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How to Find Your Niche within a Niche

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    NEWSLETTERS

    Niches are a bit like Russian nesting dolls in that some are certainly more exotic than others, and some are exploited merely to fit in among bigger ones just because there's an opening. Marshall Rader, president of Gluten Free Bar in Chicago, knows this. He got into the gluten-free bar game not out of some insatiable desire to chase trends but rather because he was diagnosed with celiac disease. So, while his business was, in part, born out of necessity, he also has been in the gluten-free game for about two years -- long enough to have existed when nobody knew what gluten-free was. His bars have been stoked in about 300 stores, and many of those are in the Chicagoland area, from the Standard Market and East Bank Club to Meijer and Protein Bar. With no signs of slowing down on the niche, I gave Rader a call to find out more about operating within a niche within a niche.

    How did you arrive at the bar sector, if you will, of the gluten-free niche?

    Marshall Rader: It was really born out of my desire for a better product. Long story short, I had a corporate job where I was traveling a ton, probably 80 percent plus my time. That could be in the US or abroad, and it was probably about three years ago now and there were, at that point, not many good options. When I was doing all that traveling I was also diagnosed with celiac disease. So, my options for eating on the road were cut significantly down and so I was packing a bunch of gluten-free bars from other manufacturers. I would eat them wherever I might be. I could be in China for two weeks and I'd be eating three or four a day just because I had no other option. After doing that for a little while, I couldn't find anything that I liked, I couldn't find anything that was simple, made with simple wholesome ingredients, and so that's kinda how it started. I said, "Well, I think I can try to do this myself," and that's how we got started into the bar business. I knew I wanted a bar. I looked into gluten-free, and of course I had done some research after I had been diagnosed and learned about it and it just seemed like the US was so far behind every established region of the world.

    Europe, Australia, New Zealand, Canada. We're the farthest one behind in terms of recognizing, diagnosing celiac disease and from things I read and my own gut feeling, I thought that the gluten-free sector was going to be a high-growth sector for the next five or 10 years and there would be room in there for some innovative new companies to jump in.

    Do you find it's best to dive into a niche if it's something that affects you directly or if it's something you're passionate about?

    Marshall Rader: Yeah, for sure. I think if you can bring some personal perspective and experience, I think it makes your one, one big intangible but it makes your sales message that much stronger when you're talking to people if it's something you personally experience. I think it helps and that resonates with people when you're talking to them about carrying your product and the benefits of it and why people like it. That's part of the reason we chose the name that we did. We wanted it to be super-simple, we wanted people to pick up the bar and know exactly what they were looking at it without it being some action-oriented name like a lot of products are, like Zing Bar or something.

    We know this is a gluten-free product right away, and it's that niche within a niche: You're really trying to make those people that are gluten-free for choice or for medical reasons can understand and sort of become advocates for you because it's clear that you're trying to be established to serve that market.

    How do you stand apart in a niche? Just because you're the first person in a niche doesn't mean you're always going to be the first person.

    Marshall Rader: There's always great competition, especially in the last two years tons of products have come out and some of them are very good and some are not. That's a marketing message that we're working on all the time to try to refine and the challenge for us is -- I think being gluten-free and being titled The Gluten-Free Bar and being simple, it's how we try to brand ourselves but also the challenge that we have in doing that is also conveying that we're all about great taste as well. That can be a delicate balance to strike.

    Is there research people can do to tell whether a niche is going to a lasting one or if it's just a temporary one?

    Marshall Rader: Yeah, that's something I thought about when I started this. So, there's always these dietary crazes, especially with food in America. I think people have to think about what's driving that. What's really the main cause for what's happening. So if you look at something that's happened in the past, like acai berries, that was really popular a few years ago. They're still certainly around, but it's not nearly as popular as it was, and today it's coconut water. You look at what the driver to the popularity of coconut water is, and it's that people think they might be a great hydration drink and celebrities drink it. So, what's really driving that?

    And you look at gluten-free and you say, "Okay, well, what's driving this? It's driven by medical diagnosis and people who need to change their life so that they're happier and healthier." You look at Atkin's, and it was a very, very strong trend over a long period of time but it's not rooted in a requirement. The driving force behind that was a diet. I would look for something that's real that's causing that trend to happen. I think in gluten-free I think it's the reality of people getting diagnosed and learning to live gluten-free or if they do it for personal reasons so they feel better. That's a lot more tangible. So I guess in a nutshell, I would say look for tangible things that will make that niche meaningful and something that's going to be around and grow for a while. I think gluten-free's going to grow for a long time, but not at the pace that it is today. Three years ago no one knew about gluten-free and now everyone does. So, that case can't continue, but I think it's going to continue to grow at a slower pace.

    Isn't it advantageous that more people know about it? Or is it more of a double-edged blade?

    Marshall Rader: I think it's 98 percent a good thing. I think there's some gluten-free backlash out there. For people who are like me and just want to go to a restaurant and want to ask the question without feeling like you're kind of that guy who's like, "Hey, I'm gluten-free, can you please make sure that you don't do this to my meal?" Three years ago that was really hard because people didn't know what it meant. Now, nine times out of 10 when I say that, they go, "Oh, okay, no worries, let me check with the chef."

    If you were doing this again, what would you do differently?

    Marshall Rader: I was working a full-time job and I probably woulda quit that sooner because the opportunity is commensurate with how much time you put into it. It's a big leap for people to quit their job and jump into something full-time that's not making any money. But I would say if you're committed to it, the sooner the better. I also expected things to cost twice as much as I budgeted and that was a good rule of thumb. But be ready for a ton of hurdles that you're not going to not sure how to solve. If you're going into a niche that you're really interested in and you're passionate about, that's what's going to give you the energy to conquer those issues and solve them, because without that, I think that's where people get into trouble. They just don't have the heart to really try to drive through some of the problems and then you end up paying more for things and you have other challenges that are a negative on your business.