The Toasted Oat: Gluten-free and Oh So Delicious

Toasted Oat gluten-free granola

There is a lot to say about The Toasted Oat Bakehouse, a wholesale manufacturer of certified gluten-free granola now being sold in 300 retail locations and online.

For starters, there’s the story of how founder and CEO Erika Boll bootstrapped her business, starting with her Grandma’s granola recipe and rented time in a gluten-free community kitchen.

There’s the way Boll applied the marketing and merchandising know-how she developed during her previous career at L Brands to grow the business organically. There’s the recent venture capital round the company received in November.

And then there’s the granola. This granola is unique. It’s soft and chewy like cookies. It’s all natural and gluten-free. It’s quite possibly the best granola (of any type) you will ever taste.

“For as long as I can remember, my grandma made this granola,” Boll said. “She made a lot, and the batches were big. Our family has always loved it. Then when I was 33, I was diagnosed with celiac disease (autoimmune disease related to gluten intolerance). It was hard to find products to eat that tasted good. I felt like other people with celiac deserved to have food that tasted this good.”

Toasted Oat Popout

Getting the Product Right Is Just the First Step

Before founding The Toasted Oat Bakehouse, Boll was in visual merchandising at L Brands where she developed and procured marketing and merchandising elements for stores. Her initiatives produced double-digit sales lifts, operational improvements, and significant cost savings for multiple L Brands retailers.

Outstanding marketing wasn’t Boll’s only contribution. She took batches of her Grandma’s granola to the office in huge Tupperware containers; Coworkers gobbled it up. (Full disclosure: The same thing happens at Rev1.)

“After I left L Brands,” Boll said, “I decided to make a batch of the granola and took it to Whole Foods. I had no logo and no website. I was just a Whole Foods shopper who walked in with four ziplock bags of granola from home. I told my story, and the grocery buyer said it was the best granola he had ever tried, never mind that it was gluten-free, and how fast could Whole Foods get it on the shelf? That’s when I realized I might be on to something.”

Boll researched ingredients, packaging, and places where she could make granola. The Toasted Oat began producing in May 2013, launched in a couple of small stores, and then debuted in Whole Foods that August.

Bootstrapping and the Challenges of Scaling Up The Toasted Oat

Once the product hit the shelves at Whole Foods, it sold. Boll needed more cooking space to keep up with demand. She found a site with a dock door for deliveries and outbound shipments, built out a kitchen, and hired staff.

A partnership with an Ohio distributor took The Toasted Oat into Heinen’s, a Cleveland-based 18-store chain.

“It just started growing organically from there,” Boll said. “We are a good ingredient to have in the pantry. You don’t need a bowl or a spoon. You can eat this as a snack or a meal. There’s no other granola that you can press into the bottom of a cheesecake pan as a crust for a dessert without doing anything else.”

Matching Business Plan Milestones to Capital Needs

The Toasted Oat received the 2014 Ohio Chamber of Commerce Excellence in Entrepreneurship Award, which came with a $25,000 grant. (Boll was also the first woman to win this award.)

“The money helped us expand our facility and get regional distribution going,” she said, “but the dollars got bigger, and we realized we couldn’t bootstrap anymore.”

Boll, who had never raised capital, began networking. It wasn’t easy, and it wasn’t quick. The company completed a small raise in 2016 with local investors and AccelFoods, a New York VC firm that invests in innovative food and beverage startups. The team at AccelFoods loved the different taste and texture of the granola and saw the potential of The Toasted Oat.

With these funds, The Toasted Oat underwent a full rebrand and repackaged from a traditional oat tin to a standard granola pouch. This not only allowed visibility to the product inside the package, but allowed for the future expansion of production capability.

AccelFoods also led a second successful round of financing in November 2017, with Rev1 Ventures and members of Ohio TechAngels Fund, as well as other angel investors participating. Since then The Toasted Oat has completed the rebrand and contracted its manufacturing to a production facility with the expertise and capacity to efficiently and economically handle forecasted growth.

“When we are juggling so many balls and fighting so many daily fires, I constantly remind myself to forward think,” Boll said. “We can find everything we need from a supporter or an advisor. From the beginning, I have felt that this is going to be successful. Of that, I had no doubt; even on the doubtful days.”

One of the biggest surprises of the whole experience has been people’s generosity.

“It came from the investor community, with Rev1 providing resources and networking,” Boll said. “Our manufacturing is now being done in a facility owned by someone who believed in me and gave me free advice. At every fork, someone has been generous. We would not have gotten this far except that lots of people helped us along the way.”

At Rev1, we call that the Backyard Effect. If you would like to learn more about how Rev1 helps entrepreneurs like Erika Boll build great companies, please contact us.