Krishna Kaliannan: Founder of Catalina Crunch

Episode 915

Some of the best businesses start when a founder decides to solve a problem they’re living with themselves.
On The Kara Goldin Show, I sit down with Krishna Kaliannan, Founder of Catalina Crunch, the better-for-you cereal and snack company he created after his own experience living with Type 1 diabetes made him realize just how few great-tasting, lower-sugar options existed.
We talk about how Krishna went from a career in finance to experimenting with low-carb cereal in his own kitchen, eventually running production out of a small bakery in Indianapolis — working during the day, selling at night, and even sleeping on a cot in the front office. That early experiment has grown into a brand with more than $200 million in annual retail sales and a presence in more than 28,000 retail doors nationwide.
Krishna also shares what it took to make the leap from direct-to-consumer into major retailers, how Catalina Crunch competes against some of the biggest legacy food companies, and why high protein, high fiber and less sugar have been central to the brand from the beginning. We also talk about the realities of scaling a CPG company, what nearly broke along the way, balancing growth with building a healthy business, and what Krishna would do differently if he were starting all over again.
This is a great conversation about entrepreneurship, solving your own problem, challenging an established category, and what it really takes to turn a kitchen experiment into a nationally recognized consumer brand. Listen here or anywhere you get your podcasts. 🎧

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Transcript

Kara Goldin 0:00
I am unwilling to give up. That I will start over from scratch as many times as it takes to get where I want to be. I want to be. You just want to make sure you will get knocked down, but just make sure you don’t get knocked out. Knocked out. So your only choice should be go focus on what you can control. Control. Control. Hi everyone, and welcome to the Kara Goldin Show. Join me each week for inspiring conversations with some of the world’s greatest leaders. We’ll talk with founders, entrepreneurs, CEOs, and really some of the most interesting people of our time. Can’t wait to get started. Let’s go. Let’s go. Hi, everyone, and welcome back to the Kara Goldin Show. Some of the best businesses start when a founder decides to solve a problem they’re living with themselves. Today’s guest is Krishna Kaliannan, founder of an incredible brand, Catalina Crunch, the better for you cereal and snack company that has become one of the fastest-growing brands in the functional food space. So Krishna’s path here is anything but typical. He started his career in finance, working for some of the best firms, and but living with type one diabetes, he was constantly frustrated by how difficult it was to find foods that worked for the way he needed to eat. So, without giving up the taste and crunch he actually wanted, Catalina Crunch was born. So he started experimenting in his kitchen. Sound familiar, right? What began with homemade low carb cereal eventually became Catalina Crunch. So Krishna was doing everything himself out of a small bakery in Indianapolis. I read managing production during the day, selling at night, and even sleeping on a cot in the front office. I cannot wait to dig into how Catalina Crunch has endured the journey into a couple 100 million, I think, in annual retail sales, and can be found in more than 28,000 retail doors as well as online, of course. So, Krishna, welcome to the Kara Goldin Show. So nice to meet you, and congrats on everything.

Krishna Kaliannan 2:19
Thanks for having me, thank you, thank you. Glad to be here.

Kara Goldin 2:23
Very excited. So, for someone who’s just discovering the brand Catalina Crunch, how do you describe the brand today? And maybe that’s a little different than how it first started.

Krishna Kaliannan 2:36
Yeah, yeah. Well, we make cereals and snacks, which are high in protein and fiber and low in sugar, really trying to help folks eat healthier but enjoy doing so at the same time, right? So our most popular product is our cinnamon toast cereal, sold in all major retailers across the country, zero sugar, 11 grams of protein. Really, I think a great as a cereal and a snack.

Kara Goldin 3:00
That’s terrific. When you decided that you were going to launch Catalina Crunch, you didn’t come from the snacks or the cereal industry overall. What got you interested in actually deciding to not only become an entrepreneur but also to actually go into this category.

