By Peter Shahin, Daily Staff Reporter
Published July 23, 2012
Finding a niche in today’s economy may be tricky, but in Arbor Haven Foods’ case, it is oh, so sweet.
Arbor Haven Foods isn’t concerned about getting into a ground war with existing bakeries over cookie turf. Their motive is about providing a distinct product in response to a growing demand for gluten-free foods.
So far, the new startup led by University students is selling only gluten-free chocolate chip cookies, but it hopes to expand in the near future to other product lines including a larger variety of cookies and breads.
Engineering senior Steve Dean, Arbor Haven Foods president and co-founder, said his interest in developing gluten-free foods grew out of his own frustration with existing products on the market.
Dean, having a strong gluten allergy, said it is often a challenge to reconcile the label of “gluten-free” with something that is actually appetizing.
“Really, the idea started as trying to be able to feed myself something that tastes different than Styrofoam,” he said.
Dean, who received help from the University’s Center for Entrepreneurship, started working on the product in 2006 but began forming a company and commercial model in 2009 with his brother, Josh Dean.
It was during that time that Steve Dean started honing his chocolate chip cookie recipe for industrial-scale production.
“Not all of my ingredients always play nicely together,” Steve Dean said. “Josh was here for one of the first cookies. He spat the whole thing out. That’s an interesting moment when your family and friends are so appalled at something you fed them that they spit it out.”
Having settled on a final — and palatable — recipe, Arbor Haven Foods partnered with Celiac Specialties, a gluten-free bakery in Novi, Mich. to produce commercial quantities of the gluten-free chocolate chip cookies.
The enterprise is tiny, operating the business, research and development out of Dean’s basement, but it’s a start toward what the founders hope to be a lifelong commitment.
On the marketing side, the company has partnered with local vendors Espresso Royale and Iorio’s Gelateria and recently sold products at a booth at the Ann Arbor Street Art Fair.
Steve Dean added that the company is also working with Zingerman’s to sell their products at the Delicatessen and Bakehouse.
LSA senior Pauline Knighton, vice president of Arbor Haven Foods, said the company is currently focused on expanding its reach to grocery stores like Kroger.
“We’re really happy with our end product of the chocolate chip cookie,” Knighton said. “But again, that was a couple months of tweaking and lots of money that needs to go into products. We have a lot of recipes ready to go, but it’s the extra step, and extra time and money, to get that product out.”
Knighton added that the company has no plans to expand into traditional gluten-based recipes to expand their product line.
“This is definitely our niche,” Knighton said. “It’s something we’re good at and something we’re going to stick with.”
Josh Dean, the other vice president of Arbor Haven Foods, said the company is betting on the increased awareness of the health benefits of gluten abstinence as well as the growing number of consumers that are being diagnosed with gluten allergies of varying severity. He added that the market for gluten-free products is currently worth $3 billion to $5 billion in the United States.
“That number is expected to grow at a rate of 30 percent annually over the next couple of years,” Josh Dean said. “The crazy thing is if you go to Europe, gluten-free is a much larger thing than gluten food is … they have a much higher (rate) of celiac (medical term for gluten allergy) incidence per capita.”
Steve Dean said the company hopes to roll out a cinnamon sugar snickerdoodle cookie within a few months. Down the road, the company plans to produce gluten-free flatbreads before tackling traditional breads.
The cookies are currently retailing at $2.50-$2.85 and are available at all Espresso Royale locations. They are also used in ice cream sandwiches at Iorio’s Gelateria. Bulk orders are also available directly from the company.