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Snap, crackle, profit: How Magic Spoon manifested a cereal miracle

May 23, 2021, 12:00 PM UTC

When I was a kid, I had so internalized our household’s dogma of the evils of sugar cereal that I would be less surprised if my mother poured me a scotch than a bowl of Trix. The problem was the ads in between Saturday morning cartoons made kids cereal so appealing that it haunted me, which is how I found myself in the kitchen of a boastful neighbor boy who wanted to prove his family had every kind of sugar cereal you could think of, even the one I wanted to try the most with its bedeviling little leprechaun. But as he climbed up on the counter to pull down the box of Lucky Charms, I was seized with a pre-emptive guilt so strong that I ran out the back door and down the street to my own house.

What a game changer it would have been if Magic Spoon had existed in the 1980s.

You may have seen an ad for Magic Spoon in your Facebook feed or listened to a podcast recently for which it is a sponsor or seen someone you follow on Instagram displaying their colorful boxes with the pop art graphics. Magic Spoon is the “keto-friendly,” low-carb cereal, reimagining a childhood staple for adults, replete with word searches and mad libs on the back of the box. It targets millennials whose growth charts could be measured in bowls of cereal, but as adults pay more attention to their sugar intake. 

Magic Spoon’s premise is that instead of giving up cereal or switching to the healthy high-in-fiber grown-up varieties (that seem to require an intense amount of chewing), you can eat a cereal that is high in protein, low in sugar and actually tastes remarkably similar to the Frosted Flakes and Cinnamon Toast Crunches and Froot Loops of the grocery aisle. Perhaps even more remarkable, this cereal is not even a true “cereal,” in the sense that it contains no grains. 

Co-founders Gabi Lewis and Greg Sewitz, friends who met at Brown a decade ago, found their biggest initial challenge was developing a product that delivered the nutritional targets they’d set, was sufficiently crunchy and tasted good—not just good, but really good. Sewitz estimates they went through at least 20 versions before they hit upon their basic formula, shaped similar to a Cheerio, that uses dairy proteins, tapioca starch and chicory root inulin for crunch and a natural sweetener blend (monk fruit and allulose) and other natural flavors for, well, flavor. 

The result is a serving of Magic Spoon contains 13 to 14 grams of protein and no sugar (and 4 net carbs, for people who pay attention to that sort of thing), compared with 3 grams or less of protein, around 12 grams of sugar (and about 30 net carbs) of most supermarket cereals. Magic Spoon offers six regular flavors, like Frosted and Blueberry, as well as one to two seasonal flavors, like Birthday Cake or Peaches and Cream, which are available for purchase online in a variety pack of their four most popular flavors or in a custom bundle, which is how I came to sample their Cinnamon, Cocoa, Fruity and Peanut Butter flavors. 

Does Magic Spoon taste and eat exactly like mass market sugar cereals? No, not exactly and the texture is ever so slightly different. It’s like getting used to a protein bar or shake that mimics a familiar flavor, where you notice the slight difference, then grow accustomed to and maybe eventually prefer the variant. The same goes for texture and when I say that it sticks slightly in the back of your molars, I mean it in a way that is not unpleasant (Sewitz said in development, they were trying to get the highest amount of protein without being too sticky because “that’s just an unavoidable fact of protein.”)  

I gave some of the cereal to my friend Michael Makunas, a San Franciscan who eats a mostly keto diet and told me while it’s been years since he’s eaten cereal for breakfast, a bowl of the cocoa Magic Spoon was the perfect dessert. “Every once in a while I need something sweet and it will scratch an itch,” he said, noting that he appreciated Magic Spoon’s use of dairy proteins instead of pea protein (Sewitz said pea protein’s flavor is “too bean-y,” an attribute few are seeking for breakfast or dessert).

Protein bar in a bowl

The protein bar analogy pops up again when it comes to price. Magic Spoon distinguishes itself again from the grocery store aisle at $39.99 for 4 boxes of cereal (though there is no shortage of promo codes for $5 off the order, same as the subscription rate). However, the founders say their margins are no higher than the big cereal companies, the difference is they are sourcing smaller-batched premium ingredients and that Magic Spoon works out to about $1.95 per bowl, which is comparable to…a protein bar. 