Krishna Kaliannan 3:21
So it was nutrition, really. So I’m a type one diabetic. I was diagnosed when I was a senior in high school, going into my freshman year of college, and it totally changed the way that I ate. And that’s really what got me interested in nutrition, right? I grew up eating the classic American favorites: the Cocoa Puffs, Cinnamon Toast Crunch, Chex Mix, drinking Coke and Pepsi, those sorts of things, right? And you know, when you’re young and you’re playing sports, it doesn’t really matter too much. And then you get diagnosed with type one diabetes. You go off to college, things totally change, right? And so, I basically started quickly realized after being diagnosed with diabetes that if you eat a lot of protein and a lot of fiber and minimize the amount of sugar and and kind of quick acting carbohydrates that you’re eating, it’s much easier to keep your weight where you want, much easier to keep your mind clear throughout the day, and much easier to keep your blood sugar where you want as well, and you take a lot less insulin. So, I started eating basically nothing but eggs for breakfast, snacking exclusively on nuts, and that really helped me with my health and with my type one diabetes. But it was very unfulfilling and not very fun. And after I graduated from college, I went off to New York. You know, New York, you got acai bowls and breakfast bagel sandwiches and brunch on the weekends with friends and all that good stuff, right? And I missed out on a lot of that just sitting there eating my eggs. And that’s when I kind of got interested in like, hey, can I remake? These cereals that I used to love, but in a you know kind of higher protein, higher fiber, lower sugar way, right? That nutritional trifecta. So that’s what got me interested in it.

Kara Goldin 5:10
Were your parents entrepreneurs? Did you? Where did you get the entrepreneur bug?

Krishna Kaliannan 5:15
Sort of, sort of. My dad was a veterinarian. He first worked at a different veterinary practice and then quickly started his own veterinary practice and ran that for decades and decades very successfully. And so I had a little bit of a sense of what it’s like to be a business owner. I think from him, but I really, you know, I had a job out of college working at a hedge fund, great firm. But I just realized I kind of like wasn’t wasn’t cut out for it. It wasn’t for me, and I really fell in love with and kind of became addicted to starting my own business, and that’s kind of how that how that happened.

Kara Goldin 5:52
So you were working in finance prior to starting Catalina Crunch. So you mentioned, I guess the hedge fund side of it is that what you were doing mostly? Like there, I’ve talked to some entrepreneurs who have worked in venture, private equity, doing investing in startup companies. It sounds like that wasn’t your side of the finance world either.

Krishna Kaliannan 6:19
That’s correct. Yeah, I was not involved in any sort of individual company or single stock selection. I was on a team that was focused on commodity trading and then risk parity trading strategies and kind of portfolio management. So there was there were no no companies involved in that.

Kara Goldin 6:38
Did you decide I’m gonna go find a bakery to go and create this idea that I have, or did you just decide I’m going to do this for fun and then see what happens? And maybe the business idea to actually launch it comes later.

Krishna Kaliannan 6:55
Yeah, the business idea came later. You’re absolutely right. I was really just making food for myself to start, and it started out as a little bit of an experiment. I had for years been on Sundays grilling up chicken breasts to eat during the week for lunch, so that I didn’t go out to lunch and that sort of thing. And then I got interested in baking as a way to sort of extend what I was already doing on Sunday, right? So I kind of conquered lunch with chicken breast, and then it was okay. Let me replace my daily intake of almonds and cashews and peanuts with something a little bit more exciting. And I started making actually crackers, which again followed this theme of being high in protein and high in fiber. And I was buying ingredients off Amazon like almond flour, protein powders, coconut flour, those sorts of things, and really just experimenting with making crackers and then eating them myself normally with hummus. And one day I kind of thought to myself, “Oh, these crackers are great, but if I made them a little bit smaller and I made add some cocoa powder, maybe they taste like chocolate, and I could, you know, eat them in a bowl with almond milk as cereal. And that’s when it kind of went from crackers to cereal. And I really just became a baking nerd, I guess you could say. Had no even idea about starting a food CPG company. One day I was out in Central Park with a friend. He was interested in eating more protein and more fiber for breakfast. He was sick of eating eggs, and he’s not diabetic. He was just trying to eat healthier, right? And I was like, “Huh, that sounds really familiar. Why don’t you try some of the cereal I’ve been making?” So I gave him some in a plastic baggie. He Venmoed me for it, and I hadn’t asked him to pay me anything for it, but the fact that he Venmoed me for it then kind of like triggered something in my mind. Oh, you could actually sell stuff, sell food for money, right? And he also Venmoed me like 799 or something, like a very like retail price point, as opposed to just like Venmoing me five bucks or something like that, right? And so that’s when I kind of first got the idea, and then that’s after I gave it some more thought about like the pros and cons of jumping in. I really decided to go all in on this, and that’s when I then went to find a bakery to make it in.

