A Whole New Bowl Game
When Cal State Fullerton Coach Lynn Rogers and his wife, Bonnie, began grinding oats on their kitchen counter seven years ago, all they wanted was hearty oatmeal--nothing mushy, gooey or pasty.
What they got was a business that soon will be selling Coach’s Oats, a chewy breakfast cereal, in Ralphs grocery stores.
And no one seems more surprised than Lynn Rogers, who never expected to become both college coach and oatmeal maker.
“Can you believe this?” he asked recently, after recounting the string of events that has led to his dual career. “Isn’t this just the craziest?”
Crazy and lucky, perhaps.
Industry analysts say the oats are squeezing onto the chain stores’ shelves at just the right moment in hot-cereal history, now that the Food and Drug Administration has decided that oatmeal makers can advertise their product as a “heart healthy” food.
“Oatmeal is a hot food again, in more ways than one,” said Jeanne Hanley, an analyst with the Capital Reflections Inc. investment research firm.
If the Rogerses are beneficiaries of this new spin on an old breakfast cereal, it was not by design.
“We did not sit around and say, ‘Let’s have a strategy meeting and wear our power ties,’ ” said Rogers, 48, who has coached women’s gymnastics at the university for 23 years. “We sort of backed into the business.”
Coach’s Oats Inc. was born five years ago when a friend took oatmeal samples to a natural foods trade show in Anaheim and offered them to an executive from Roman Meal Milling Co., which agreed to produce the cereal.
“I was born and raised during the Depression and I ate a lot of oatmeal, and I didn’t like the stuff,” said Bob Maneval, then Roman Meal’s vice president and general manager. “But this I do like.”
The Rogerses, who run the business from their Brea home, began selling to hotels, restaurants, hospitals and cafeterias in 1996. During that first year, their oatmeal generated a paltry $7,000. But last year, sales nudged $50,000.
In 1998, well, who knows how good things could get, said the coach, who is not given to understatement. “Our business is going to jump significantly--underline significantly--bold letters,” he said. “It’s hitting a home run.”
Analysts say it’s not easy to launch such a business, but the Rogerses may have a shot.
“Is this going to topple Quaker Oats? No way in hell,” said John O’Neil, an analyst with Bankers Trust New York. “Can he build a vibrant and profitable small business? It’s certainly possible.”
If the business succeeds, Lynn Rogers said, his friends will deserve much of the credit. They have propelled it forward, investing in the company, pushing the product and even helping with the package design.
“Either people like us or feel sorry for us,” he said. “I don’t know which it is.”
Friend Eddie Sheldrake, who co-owns 14 Polly’s Bakery Cafes, was first to put Coach’s Oats on his restaurants’ menus. Sheldrake, who also has 16 KFC stores, then made cookies from the oats and began selling them at the fast-food chicken outlets.
Meanwhile, the coach struck a partnership with Bill Ross, owner of Bloomfield Bakery in Los Alamitos, who has helped develop two products--"energy bars” and instant cereal, a granola-like product that can be eaten hot or cold. The energy bars should be ready in June.
Ross also lined up a national distributor for the products and began pitching the oat bars to juice bars and other retail outlets.
“Most of the places I’ve talked to say, ‘As soon as you have it, we’ll put it in,’ ” he said. The Rogerses hope to add other products to their product line, including bread, muffin and pancake mixes.
Last year, Coach’s Oats moved into the health food store arena, selling in Mother’s Market & Kitchen stores.
But so far, the company’s major accomplishment has been signing on with Ralphs, which has 265 Ralphs stores and the 58-store Hughes Family Markets chain. The oatmeal should be on store shelves by the end of the summer.
“That’s like a huge leap for us,” said Bonnie Rogers, 35, a graphics designer who quit work to care for the couple’s two children and is now embroiled in the oats business.
It’s unclear now how much shelf space the cereal will get, but it will appear in the cereal aisle, rather than the health food section, said Tom Dahlen, Ralphs senior vice president of marketing. While the cereal aisle is a veritable battle zone of competition, Dahlen said being stuck on health food shelves could limit the oatmeal’s appeal.
