Bulgaria’s Smart Organic takes a bigger bite of the protein bar market

Bulgaria’s Smart Organic takes a bigger bite of the protein bar market
Smart Organic has opened two more stores in Sofia, where it is due to open a fourth in August, as well as running a franchise across the country. / Photo: Smart Organic
By Clare Nuttall in Bucharest July 19, 2017

Sofia-based health food company Smart Organic is in the process of setting up a new factory that will allow it to take advantage of the fast growing international market for protein bars.

Smart Organic’s flagship product, the Roobar protein bars, are already exported to 50 countries worldwide — not bad for a company that started out eight years ago as a small organic food shop in the Bulgarian capital.

“The inspiration behind the business was our strong desire to offer clean and nutritious food to our clients,” the company’s general manager Yani Dragov tells bne IntelliNews. The company didn’t achieve immediate success, but “little by little we found the right niche and launched our most successful product, Roobar”, according to Dragov.

That was in 2012, when Smart Organic first placed the additive free protein bar on the market. Each of its range of Roobars has no more than four of five ingredients, one of which is a superfood; Dragov lists maca, chia and hemp as examples. Since then, Smart Organic also started selling various types of superfoods under the Dragon Superfoods brand, which now includes more than 100 products.

Demand for its products has been steadily increasing. In the last few years, Smart Organic has opened two more stores in Sofia, where it is due to open a fourth in August, as well as running a franchise across the country. Dragov describes his company as “not only a business, we are a cause”, citing its efforts to engage its clients in leading a healthy lifestyle, for example by launching sports, fitness and wellbeing campaigns across Bulgaria.

However, like many small companies, the growth path can be tricky. In 2015 Smart Organic initiated plans for an IPO on the local stock exchange, which would have made it one of the first companies to float after the financial crisis. However, the company failed to obtain regulatory approval and the plans were scrapped.

Instead, Dragov says the company “found better ways to fund ourselves”. These included a €2mn loan from the European Bank for Reconstruction and Development (EBRD), extended in December 2016 to fund part of Smart Organic’s €3.3mn expansion programme, which includes buying and renovating its new factory. Dragov declined to elaborate on the other funding sources the company is considering.

“Smart Organic has seen exceptional growth this year and is keen to expand further,” the EBRD’s director for Bulgaria Larisa Manastirli said in a December 22 statement. “We hope that our investment will help Bulgarian energy bars conquer the world.”

Meanwhile, Manastirli’s colleague Miljan Zdrale, EBRD’s regional head of agribusiness in Southeast Europe, listed positive factors such as the company’s “healthy recipes and in-house research and development capacity, a unique marketing strategy and a smooth distribution network that also serves as a supply chain”.

Smart Organic has already brought the production factory, and is now in the renovation and construction process, with a view to moving in either at the end of this year or the beginning of 2018, according to Dragov. This will allow the company to consolidate production, packaging and storage at a single location, helping it to meet growing international demand, the EBRD says.

Indeed, the global protein bar market is growing rapidly, according to analysis by market research and consulting firm Mordor Intelligence. This is attributed to “the increasing demand among consumers for portable convenience foods, which is enhancing the protein bar market. These consumers are not only sports athletes, but also those who want to have a wholesome meal without the trouble of cooking”.

Globally, the largest market is in the US, which accounts for more than 40% of worldwide market value, while the UK is the largest market in Europe, and demand is expanding rapidly in East Asia. Smart Organic has carved out a growing customer base in this market, despite competition from global players such as The Kellogg Company, Danone’s WhiteWave Foods Company and General Mills’ Small Planet Foods. 

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