Kara Goldin 9:11
That’s awesome. So food formulation is incredibly difficult. It’s one thing to be, you know, sourcing different ingredients and creating in your kitchen versus actually being able to create it at scale and get it into packaging and doing all of these things. What was the hardest part of getting the actual product ready for market?

Krishna Kaliannan 9:36
Ooh, good question.

Kara Goldin 9:39
A lot of hard, right?

Krishna Kaliannan 9:41
Yeah, yeah, yeah. Yep. I think the the hardest part was probably setting up the supply chain itself. So when I first started, well, I went through two phases. So in phase one, I was just selling online, and I was actually baking the cereal. Myself in a commercial kitchen in Brooklyn, packaging up myself in these pouches that I would buy off Amazon and shipping it out to people in the mail. And so, in that setup, the hard part was in making enough of it, right? And like all the time you spend making it yourself. Then you go, you know. Then I went and took a course actually at Texas A and M is like a week long exec ed type thing, and learned how the big guys make cereal, right? Like the General Mills and the Kelloggs of the world. How do they make millions and millions of boxes every day? And you know that requires huge amounts of equipment. So you go and you start out. Typically, you can work with a what’s called a co manufacturer, as I’m sure you’re you’re well aware, right? That will make your product for you. And one of the challenges I quickly ran into was I was insistent on putting the cereal into a stand-up pouch rather than into a bag in a box. And the reason is I was really sick and tired of these boxes of cereal where you open up the box, you take out the bag, and then you can’t get the bag in the box back into the box, and then it goes stale. It doesn’t fit right in the cupboard. All those things. I knew about stand-up pouches. I was like, hey, this is a brilliant idea. It’s like basically a ziplock bag. The cereal sits inside it. You open it up whenever you want some. You zip it back up when you’re done, and you keep going back and forth, right? All of the companies making cereal at the time had these bag-in-box end-of-line equipment. They didn’t have the ability to put it into a pouch, so that then necessitated finding two manufacturers: one company which would receive the raw, you know, the the ingredients and make the cereal; a second company that would then put the cereal into pouches, and that became that became challenging to manage having two different commands in one production process, right? So getting that right was challenging, and that’s ultimately what led me to move out to Indianapolis and start my own bakery was to avoid that situation. But that that I think was the hardest part.

Kara Goldin 12:02
So why Indianapolis? A

Krishna Kaliannan 12:04
lot of the ingredients in the food industry come from that area, right? It’s kind of known as the the Corn Belt, that like Ohio, Indiana, Illinois area. So I think there’s a lot of there’s a lot of food ingredients there. There’s a lot of food production there as a result as well. And then also if you’re kind of like in the center of the country, you can ship relatively efficiently to both the West Coast and the East Coast. Whereas if you’re like, you know, I was living in New York. If you start in New York, you’re spending two weeks to ship a pallet over to California, right? But if you’re in Indiana, you get that done in one week. So there’s a lot of food manufacturing there, a lot of people there, a lot of talent there, and it’s geographically well located,

Kara Goldin 12:43
so I can tell that you’re a very curious person and resourceful too. So, what were those early days like? Right, you’re you’re trying to figure out how do I launch this? Like, how did you get to figure out you know the sourcing for whether it’s packaging or ingredients or anything like that. I mean, it’s not, it’s it’s not for everyone to to do this. I mean, for me, I came from tech, and and I had this idea, and you know, very similar to your story, where I just wanted to have a flavored water with no sweeteners in it, and I couldn’t believe that it wasn’t out there. In fact, I kept saying it’s got to be out there. It must be me, not not the industry. That you know, and of course, I don’t want to launch something that isn’t that’s already out there. So for me, it was like this curiosity really drove me to be able to, you know, ultimately spend every single day just pick and shovel, trying to figure this stuff out. Did you feel similar, you know, as you were doing it? Because you came from a totally different industry. You didn’t come with, you know, parents who were on who were in the food industry either, but it seems like it really excited you. As otherwise, you wouldn’t have done it. You wouldn’t have continued because it’s it’s pretty mundane work, and often I think for most successful entrepreneurs they don’t outsource, especially in those early days, right? You are in it, trying to figure it all out.

