Part 2 – The story about how Kodiak Cakes got started, and how it became the best-selling pancake brand in its industry.
Kodiak Cakes started in 1995 when the Clark brothers made their mother’s dream of selling her family flapjack recipe as a mix come true. If this is news to you, then check out the early history of Kodiak Cakes here.
Picking up from Part 1 of the story behind Kodiak Cakes…
Joel knew he needed help when he committed to Kodiak Cakes again in 2008. He needed someone who could bring new life and energy to the company to help him reach his goals. At the young age of 24, Cameron Smith was the perfect fit for the job.
Cameron had just graduated from the University of Utah when he joined Kodiak Cakes as Joel’s partner and COO in 2009. He quickly became a leader focused on execution and vision, and his optimistic attitude has kept Kodiak Cakes moving forward, even in the face of adversity.
“Cameron was my secret weapon,” said Joel Clark, “Without him, Kodiak Cakes would not be the success it is today.”
Joel and Cameron hit the ground running. Bootstrapped to Joel’s home equity line, the pair continued to take massive risks. It was scary, but they knew without risk, their company could not grow into the pancake powerhouse they wanted it to become.
The pancake category was not one people talked or cared about. As Cameron puts it, there was “no noise in pancakes.” The challenge was, retailers felt Kodiak Cakes were a commodity that people didn’t care about. But risk and persistence helped Joel and Cameron create noise in a sleeping category, landing Kodiak Cakes in stores like Costco and Target, and on ABC’s Shark Tank.
Costco & Target
Selling to Costco and Target were huge risks for a small company like Kodiak Cakes. Costco, for one, could discontinue a product overnight and all efforts, investments, and inventory specific to Costco would be lost. But Joel and Cameron’s small company, of just three employees, decided to take the chance. They started testing their products through Costco roadshows, working an average of 35-40 hours over three days for each roadshow, and sampling every Kodiak Cakes product at the time including: pancakes, brownies, cookies, and syrup to determine which items sold the best.
Their success during Costco roadshows was better than they anticipated, and Costco was quick to make room on their shelves for Kodiak Cakes real fruit syrup and Original Whole Wheat Oat & Honey Flapjack and Waffle Mix. These products sold incredibly well at Costco, and Joel and Cameron struggled like crazy just to keep up.
In November 2011, Cameron landed an appointment with Target. Within a few months, Target started testing Kodiak Cakes flapjack and waffle mixes in 40 stores across the nation before pushing them into all stores after about a year. However, a win like this does not come without some sort of stumbling block, as Joel and Cameron well knew.
At the time, Kodiak Cakes had to buy all ingredients for their co-packer before they could produce the product, which also meant Kodiak Cakes had to put out the money for those ingredients. So, when Target’s first order for all their stores cost more than Kodiak Cakes could afford, Joel had to take a loan out to cover the cost of production and shipping.
But even with Kodiak Cakes in all Target stores, sales were not where Joel and Cameron hoped they would be. The pair were challenged to think innovatively about how to increase brand exposure and drive more sales, just as they’d been challenged for the entirety of their careers.
Joel and Cameron explored many marketing initiatives, the largest being their appearance on ABC’s Shark Tank in 2014. After applying to Shark Tank in December of 2012, it only took a couple months to catch the casting director’s attention. By June, Joel and Cameron flew out to California to face the Sharks.
Joel and Cameron were given a 30-45 minute window to pitch Kodiak Cakes Original Whole Wheat Oat & Honey Flapjack and Waffle Mix. The sharks presented them with a lowball offer, and Joel and Cameron declined any investments. But, if anything, they just hoped that Kodiak Cakes would be one of the 80% of companies filmed on Shark Tank to actually make it on air.
When Joel and Cameron’s pitch aired in April 2014, almost a year later, their efforts in getting to Shark Tanknot only paid off, but also exceeded their expectations. After Shark Tank, Kodiak Cakes sold out at Target. By June, Target brought in Power Cakes, Kodiak Cakes’ new high protein mix, giving Kodiak Cakes three items on Target shelves. Even more impressive, Kodiak Cakes Buttermilk Power Cakes became the #1 selling pancake mix in the nation by September of that year.
From a little red wagon to the best-selling pancake mix in the nation
In 2016, Joel and Cameron closed a significant equity round with Sunrise Strategic Partners to fuel rapid revenue growth at Kodiak Cakes—growth from $3.6 million in 2014 to a projected $100 million in 2018. Kodiak Cakes was the first to launch a mainstream protein pancake mix, and was also the first to market with microwaveable flapjack and muffin mixes in a cup. Joel and Cameron continue to foster innovation by bringing noise to sleepy categories in grocery stores with new, healthy products, such as baking mixes and toaster waffles. So, keep an eye out for more exciting products to come!
“It’s been an amazing journey, and so much fun to watch what Kodiak Cakes has become,” said Joel. “And to think it all started with my mom, Penny, and a little red wagon!”