When Elizabeth Stein started selling her muffin mix to grocers, she didn't understand much about how her business model was supposed to work. Pricing was only slightly more sophisticated than a shot in the dark, and she looked at other products in her local health food store to get some idea of how much people were willing to spend.

Because Stein's muffins were gluten-free, she knew the mixes would be relatively expensive. "We were certainly way higher-priced than anything in the regular market," she says. The verdict: $8.99 for enough mix to make 24 muffins.

By 2012, Stein says she was doing about $200,000 a year in muffin mix. In the first year she sold granola under the Purely Elizabeth brand, it outsold the mixes, and Purely Elizabeth became a granola company. By then, Stein knew more about co-packers, distribution, and sales into grocery stores, and she also knew that a price higher than people might expect wasn't necessarily a deal-killer.

Now Purely Elizabeth granola is sold in about 10,000 retail stores, bringing in about $12 million in sales a year. The suggested retail price is $6.99 for eight ounces, which is higher than even other well-known natural brands such as Kind. Here's how Purely Elizabeth makes that pricing stick:

Packaging That Reflects the Brand

You can't position a product as high-end without high-end packaging. Before launching her business, Stein went to the fancy food show in New York to check out her potential competition. "I looked at all the packaging design," she says, and figured out pretty quickly what she wanted. "A color block at the top, white at the bottom. Simplicity was one of the most important things. It had to be clean to convey the cleanness of the ingredients."

Eight years later, her packaging retains those same elements, but it's changed in another way: She now sells granola in a bag, not a box. About a year after Stein started selling granola, a buyer at Central Market, in Texas, suggested she put her granola in a bag that was at least partially clear, so that customers could actually see it. (One of Purely Elizabeth's competitors, Kind, takes a similar approach). Says Stein: "We changed from a box to a bag, and that probably changed the course of our business."

Certifications

Getting certified as organic is not cheap, and many small producers, while they may produce food that would qualify as organic, don't take the time or spend the money to get certified. Purely Elizabeth granola comes with a raft of certifications, with a line of logos--organic, gluten-free, non-GMO, certified vegan, certified B Corp, one percent for the planet--along the bottom of the bag. Some of those costs are now wrapped into the money Stein pays her co-packer, but having to use a co-packer that could get her some of those certifications also limited her choices.

Authenticity

Much of the value of Purely Elizabeth lies in the ingredients. If you can buy sugar by the ton, it costs less than 10 cents a pound. But organic coconut sugar, which is what Purely Elizabeth uses, costs more than $3.50 a pound.

Stein says oats provide another good example. Run-of-the-mill oats, she says, might cost 20 cents a pound. A pound of organic oats costs twice as much. A pound of gluten-free non-organic oats costs about 70 cents a pound. Organic, gluten-free oats cost about a dollar a pound. Plus, when Stein started out, there was only one vendor for organic, gluten-free oats. Now, she says, there might be three.

Consistency in Social Media

Stein says her company uses its social media accounts to show the value of its brand in a more holistic way. "Our instagram account is very curated pictures," she says. "We're not taking a picture on an iPhone and posting it."

There are pictures of beautiful food we all think we should have time to cook, of course, as well as lots of pictures of the company's own granola. But you'll also find pictures of the farms that provide some of Purely Elizabeth's ingredients, inspirational quotes, and a few team pictures. Says Stein: "It all has to be a reflection of our image."

Published on: Nov 23, 2016