Krishna Kaliannan 14:24
Yeah, yeah, yeah, yeah. You know, I think you touch on a couple of important things. One is the concept of motivation, right? So, whenever you start a business, there are going to be good times, there are going to be bad times. A lot of the work is not glamorous. How do you motivate yourself to wake up every morning, work 16 hours, and go to bed again, and then do that whole thing the next day, right? So, when I started, I knew that I wanted to start in an area that I felt deeply passionate about, and that I felt was really important. And so, for me, you know, it started with the type one diabetes, but it led to a realization that the. Obesity rate in the country has been climbing for decades and decades. A lot of people are are not living as long as they could be living. You know, they’re they’re not living the active lives that they’d want to be living, right? And so I felt strongly that through our products, through our foods, through our snacks, we could become part of the solution for this kind of epidemic in the country, and really help 10s of millions of people. So I got really motivated by by that, and I think that motivation is what helps me, to your point, drive through the mundane times. And then in terms of how do you, you know, how how do you learn the industry? You’re right. I have no, I had no connections to the food industry. No parents in the industry. Never worked in the industry. Kind of a mix of of luck and resourcefulness. I got a advisor from a friend of my fiance’s, and he had been in the food industry for a long time. Really successful guy. Multiple companies in the industry, and I learned a ton from him. You know, I owe to him a lot of our our success. Another part of it was just like the good old fashioned, you know, like Google trade shows and asking for referrals, right? So you meet one packaging supplier. They work with other companies. You’re looking for a company that supplies, you know, X Y Z raw material. You ask your packaging supplier, maybe they know someone, right? And you just kind of keep going from there. So I think I think that was the way that I that I kind of learned the the business over time.

Kara Goldin 16:27
So you finally launched in 2018. How long was the period where you were creating right before launch? Like how long did that take before you actually got a product out there to sell. I

Krishna Kaliannan 16:41
think all in all, it was probably between six and nine months, something like that.

Kara Goldin 16:44
Interesting, and that’s pretty quick.

Krishna Kaliannan 16:47
Yeah, all things considered, it was. I was pushing quickly. You know, I had been selling online, as I told you before, right? And I’d been making it in my kitchen, so I already had a sense of of how to make it and the ingredients and the things like that from the time sort of as a hobby, but then to really professionalizing and commercializing it at scale, it was another six to nine months.

Kara Goldin 17:10
Interesting. So, how many SKUs did you launch with when you originally launched? Then

Krishna Kaliannan 17:17
this was a big learning. I launched with one SKU. It was dark chocolate cereal. That’s our second most popular right now. I had done that because I had loved eating cocoa puffs as a kid, and I thought, all right, we’ll just make dark chocolate cereal. It’ll be great. And one of the first things I realized after just a couple months of selling it online was people wanted more flavors? They were like, “Oh, this is great! Can you? But can you make a cinnamon toast version? This is great, but can you make a honey version? Can you make a blueberry version? Right?” And so I started with one, and then we kind of grew grew gradually from there.

Kara Goldin 17:56
You speak about some of the more popular, you know, the cinnamon crunch, right, or the cinnamon toast crunch, I think it’s called, and then the Cocoa Puffs, and so launching a business, especially when there’s the big guys, right? I had my big guys, the Cokes and the Pepsis of the world. How hard is it for you to get shelf space? You’re launching online. I mean that’s hard as well. But actually getting it on the shelf, how hard did you find that to be?

Krishna Kaliannan 18:28
Not as hard as you might expect. I think I again had a fair deal of luck involved in this in this endeavor. There was a buyer at Whole Foods, and Whole Foods, especially at the time, like you know, very forward-thinking retailer, always looking for new, better, innovative, interesting foods for people, right? And she had she had seen what was happening with the number of people that were interested in in keto, in the rise and popularity of keto. She saw a cereal, and she was like, “Hey, this thing is perfect. It’s packed with protein, packed with fiber, no sugar, low in carbs. I think this would crush it at Whole Foods.” And so, spoke with her. Whole Foods had actually recently transitioned from local buying, where they buy region by region inside of America, to one buying office, which buys for all the Whole Foods across the country, right? And so, you know, had a couple conversations with her, sent her samples. She was really excited about it, and then brought it into into stores from there. And it was selling well. I think this is a rarity in the food industry, but we had built up a fairly large following from selling online for a few years before that. So when it hit retail shelves, and people all of a sudden could get it alongside what they were buying on their regular grocery trips. It just kind of took off, and so I think within six to nine months we were the number one selling adult cereal at Whole Foods Market, and then from there, you know, we were able to bring that that story to other to other retailers.

