Getting into organic fruit chips is a logical extension, since Rhythm already has technology and equipment for making veggie snacks that can work well with fruit. Jensen noted the fruit line-up was chosen because watermelons, mangoes and pineapple aren't as common as dried apples and bananas. The fruits are sourced from Mexico, which isn't far from Rhythm's Austin headquarters. That means lower shipping costs, which is important as transportation budgets skyrocket for food manufacturers.
Although the company's strategy seems to make sense in light of these realities, Rhythm will have plenty of competitors in the fruit snack category — including those being snapped up by large firms. Last year, PepsiCo acquired San Francisco-based Bare Foods, which makes baked coconut, apple and banana chips. In 2017, KIND introduced a line-up of fruit snacks called KIND Fruit Bites using real fruit and no added sugar, purees, concentrates, preservatives or genetically engineered ingredients.
According to fooddive.com¸ Rhythm may have some advantages. For one, its fruit snack products are made from organic fruit and contain no added sugar. Also, the company has raised about $9 million to help with R&D, marketing and outreach, thanks to investment from General Mills' venture capital arm 301 INC, plus the CircleUp Growth Fund and Blueberry Ventures, NOSH reported.
Another advantage is the growing popularity of fruit-based snacks. According to a 2017 study by Innova Market Insights, they accounted for 18% of all global launches, more than twice the number five years before that. However, nutritionists point out not all such snacks are healthy just because they contain fruit. Other ingredients, such as added sugars and trans fat, are in some competitors, giving Rhythm a leg up with its clean labels.
