Celiac.com 04/15/2015 - The steep costs of getting food onto the shelves at major grocery chains has claimed another notable start-up, the Charlotte-based gluten-free foods company, Bumbalooza.
Their promising start looked even rosier when, against stiff competition, the team won the Charlotte Chamber's Power Up Challenge, complete with a check for $25,000. The Power Up award is bestowed on small-business owners who provide innovative products, earn $1 million or less in revenue.
But just months later, Bumbalooza was facing dire straights due to high shelving costs for their products. Soon, the duo had to give up their distribution warehouse, and their office, and quickly stopped selling gluten-free baking mixes altogether.
They say they spent thousands and paid grocery chains more than $20,000 each in "slotting fees" to get Bumbalooza products on store shelves, only to face delayed and partial payments. They declined to name the large grocers involved.
Faced with high costs and impaired revenue, Prato and Paeper decided that closing was their best option.
Sadly, Bumbalooza is not the first, nor likely the last, food company to tumble as a result of high shelving costs.