How a digital-first approach helped RXBar reach its $600M valuation

October 12, 2017

Since its founding in 2013, RXBar has gone from two childhood friends making protein bars in a home kitchen to an acquisition by the Kellogg Company to the tune of $600 million.

The timing was right for the startup’s plant-based, minimally processed products — its launch coincided with the Whole30 diet’s rise in popularity. But much of the company’s growth can also be attributed to painstaking attention to detail in its e-commerce and digital marketing operations.

“We started with e-commerce, which was special because it allowed us to control the consumer journey from beginning to end,” said director of digital marketing Charlie Hart. “We owe our success to how we built our digital ecosystem, and our approach to data and understanding consumers and their needs.”

RXBar built its digital-first approach in part from necessity. The number of nutrition bars on the market more than quadrupled between 2005 and 2015, making it tricky for founders Peter Rahal and Jared Smith to convince brick-and-mortar grocery stores to take a gamble on their product. So the fitness enthusiasts decided to set up shop online and sell directly to consumers.

In Hart’s view, owning the customer experience from end to end helped the company stay nimble in a way that wouldn't be possible if they had started out in grocery stores.

“If you have a big in-store shopper marketing program, you’re getting information passed back to you months down the road,” said Hart. “E-commerce is immediate, and you get feedback immediately from your customers and from the advertising you do. That’s allowed us to move quickly, test, learn and become a big player in the space, competing with legacy brands.”

For its first two years, RXBar relied primarily on Facebook and Google ads to market its products. But over the past year and a half, the brand has scaled its marketing operation to cover more than 30 channels.

Each channel gave the company new insights to bring back to existing platforms. But in Hart's view, the process of iterating on strategies for a sprawling digital marketing landscape was more valuable than any particular insight.

“It’s not about discovering one data point that shifts the business,” Hart said. “It’s not about finding one audience that sticks. It’s about scaling our testing and learning strategies so we can find the 30 or 40 audiences that stick.”

RXBar has also put an emphasis on allowing consumers to subscribe to its product, rather than going back to its site to buy more when they run out. Hart said such seamless purchasing experiences, popularized by companies like Birchbox, Loot Crate and Amazon, have driven a significant shift in consumer buying habits over the past two years. He declined to share the extent to which RXBar’s revenues derive from the subscription model, but he said it’s an “important part of the business.”

In its new partnership with Kellogg's, which will increase RXBar’s brick-and-mortar distribution, the company will continue emphasizing digital commerce and using store data to understand customers better — wherever they may be.

To do that, Hart will continue growing his team. The company is still hiring for a number of digital marketing roles at its River North headquarters.

 

Image via RXBar.

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