Kara Goldin 20:00
So so often new founders, especially in the CPG industry, find you know it’s one thing to get your product on the shelf, but actually stay there. So this may be stating the obvious, but what are the things that you realized after launching Catalina Crunch that maybe you hadn’t realized when you were in a totally different industry or just a consumer of products, like how how does that all work?

Krishna Kaliannan 20:30
Yeah, your to your point, like staying there is very important. There’s a lot of new products on shelf every year. Most of them are gone after a year, right? So continuing to turn quickly is important. I think you know. I hadn’t realized the importance of execution in the retail environment, especially in the early days. What I mean by that is, when you sell online, right? You’re selling yourself. You’re selling directly to consumers. You control completely how the product’s merchandised on your website, what it says, how to find it, the buying experience, and then the shipping experience to the consumer. When you sell to retailers, they obviously control all of that, right? So, little things like, oh, the product is out of stock, and the stores forgot to reorder more. All of a sudden, you’re not selling any cereal, right? Or the store’s inventory says that they’re a cereal, but that’s because some consumer picked up a couple bags, decided they didn’t want it, and left it over with the bananas, right? And so again, store is not ordering more, or like you’re on the top shelf or you’re on the bottom shelf. Hard for consumers to find you, right? You thought they were going to price it at a certain price, but the store decided to price it $1 higher, and so now it’s like overpriced relative to you know where what it costs elsewhere, right? So those sorts of like just kind of sales and retail execution, you know, I think it was it’s really important to work with the retailer to help the retailer to stay on top of the store, the store level information, and make sure you really understand what’s going on with the product. So I definitely didn’t didn’t appreciate the the complexity and the and just the you know to your point, it’s not glamorous work per se, but it’s really important work to to get the the product selling well.

Kara Goldin 22:17
So every great founder has early day stories where maybe things, and maybe it’s not so early. It could even happen later on, where you run into a challenge. It creates maybe it’s just a challenge. Maybe it’s a failure along along the way. I’ll I’ll tell you one of ours, and we had so many with hint, but one of them that was kind of a duh moment was we we wanted a clear bottle because we didn’t have any color in our product, so we had clear labels on the bottle, and you know it was selling pretty well at Whole Foods and some of the other markets that we had gotten into. This is before this is early 2005, 2006, but we had to change our packaging, our labels because of a New York City bottle builder. They were going to pull us totally off the shelf, and we were going to lose the space that we had worked so hard to get. So we couldn’t get the clear labels in time. So we put white labels on, and our sales tenxed overnight. And we were like, “What? Did we get more space? No. Did in fact we had lost some space. But what changed was the consumer could actually see our product when it was sitting next to a bright pink vitamin water or Gatorade, like you couldn’t see it. It just got lost on the shelf. But none of us saw it. None of the agencies saw it. I mean, it was just it. It was like, oh my gosh, we have to change it across you know in all our distribution across the country. And it was mostly just San Francisco and New York at that point, but did you have any stories like that where you had to, you know, you saw something so clearly that you just it was time that for you to adjust?

