Nicklaus: Pandemic innovation revolutionized Ballwin waffle company | business

Supermarkets were dropping the Ballwin company’s high-protein, gluten-free frozen waffles, causing sales to fall by half. Other stores stopped all promotional activity that might help consumers find a new product.

Meanwhile, suppliers were canceling ingredient orders and production employees were having to stay home with their children.

“The summer of 2020 almost killed us,” co-founder Kyle Rood recalled recently. He and partner Clint Matthews briefly considered shutting down the company, which they launched in 2015 after briefly running a medical-device startup.

They believed in the product, though, and a few loyal chains such as Dierbergs and Straub’s had stuck with them. They also had just reformulated the waffles, making them moister, and had engaged Switch, a St. Louis marketing agency, to redesign their packaging.

Matthews decided to make an additional investment in the company to get through the lean times. “It was either I do that or we just go under,” he said. “We had a great product and great packaging and I would have regretted it for the rest of my life if we didn’t see this through.”

They also made a strategic decision: They would no longer just sell waffles. Instead, they’d concentrate on “waffle sliders”: sandwiches with sausage and egg, or a piece of chicken, between two of their healthy waffles. The sliders would carry higher profit margins and face less direct competition.

Less than two years after the near-death experience, the pandemic has changed from challenge to opportunity. Walmart, the nation’s biggest grocer, asked Start Right if it could fill shelf space left vacant by other brands, which were simplifying their product lines to cope with supply-chain problems.

Walmart wanted to stock waffle sliders in more than 3,000 stores, but that would have taxed the six-employee company to the breaking point. Rood and Matthews agreed to supply a single product, the sausage and egg slider, to 1,200 Walmarts, and then set about trying to meet the sudden increase in demand.

The company is raising capital, has ordered a larger waffle-making machine and is taking over a warehouse space next door to double its production footprint. It also has leased a refrigerated truck, which Matthews personally drives to a Walmart distribution center in Carthage, Missouri.

That makes sure transportation bottlenecks don’t disrupt a new customer relationship, but other supply-chain issues keep popping up.

Start Right had to find alternate suppliers for sausage and chicken — and apply new stickers to its packages because the nutritional content changed slightly. Avian influenza hit an egg supplier last week, setting off a scramble to ensure supply of another key ingredient.

Rood said sales are meeting Walmart’s expectations. If that success continues, he expects the chain to want waffle sliders in all of its U.S. stores later this year. It may also want a broader product line, including a new plant-based slider Start Right developed with Beyond Meat.

That, of course, would require far more production capacity, so Matthews and Rood are working on long-term expansion plans at the same time they’re fixing short-term problems. “It’s nonstop chaos around here,” Rood said.

Gene Gerke, a veteran Columbia, Missouri, business consultant, is Start Right’s third co-founder. He was initially impressed with the healthy product, but now believes the company’s true secret ingredient is perseverance.

“A lot of people panicked during the pandemic, but Clint and Kyle took time to rework the recipe and rework branding,” Gerke said. “I don’t know if I could have lasted as long as they have.”