And, in fact, Lewis and Sewitz have some experience when it comes to protein bars—Magic Spoon isn’t their first rodeo. While still in college and becoming interested in higher protein diets, they began developing their own protein bar, inspired by reports that insect proteins were extremely sustainable and efficient when compared to animal proteins. Specifically, crickets. Their dorm room experiments eventually became Exo, the cricket protein bar that was sold online and in places like higher-end gyms. Their first start-up (which they sold to Aspire Food Group in 2018) helped inform two things when Lewis and Sewitz started developing Magic Spoon. 

One was they wanted their product to be appealing to the general population. The thing is, you have to persuade people to eat crickets (I am in full agreement. You would have to work very hard to persuade me to eat crickets—and it would have to be for much higher stakes than as a boost of energy before my workout). “We had to convince them it was not only normal, but aspirational or cool,” Lewis said, and “convincing someone takes work and time, which costs money.” 

And secondly, they knew they wanted their next start-up to be entirely direct-to-consumer with the view that you can grow a business quickly when targeting a niche group. Launching Magic Spoon in April 2019, initial sales surpassed Lewis and Sewitz’s expectations and they sold out their first production within weeks. It soon became clear they were tapping into other markets beyond keto followers or millennials. “We don’t want Magic Spoon to be viewed as ‘the keto cereal,’” Lewis said. “We want it to speak to people who care about health in general.” 

By the company’s second birthday, their Manhattan office has grown to a headcount of 21 and they are producing the cereal from multiple sites around the U.S. The two entrepreneurs are keeping a tight lid on sales figures, but will share they’ve had a triple digit growth rate in just the last year alone “and are continuing to beat even our most aggressive sales projections.”

After an early $5.5 million seed round, the online protein cereal company closed another $9 million of venture funding in November and counts as individual investors producer Rick Rubin and, in the ultimate sign of confidence from a few DTC pioneers, Joey Zwillinger of Allbirds, Jeffrey Raider of Harry’s, and the founders of Warby Parker.

And Magic Spoon’s “very much online” current model means they can be very precise about who they are pushing the brand out to, while taking in an incredible amount of information about their broadening customer base and responding quickly to their feedback. Marketing via online influencers, podcasts, and social media like TikTok and Instagram reaches into the subgroups of millennials and beyond (keto adherents, workout mommies, gym rats who detail their lifting and eating regimens to followers, etc). Through the promo codes and other feedback, Magic Spoon knows who they reached and through which channel. 

Sewitz and Lewis said they were initially surprised that their customer base was less narrow than they had imagined, “we have an incredibly broad range of customers who are purchasing it for an incredibly broad range of reasons,” like older customers whose doctor recommends getting more protein or parents who bought it for themselves and the kids started eating it (as was the case at Michael’s house). As such, the company is dipping its toe into more traditional media channels, launching its first radio ad on May 6, because not everyone listens to Pod Save America or saw Questlove’s (not sponsored) post on Instagram just after Magic Spoon launched:

HOL UP HOL UP HOL UP!!!!! You trine tell me this cereal is damn near CARBLESS at 3 percent!!!????? @magicspooncereal take me to your leader NOOOOOOOOW! (Also what’s the sugar content? If under 10% I’ll be sending y’all an emerald cut yellow canary H class ring in the morning)*

(Sewitz and Lewis were as surprised as anyone at Questlove’s enthusiasm, having no idea he’d purchased any Magic Spoon. But it was the perfect ice breaker and Questlove is now an investor.)

Super users

While Magic Spoon offers a subscription, they don’t push it—mindful of “subscription fatigue”—but pay close attention to their returning customers, “a pretty meaningful portion” of their orders. They keep an eye on their Super Users, customers who have bought 50+ or 100+ boxes, and keep track of customer ideas and feedback—which is how the custom bundle option came about. Magic Spoon releases new limited edition and seasonal flavors every month and keeps a master list of new flavor ideas, including every single write-in idea (like Maple Bacon) from customers. 

I asked the founders what flavor of Magic Spoon they like the most. Sewitz enjoys the fruity flavor, while Lewis said he likes to combine cocoa and peanut butter. I had forgotten about the particular pleasure of combining more than one cereal into a custom bowl.

Reader, I tried cocoa and peanut butter together and it was, I daresay, pretty magical.

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