the mom-and-pop business had shut down because of family issues. On an inspiration, he called from the restaurant, not realizing he was calling the Olympic Peninsula in Washington state. “It was 5:30 in the morning there, and I got them out of bed!”

The Forsmans flew out to Seattle to meet the creators of Olympic Granola, and before long, they had acquired the company name and recipes. They moved operations to North Branch, and with AURI’s help, Bill began a product makeover. The new enterprise “forced me to leave my comfort zone and apply some of the things I’d learned.”

Humble beginnings

Forsman worked with Charan Wadhawan at AURI’s Crookston food lab to refine the original recipes for longer shelf life and develop some new flavors. Wadhawan also put together nutrition facts for the labels. “Charan was wonderful to work with,” Forsman says. “No way could a small business like ours afford to develop and test a new food product without assistance.”

Forsman started out manufacturing the granola bars — still called Olympic Granola — in the commercial kitchen of a local church. Later, with an SBA loan, he bought a vacant Frito-Lay facility in North Branch and converted it to a granola bar factory.

At first, most of the processing and packaging was done manually — mainly with family labor. As sales grew, Forsman automated and now manufactures private label products in addition to his own brand. He employs a combination of full-time, part-time and temporary workers, and family members still help out occasionally.

Early on, Forsman suffered an expensive setback. Just as he was gaining some brand recognition, “we were notified by the U.S. Olympic Committee that they own the word ‘Olympic’ and we needed to ‘cease and desist’ using the word. … All our labels, packaging, sales materials, website — everything had to be changed.” The company became Olympia Granola, and Forsman resumed the painstaking task of building a brand from scratch.

Dominated by giants

The overall granola bar market reached $910 million sales in 2009, according to Specialty Food Magazine. But sales volume has been flat since 2007, as cereal and snack bars lost ground to competing snack foods, such as trail mix and yogurt. Successful new products in this category emphasize health benefits, fiber, all-natural ingredients and variety in flavor and taste, the magazine reports.

That trend is “very positive for us,” Forsman says. “You can see and read what’s in our bars. They look great, read great, and taste even better.” Consumer surveys consistently show that “taste is the number one criteria for picking food,” Wadhawan adds.

The granola bar segment is dominated by a few very large players, including Kellogg, Quaker Oats and Kraft Foods, makers of top-sellers such as Quaker Chewy, Nature Valley and Kashi TLC. “They pump a ton of resources into marketing,” Forsman says. “It’s difficult to compete with these goliaths. You need a unique product and the ability to persevere in a very competitive market.”

Forsman’s sales strategy is focused on “one customer and one bar at a time.” Without a big advertising budget or money to pay supermarket slotting fees, he relies on sample demonstrations to spread the word. “If you have a unique product, that person-to-person contact is really the only way to do it. If people like your product, they tell their friends. They can help you a lot.”

In 2009, Forsman got a nice break. The Sierra Club named Olympia Granola bars one of the top two “ecofriendly” energy bars out of a field of 28 competitors. Taste testers liked the “hearty, well-balanced mixture of nuts, oats, seeds and chocolate,” the company stated. A Sierra Club spokeswoman, delivering the news, told Forsman: “Your small family business has arrived!”

The national exposure boosted orders. Forsman doesn’t disclose his company’s sales or volume, but five years after launching, Olympia Granola bars are now distributed in all 50 states, he says. Most sales come from the East and West coasts. Primary retail outlets are natural foods stores and co-ops, coffee houses and health clubs. Fans, who weigh in on the company’s Facebook page, include “everyone from soccer moms who want a nutritious snack for the kids, to athletes, to hikers and backpackers who want a meal on the go.”

Forsman works with several wholesale food distributors and ships directly to retail vendors. Consumers can buy granola bars direct from the company’s website.

Lessons in humility

Marketing a new food product is not for the faint-hearted, Forsman says. “The food business is one of the most competitive industries around. And low margins mean you have to sell a lot of product. Anybody in the food industry gets a lesson in humility.”

What keeps him going, Forsman says, is “a passion for our product line,” and the chance “to change lives.”

AURI and Olympia Granola

Charan Wadhawan, AURI food scientist, helped redesign and test recipes for all-natural granola bars high in fiber and protein.

Idea to opportunity: Food entrepreneur purchased a granola bar recipe and brand name from a shuttered Washington state company and decided to upgrade and market the bar.

Outcomes: Minnesota-made Olympia Granola bars are now sold in every U.S. state.

To purchase Olympia Granola bars, go to www.olympiagranola.com.