UK government’s recently proposed rule of restricting unhealthy food and beverage promotions that will officially take effect in October is spurring the growth of a new set of homegrown breakfast cereal brands made with less sugar and higher nutritional value.
Claiming to be the first “junk-free, hassle-free” cereal breakfast product that appeals to the mainstream consumer, Crispy Fantasy created by entrepreneurs Raphaël Nahoum and Andrea Rodrik has officially launched via DTC and Amazon
The duo told me earlier during an exclusive interview that their honey and cinnamon varietals, which consist of similar nutritional profile, will also become available on Amazon and other European countries, including Germany, later this year.
“There’s an immense market opportunity in the UK,” due to the rising consumption of breakfast cereal and oatmeal, they said, mirroring a more mature trend in the U.S. currently led by Magic Spoon, Kreatures of Habit, Yishi, and other emerging players.
Statista showed the UK breakfast cereals market is estimated to worth $2.9 billion, with both market revenues and consumption volumes seeing an uptick compared to prior years. However, the local government’s crackdown on less healthy food, particularly those that are high in fat, salt and sugar, has put mounting pressure on category heavyweights.
These new regulations, which include banning TV advertising of less healthy products before 9pm, and restricting their display in grocery, are a direct measure against childhood obesity and other harmful diseases caused by high sugar intake, the Department of Health and Social Care previously illuminated, although they have drawn criticism from companies including Kellogg’s
The Rice Krispies maker believes the new measure is not implemented lawfully, arguing additional nutritional elements from milk or yogurt also need be considered since cereals are rarely eaten alone.
Inspired By U.S. Brands; Tailored To Europe’s Mass Market
The concept of Crispy Fantasy has taken inspiration from a slew of popular, digitally-native American food brands, Rodrik said. After realizing a gap for health-focused cereals in Europe, Rodrik, alongside his business partner Nahoum, believes launching their product first online, leveraging social platforms such as TikTok, can help them target the mainstream market more effectively.
“Interest in the high-fat, keto diet has skyrocketed in the U.S.,” the pair said, “but we view this trend as a fad that won’t last in the long term, and will certainly not generate the same market opportunity across the Atlantic… Crispy Fantasy has been adapted and tailored to the European market — we’re neither a keto cereal brand nor a specialty product; we’re a mass-market brand.”
Packed with a short list of natural ingredients, Crispy Fantasy has attracted a group of U.S.-based investors to support the launch of its fully vegan and gluten-free cereals, including Halo Top’s co-founder and CEO, Doug Bouton; Peter Rahal, who created and sold RXBar to Kellogg’s for $600 million; as well as domestic investment fund, Pareto Holdings, whose advisors include Marcelo Claure, former CEO of SoftBank; and Mayor of Miami, Francis Suarez.
Bouton, who described Crispy Fantasy as the “Halo Top of cereal,” noted how the cereal startup will be leveraging their distribution platform — currently sold in more than 30 countries — to eventually build a global presence. Rahal also said in a statement: “With my experience, I’m going to help these amazing founders with all the problems that emerge with the company building process.”
Strategic Market Expansion
Rodrik and Nahoum didn’t disclose the amount raised, but said the significant funding will help them ramp up new product development, roll out across retail, and hire new employees, in addition to enhancing online shopping experience. However, it could be a prolonged task for Crispy Fantasy to land in the U.S. due to market saturation and intensified competition.
“It wouldn’t be strategic to enter [the U.S.] as we have to pour millions just to get a small market share,” they explained. “The European market is just as big, and we would like to take advantage of our agility and benefit from the first-mover advantage across different European countries. The same logic applies for our long-term vision – we have plans to expand farther east to India, the Middle East and Australia [where] we already have points of contact via Halo Top.”
The bottom line for Crispy Fantasy is to focus on taste first and excel what a typical healthy cereal should be other than zero sugar or grain, aspiring to be the European challenger brand to a breakfast cereal duopoly — Kellogg’s and Nestlé, owner of Cheerios outside of North America and Shreddies, according to Rodrik and Nahoum.
“Cereal is one of the very few products that are widely consumed, and there is a real cult behind it,” they said. “We aren’t afraid of penetrating such a competitive market and managing to make the cut.”