Market Pivot: Dan Kurzrock

Pivoting from a CPG brand to an ingredient brand

Pivoting from the snack aisle to the ingredients section

I first learned about Dan Kurzrock in a circa 2017 Fast Company article detailing how his then-company, Regrained, was turning beer waste – spent grains from the brewing process – into high-quality, high-nutrient snack bars.  As a beer guy, I knew I had to meet Dan and as luck would have it, my friend Lara Pearson of Brand Geek happened to be doing IP work for Dan and introduced us.

Since then, Dan’ company has become an industry leader in food innovation.  It’s grown significantly, much of that occasioned by a strategic pivot and rebrand from those CPG snack products to become an ingredient brand.  The new ingredient brain, Regrained Supergrain+®, is used by companies making products ranging from English muffins to semolina artisanal pasta to naan.

With the pivot to an ingredient brand, the parent company rebranded as Upcycled Foods, Inc. It’s one of the first ingredients in the world to receive Upcycled Food Certification, and the company is a certified B Corporation as well as a member of 1% for the Planet. It participates in One Step Closer, a packaging and climate collaborative with the goal of minimizing environmental impact, and it also supports food justice by supporting Food Shift as its 1% for the Planet partner.

Full disclosure: I’m a modest, as in very modest, investor in Upcycled Foods.

Describe the “aha” moment when you decided to pivot from being a CPG snack brand to being an ingredient brand.

Truthfully, this “aha” moment happened before business even got off the ground. Even as a college homebrewer turned bread and snack entrepreneur, I saw major potential for the artist-formerly-known-as “spent” grain as an ingredient. Given that this was 2011ish, there wasn’t yet any conversation about food waste as a macro problem, let alone upcycling as a leading solution. We knew we had to lay the foundation to create a market for our innovative idea and thought the best way to do that would be through CPG products, which also could generate some cash flow. We developed a hybrid go-to-market strategy from this thinking.

We evolved our model many times over the years. (Sidenote: Where is the line between a pivot and an evolution?)  We ended up finding some success as a CPG brand, but it ultimately began to take focus away from the ingredient business. We also had some costly setbacks, which challenged our CPG-for-cashflow thesis. Our compostable packaging dilemma that we shared transparently with the world for our snack bar line is a great example of this. Ultimately, after the pandemic radically disrupted our snack puff launch, we decided to accelerate our long-term strategy. We dismantled CPG and pivoted our efforts fully to the B2B ingredient business.

What were obstacles or challenges presented by your pivot – and how did you overcome them?

The most immediate challenge was that dismantling CPG meant cutting off our main source of revenue. This affected several areas of the business, but a notable one was our positioning in the investment community, which was, at the time, very focused on top-line revenue. However, we knew we had a strong pipeline of ingredient opportunities that would help provide proof points to our model. We also felt strongly that we would be best positioned to advance our mission through the B2B business.  We just needed some time.

One interesting strategy we developed was to monetize our expertise as a services offering through our Upcycled Foods Lab. Our innovation services have opened a new revenue stream for the business and enabled us to support the food and beverage industries transition to circularity in a different capacity—from inside the operations of other companies.

Do you have any advice for others when contemplating a major pivot?

Don’t contemplate a pivot in a vacuum. As leaders, we must get out of our own heads. If you are doing your job as a founder, you have surrounded yourself with a team of advisors who have valuable perspective. Ask for help. You get to decide how to parse the advice and implement. 

Your pivot engendered a rebranding of the ingredient and the new parent brand – how critical has branding been to your success?

We see branding as a critical component of our strategy. Branded ingredients have several benefits including storytelling to the end consumer and value-added positioning in the marketplace. We are not in the business of commodity ingredients, but rather in the business of ingredient solutions. Our branded positioning enables us to communicate that.

When we started the company with a focus on brewers’ grain, ReGrained worked as both a company and product name. As we expanded our scope to take what we learned from brewers’ grain and apply it to potentially countless other overlooked and undervalued supply chains, we needed a company name that reflected that. ReGrained then became a flagship product brand underneath the Upcycled Foods, Inc. platform. With UP, Inc. we can then launch additional product brands as we continue to expand our commercial ingredient portfolio.

What’s your biggest stressor in business – and how do you deal with it?

If I’m being candid, most good ideas fail because they run out of money. As a founder/CEO, securing funding is probably the biggest (and seemingly never-ending) business stressor.

You’ve been at it for nearly 13 years.  What keeps you going?

To be fair, those early years were a side hustle! I dove in full time in 2017, which is still a long time. One thing I’ll share is that the mission and purpose of our endeavor is emotional currency that is invaluable.

I also think every entrepreneur should make time for enriching/creative hobbies. I can’t tell you how many times a long bike ride has not only helped my physical and emotional health, but also been the catalyst for an important idea. I am constantly finding metaphor in my gardening, too. More recently, I became a father about two years ago. I do not think I can describe the positive impact this has had on me without cliché, so I will leave that there.

What’s the next big thing for Upcycled Foods?

We have some ingredient solution extensions coming for the ReGrained SuperGrain^+® line, with a focus on new solutions for enhancing natural nutritional fortification through upcycling. We also have a novel ingredient solution that uses upcycling as a tool to create an alternative for an at-risk commodity. Sorry to gesture vaguely at this instead of going into specifics, but you’ll have to stay tuned!

What’s your favorite beer?

I have not met many beers that lack merits! That said, we live near a great local brewery called Ghost Town that I really enjoy. They are starting to pop up more and more on tap lists at restaurants and bars too, which is always great to see. Their menu is expansive, ranging from a very quaffable $3 craft lager pint to fresh hop IPAs and interesting ales with botanical and fruit ingredients.

What are you reading right now?

Love this question. I am a voracious reader of fiction and generally maintain a diverse literary diet. You are catching me during a funny moment for that. I am reading two very different books right now. One is Edith Grossman’s translation of Don Quixote. The other is The Martian, a commercial sci-fi thriller by Andy Weir. Technically I am also “reading” a third audiobook, which is Stephen Fry’s latest Greek-retelling, Troy.

When you were a child, what did you want to be when you grew up?

An astronaut.

Who inspires you?

It is corny, but right now, my son Landon. He is at an age where he is so interested in everything and so present.

Rock, paper, or scissors?

Rock. It’s in my name, after all. 

You can connect with Dan on LinkedIn.