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Oatbox: Knowing when to pivot

January 12, 2024

A new month, a new package at the door, a new sampling of granola from Oatbox. Longtime fans will remember the ritual fondly. However, in light of changing consumer spending habits, the Montreal-based company knew the time was right to move away from a subscription model. For the small to medium-sized business (SMB), it's a major transformation, one that sees them in completely new territory. 

The art of reinvention

"If we'd stuck to the subscription-based business model, Oatbox wouldn't be here today," says the SMB's founder and CEO, Marc-Antoine Bovet. "It just wasn't viable anymore." From granola to oat bars to overnight oats, Oatbox knew how to diversify its line of products and distribution channels to entice new customers. 

However, it was their most recent change that caught the attention of the entire agri-food industry: in June 2023, Oatbox launched its very own liquid oat base. Made in Quebec from Canadian oats, it can be used as a dairy alternative in a slew of products, including smoothies, yogurt, cream cheese, ice cream and plant-based beverages. 

"When we were looking for an oat base distributor, we discovered an untapped market," says Sophie Roy, Chief Operating Officer at Oatbox. "We took advantage of the opportunity and started making it ourselves." And with that, Oatbox entered the food processing industry.

A quality, local product 

As part of this push—which required 2 years and $10 million in investment—the company launched its own line of plant-based beverages. "There's a lot of growth in this market, more than soy and even almonds," Bovet explains. In keeping with their values, Oatbox hasn't compromised the development of its oat-based drink: there's no flour or gum included, unlike many similar products. 

"A few years ago, customers were mainly just looking for alternatives to dairy products. Now, they're not just looking for a simple oat drink, but a high-quality product. Expectations are higher." 

- Marc-Antoine Bovet, founder and CEO, Oatbox 

The great source of pride for Oatbox—some might say its baby—is its Barista oat beverage. The recipe, created in collaboration with local baristas and microroasters, spent a full year in research and development. The team was able to release a plant-based beverage which is delicate enough to highlight notes of coffee and creates a silky smooth foam. "That's where the challenge was," Bovet recounts. 

By diversifying its operations, Oatbox is increasing its resilience to industry changes and remains relevant in a particularly competitive sector. "By developing new markets and distribution channels, we're more resilient," affirms Bovet. One thing remains unchanged: the desire to put more oats on Canadian tables. 

Pop-up question

If you could go back and give yourself advice at the start of your entrepreneurial adventure, what would it be?

"You have to learn to live with hiccups when they arise and not act like it's the end of the world every time," Roy says. "You have to know when to pivot and do away with a model that just doesn't work anymore." Bovet adds: "You have to be ready to adapt at any time." 

Desjardins Advice

Innovating in food processing: 4 factors for success 

1. Understand the market

In the agri-food industry, it's important not only to anticipate consumer trends, but also to understand the needs of buyers. "Retailers and distributors play a major role in the industry, so you have to stay relevant for them as well," explains David Gagnon, Account Manager, Agriculture and Agri-Food Markets at Desjardins. Understanding the agri-food sector is key to succeed. You have to learn to deal with variable harvest conditions and farm input prices. You also have to plan for transportation, storage and distribution costs, which can be high for small volumes.

2. Take advantage of your business network 

Entrepreneurs can access a vast agri-food ecosystem. "There are associations, specialized financial partners, equipment manufacturers, mentors, investors, advisors … By working with industry players, you can develop a thorough understanding of the business environment, gain experience and avoid certain mistakes," says Gagnon. 

For example, startups can make use of incubators and accelerators to reduce their capital investment and launch projects. 

3. Plan and master industrial processes

Building an agri-food facility is extremely expensive. "You shouldn't start developing infrastructure unless you know for sure that you're heading in the right direction," Gagnon warns. "Once you're off the ground, you have to be very efficient and plan how you're going to automate. This industry is very competitive."

4. Have a solid game plan 

Entrepreneurs have to be able to manage their income and cash flow and reach profitability through their project. Having a financing structure that takes all the company's needs into account is key, as well as having some leeway in case of unforeseen events. A financial partner like Desjardins can help your agri-food business grow and find solutions that are right for you.