Krishna Kaliannan 24:14
That’s a that I mean, that’s a great realization on your part, right? I think that that’s like kind of like one of those lucky moments to your point, but then you’re really smart to take advantage of the situation and and and really understand what’s going on, right? You know, I think I don’t have as exciting of a story, unfortunately. One I will say is just about the importance of staying close to the retail environment. During COVID, it was hard to get all sorts of ingredients. It was hard to ship place things from one place to another. Retailers were having trouble picking up our products from our from our bakery. We’re having trouble getting the ingredients to make things. All that right, and so during COVID, a number of companies took the pricing up on products to help. Cover the these additional costs, and I think one of my takeaways was you know retailers started to float up our price as a way for them to make more margin and to you know recover some of the money that they had been spending on shipping and whatever else. Many of the brands that were more on top of the retailers, the price point, that sort of thing, were more quick to really make sure the retailers were hitting the right price points, and so we saw in some cases we had a cereal that was selling for 899 every day. All of a sudden, it’s selling for 1019, for example, and you know it can have dramatic differences on on the sales based on the price point itself, right? And based on the relative price point compared to the competition, and so we saw that like actually sometimes resellers would increase price, and we just see the same unit velocities, and therefore our dollar velocities would go up. But after they would go, especially over $10 into these weird like 1019, 1029 price points, it really was doing more, I think, harm than good for for the company and for the consumers, and I think that was a kind of a small realization. But when you add it up over a large number of retail accounts, it it made a big difference for

Kara Goldin 26:09
us. You’ve done a phenomenal job, and the brand is is terrific. I love everything that you’re doing. You now have snack mixes and lots of other SKUs outside of just kind of the cereal side of the business. What are you most looking forward to as you continue to grow the brand? I mean, I always say to people that you know along the way you’ve you know you have to just keep setting those goals, right? All great founders, right? You’re never done.

Krishna Kaliannan 26:41
Yeah. So,

Kara Goldin 26:42
what is your kind of dream and wish for this brand as you continue to go through this year, next year, and beyond?

Krishna Kaliannan 26:53
Yeah, yeah. I think more than anything, there can be this sense like, oh, we’re at $200 million in in sales, things are fantastic. You know, you’ve made it. Why don’t you go live on an island somewhere? That sort of thing, right? But it’s really a drop in the bucket compared to the number of households there are in America and the amount of cereals and snacks that’s being bought, right? And so for me, you know, we have. It seems actually blows my mind sometimes. About 5% household penetration, right? It’s about one in 20 American households are eating a Catalina Crunch product at least once a year, which sounds like a lot, but it’s really, I think, a very small amount compared to some of the larger brands, right? And so, we have kind of what we consider a mission metric, which is the amount of sugar that we’re removing from the American consumers’ diet every year. We removed just over 5 million pounds last year, which sounds like a lot again, or may sound like a lot, but it’s a drop in the bucket compared to the billions of pounds that are being consumed. Right, and so for me, it’s like I just really think that we’re in the early innings of creating these great tasting, enjoyable, familiar foods that also are packed with nutrition, right? And I think people are, you know, so many people still just feel being forced into making a trade off between something which is like healthy or better for them but doesn’t really taste good, or getting that like Oreo or whatever it is that they really want to eat, right? And I think we, I think there’s basically a a ton of runway to make folks aware, and then and then more and better products that kind of avoid that trade off and and enable people to we call it crunch without compromise, right? Which is to enjoy what they eat, and then also be proud of what they’re eating, be confident in their bodies, that sort of thing. So I’m I’m just really excited for that.

Kara Goldin 28:48
I love it. Well, Krishna, thank you so much for sharing the story and coming on and talking about Catalina Crunch. Everyone needs to check it out. Buy lots of SKUs products that that you have, all of that you have just really. I mean, it’s really inspiring. I totally agree with everything you’re saying. I think that there’s a whole group of founders that are really trying to do the right thing for not just their own health, but also other consumers’ health. And I think you’re right on. So thank you so much for explaining that and doing everything that you’re doing, and thank you everyone for listening. So until next time on the Kara Goldin Show. Thanks again, Krishna Kaliannan, founder of Catalina Grinch.

Krishna Kaliannan 29:38
Thank you. Great to be here.

Kara Goldin 29:40
Thanks again for listening to the Kara Goldin Show. If you would, please give us a review and feel free to share this podcast with others who would benefit. And of course, feel free to subscribe so you don’t miss a single episode of our podcast. Just a reminder that I can be found on all platforms at Kara Goldin. I would love. To hear from you too, so feel free to DM me. And if you want to hear more about my journey, I hope you will have a listen or pick up a copy of my Wall Street Journal best-selling book, Undaunted, where I share more about my journey, including founding and building. Hint: We are here every Monday, Wednesday, and Friday. Thanks for listening, and goodbye for now.

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