Currently, Ralphs is working with the Rogerses to consider packaging changes to make it “more mainstream,” Dahlen said, and may even suggest the coach change the name of his cereal.
While Quaker Oats has a lock on the mass market, Coach’s Oats could be a hit with health-obsessed baby boomers, analyst Hanley said.
“They don’t necessarily have to come head-to-head with Quaker Oats to make money.” The “affluent boomer market” could help, Hanley said.
“Boomers are really kind of strange as a group,” she said. “They want to go out for a steak, but then they’ll eat oatmeal for a week to counteract the steak.”
If the Rogerses are now dreaming about competing with industry giants, their original goal was humble. All they wanted was to concoct a tasty bowl of oatmeal.
As newlyweds in 1991 they embarked upon “a health kick,” Bonnie Rogers said, buying a grinder at the hardware store to make bread and oatmeal.
They experimented with oat groats--the hulled and heat treated grain--grinding them to various consistencies and sifting out the wispy pieces. When they were satisfied with the outcome, they served the oatmeal to friends at their annual Christmas Eve brunch.
The oatmeal was a hit and soon the couple was buying oat groats in 50-pound bags. As the grinding frenzy increased, a fine layer of oat groat dust settled over the tiny Fullerton condominium where the couple then lived, creating headaches for the Rogerses’ house cleaner.
“I think she was very grateful when Roman Meal started doing it for us,” Bonnie Rogers said.
Initially, the Roman Meal Milling Co. in Fargo, N.D., had trouble producing the oatmeal to the coach’s specifications. “It isn’t always that easy to scale up from the kitchen to the plant,” said Joel Dick, the milling company’s vice president of manufacturing.
Eventually, however, they got it right. While they don’t divulge the details, those involved in the process say it is a combination of the grinding technique, moisture and heat that set Coach’s Oats apart.
Maneval, the former milling company executive who first tried the sample at the Anaheim trade show, was so happy with the results that he bought stock in the coach’s company.
That kind of support has buoyed the Rogerses, who launched their business by tapping into their savings and selling private stock to their friends, raising about $150,000.
Over the years, they have learned to work with buyers, brokers and distributors.
“Just like in coaching, you learn you have to rely on and work with other people,” Rogers said.
And there have been days when they felt like quitting. The coach gets downright somber when he tells about the time he proudly presented his product to an investor, only to see the oats pour out of the bottom of defective bags.
“That was another learning curve,” he said.
Today, the Rogerses are just trying to keep pace.
When she is not tending to Nolan, 4, and Calvin, 2, Bonnie Rogers handles billing and fusses over the package’s design.
“The company could probably be growing a lot faster if I would do it full time,” she said. “But I won’t do that.”
And Lynn Rogers plans to keep coaching. “That’s been our challenge, to work the business into the family and make sure we keep our priorities in the right place,” he said.
One of his goals, Rogers said, is to make Coach’s Oats successful enough to become a sponsor of the college’s athletic department.
“It’s fund-raising at its highest level,” he said. “Build a company so you can become your own sponsor.”
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Coach’s Oats at a Glance
Founded: 1993 by owners Lynn and Bonnie Rogers
Products: Coach’s Oats breakfast cereal
New products: Will introduce Coach’s Energy Bars and instant oatmeal this year; eventually will include bread, muffins and pancake mix
1997 sales: $50,000
Major distributors: Mother’s Markets. Ralphs, Hughes and Jensen’s markets will begin selling the products this summer.
OATS, THE FDA AND CHOLESTEROL
In January 1997, the Food and Drug Administration granted permission for companies to claim that eating foods made from rolled oats, oat bran and oat flour that contain enough soluble fiber may reduce the risk of heart disease, as long as they’re part of a low-fat diet.
How oats lower cholesterol:
1. Oat fiber mixes with cholesterol-based bile acids in the intestines and prevents them from being absorbed.
2. Oat fiber carries bile acids out of the body as waste.
3. To make more bile acids, the liver pulls cholesterol out of the bloodstream, thus lowering the body’s cholesterol level.
Sources: Coach’s Oats, National Cholesterol Education Program;
Researched by JANICE JONES DODDS / Los Angeles Times