Snack food confusion forces company to change name

NEW YORK (AP) — Scott Jensen realized nine months after he invested in a healthy snacks company that it needed a name change.

Jensen became a partner in a small business called Daily Juice in 2010. It sold kale chips, snacks similar to potato chips but made out of the leafy green vegetable kale.

At first, Jensen didn't see a problem. But he and his partners began to realize that consumers and retailers were confused.

"They said, 'this looks like it should be in the juice section, but it's a bag of kale chips,'" Jensen says

They faced another challenge: prospective investors were confused. The firm was the outgrowth of a company that owned two Austin, Texas, restaurants called Daily Juice. But the restaurants and the snack maker were entirely separate.

"When we had meetings with various investors, they would ask us about the name and the fact that there were Daily Juices opened and selling smoothies, and why our name was the same," Jensen says. "It made for a clunky meeting when we had to explain the details of why we were a different company."

Changing a company name can be expensive and time-consuming. Costs can run into tens of thousands of dollars. That's a big bite for a business with under $1 million in revenue.

"We did some low-cost research, asking around to customers, 'does our bag, name and feel of the product make sense to you?'" Jensen says.

The company put together a list of about 300 names, and conducted an informal survey, asking people which ones they liked. That helped narrow the list. They settled on Rhythm Superfoods.

"Everything we make is focused on super foods. Rhythm seemed to have the soul of our founders," Jensen says. The company's founders included a musician, disk jockey and a producer.

"As we put 'rhythm' and 'superfoods' together, that really resonated with people."

That was just the start. Rhythm Superfoods needed a new logo and packaging, business cards, letterhead, even a new booth for trade shows. It had to register the name change with the Texas secretary of state.

There were legal and logistical challenges. Contracts with distributors and retailers had to be rewritten. The company needed new barcodes and the more than 400 supermarkets where its products were sold had to reconfigure their computer systems.

The process, which took about nine months, cost about $40,000. Jensen believes it was the right move.

"We definitely needed to draw a clear line between the two corporations," he says.

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