Her Health Snacks Are a Global Hit - A Young Russian Entrepreneur's Success Story

With 13% Russian market share and sales in 14 countries, current year sales of her health bars are heading towards $17 million.  

Biofoodlabs was profitable within 8 months of its founding.

Wed, Jul 26, 2017
|
3,117Comments
MORE: Politics
Elena Shifrina

Elena Shifrina knew it was audacious, but she wasn't going to miss this chance.

The gutsy blonde strode through Russian Prime Minister Dmitry Medvedev’s security contingent to approach him at the Skolkovo Innovation Park start-up incubator he had founded.

And she got the promotional coup she wanted: a photo of her standing next to Medvedev. In his hand was one of the Bite healthy snack bars produced by the company she founded, BioFoodLab.

Shifrina’s promotional skills are one of the reasons Bite’s share of Russia’s healthy snack market has tripled to more than 13 percent in three years and that it is now sold in 14 countries.

Those skills are partly the result of the confidence she gained from being a model in Paris and London before returning to Russia to work in the oil business and banking. They have helped her become the face of the country’s healthy-food market — partly by gracing the pages of glossy magazines like Russian Vogue — as well as the face of its new generation of entrepreneurs.

But the main reason for Bite’s success is not Shifrina’s promotional skills, she will tell you. It is because the bars are a world-class product. They consist of fruit, berries, nuts and spices, with no sugar and no preservatives or additives.

Helping to assure Bite’s success was the timing of the product launch in 2012. Shifrina caught a wave of Russian interest in healthy foods that is continuing to crest.

She came up with the idea for Bite in 2011, when she was on a three-month student exchange program at the famed Massachusetts Institute of Technology. Those Boston-area studies were part of her MBA program at the Skolkovo Graduate Business School.

She and her MIT classmates, who were so busy they had little time to prepare food, often grabbed snack bars in a student dining area. A healthy-lifestyle proponent, she liked the taste of the bars, the idea that they were nutritious, and the fact they had no preservatives.

When she returned to Skolkovo, an entrepreneurship professor ordered her class to come up with a product or service they could build a start-up around. With her MIT experience fresh in her mind, Shifrina decided on healthy snack bars.

“The Russian products that were available contained sugar syrups and preservatives, which completely contradicted the idea of a healthy diet,” she said. “I thought, ‘Why not turn my own commitment to a healthy lifestyle into a business?’”

A report that Russia’s healthy food industry was growing at 7 percent a year only strengthened her resolve to manufacture healthy snack bars.

When she researched the snack food preferences of people from different countries, she learned that Russians have a sweet tooth. “That meant we needed to come up with a bar that was sweet but that didn’t contain sugar,” she said.

Excited about the prospect of making healthy snack bars in a country where only high-priced foreign versions were available, Shifrina started BioFoodLab in February 2012. Her initial capital was 7 million rubles — or about $120,000 — of her own money and some outside investment.

The early challenges were daunting.

Determined that everything in Bite would be natural, with no preservatives or additives, Shifrina discovered she could not get the ingredients she needed in Russia. That meant importing the raw materials.

She also learned that the equipment she needed to manufacture the bars was not available in Russia.

She was determined that Bite would have the same six-month shelf life as products in Russia that contained preservatives. This required special equipment to eliminate bacteria that could spoil the bars before the six months were up.

That equipment, too, had to come from overseas.

BioFoodLab also needed special packaging to achieve the six-month shelf life.

“We use a three-layer package,” Shifrina said. “It prevents light from penetrating, prolonging the shelf life.”

Her company sold Bite through online food stores for six months, then switched to brick-and-mortar sales, including health food stores, coffee-shop chains, department stores and other retailers.

In just eight months the company was making a profit.

Some of its most lustrous distributors include Sainsbury’s, Britain’s second-largest supermarket chain; Rakuten, Japan’s second-largest online retailer; and the Russian supermarkets Pyaterochka and Perekrostok and specialty-foods chain Azbuka Vkusa.

As Bite’s reputation grew, BioFoodLab opened its own website to market the bars. It also promotes the bars on social media.

Despite its major online presence, most of its sales continues to come from brick-and-mortar locations, however — with more than 8,000 points of sale in Russia alone.

Knowing that different people like different flavors, the company started with five flavors, but is now up to eleven.

Its initial approach to creating flavors, Shifrina said, was to “buy dried fruit, mix it in various combinations, and see how it tasted.”

Because of their lead role in developing the flavors, she calls her food technologists the most important people on the BioFoodLab team.

Their creations have included figs with cinnamon, banana with peanuts, apple with carrots, cranberries with almonds, and lime with hazelnuts.

When BioFoodLab started, Shifrina considered the bars an adult food, but it turned out that children loved them, too. That prompted the company to come up a separate line for kids, known as Bitey.

Shifrina got a promotional pop as soon as Bite sales started when in October of 2013 Nike’s Russian running clubs offered her a partnership deal: BioFoodLab would provide bars to those running in the clubs’ competitions in exchange for the clubs promoting the brand. Shifrina jumped at the chance.

Another early promotional pop came when the Russian edition of Forbes magazine named BioFoodLab its Startup of the Year in 2013.

The Nike and Forbes ties underscored Shifrina’s belief that promotion is crucial to a company’s success. She constantly looks for opportunities to pitch her product — and seizes every chance that comes along.

She was thrilled when the organizers of the 2017 London Marathon named Bite the event’s official snack, putting it in every contestant’s goodie bag.

A recent promotional coup was a tie-in with Disney and Lucas Films. In 2015, BioFoodLab produced a limited-edition Star Wars package for the bars for the premiere of the film, “Star Wars: The Force Awakens.” Thousands of customers purchased the bars and shared their experiences on social media. As a result of the campaign’s enormous success, it released special bars dedicated to the film, “Rouge One: A Star Wars Story," in 2016.

Shifrina decided from the start that BioFoodLab would display the social consciousness that the world’s most respected companies do.

Unfortunately, its first opportunity at community involvement resulted from one of Russia’s worst tragedies ever — a flood in the Krymsk area in 2012 that claimed 150 lives. BioFoodLab employees rushed to the scene to distribute Bite bars to survivors and responders and do whatever else they could.

Although the company has made immense progress since its founding five years ago, Shifrina believes more breakthroughs are on the horizon.

It recently reached an agreement to sell Bite bars in Japan, a market that is very difficult to penetrate, especially for a fledgling company.

And it expects it sales by this end of this year to reach 1 billion rubles, or about $17 million.

Shifrina remembers when she was growing up how insistent her mother was that the family should eat healthy.

Her mom never envisioned that this lesson she taught her children would turn into a business for one of them.

The best part of the story is that that business is making a difference in people’s lives.

advertisement

Click here for our commenting guidelines